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He's No Angel 

They once called him a savior who helped people in need. Today, Edwin Parada is accused of taking money from Latinos unfamiliar with real estate laws.

Wednesday, Jun 18 2008
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"He told everyone that he wanted to help us make money," recalls Julia Lopez, a 52-year-old congregant who works as a housekeeping manager at the St. Francis Hotel. "He said, 'Just because you're Christian doesn't mean you have to be poor.'"

A week later, Lopez and her then-boyfriend paid Parada a visit in his Mission office, where the agent laid out a tempting investment opportunity: The couple would take $190,000 from the equity on their home and give it to Parada to invest in other properties, according to Lopez. In return, Parada would give Lopez $1,700 each month, $500 more than her mortgage payment.

Although Parada did make payments to the couple for a time, the checks soon started bouncing, Lopez alleges. And when she asked him for the money back, as was agreed in the promissory note, Parada said that business was slow and that he didn't have it.

Today Lopez wonders how she could have known that what she considered a sound business opportunity would turn out this way.

"It's true that he didn't force me to give him money at knifepoint," Lopez said. "I was ambitious, but that's what I thought you had to do in the U.S. to make money. I thought you had to take risks."

Although Parada is just a few years over the legal drinking age, he managed to gain a reputation in the local Latino community as an ambitious businessman. He was the owner of Red Cafe in the Mission and Gunter's restaurant in South San Francisco, until transferring the titles of both businesses to his sister last October. The Marceloses and several other alleged victims believe the transfer was done after the first lawsuit against Parada was filed in August 2007, which made him think his assets could be seized. But Hayden, Parada's bankruptcy attorney, said his client gave his sister, Sandra Edwan, the restaurants as a way to repay her for money he owed her.

Another property Parada owned for two years is a home in the Excelsior, before it was foreclosed on in April of this year, according to property history documents. In that time, Parada borrowed nearly $700,000 against the property — which is worth approximately $400,000 — by taking out deeds of trust in other people's names, lenders who were meant to assume responsibility for the debt. Typically, a bank or credit union becomes a lender when people borrow against their property, but because these institutions also have more stringent guidelines, it's easier to make another person a lender, which Parada did with at least seven people, according to documents.

One of the "lenders" Parada approached in November 2007 was Martin Arteaga, whose wife Gloria once worked at Red Cafe. But Parada didn't mention anything about a deed of trust or that Arteaga's name would be listed as one of lenders, simply that he had an emergency and needed money, Gloria Arteaga recalls.

"He wanted $40,000, but we could only write him a check for $20,000," she said. She also said she lent Parada the money because she considered him a friend. Parada said he would repay the debt with $2,000 interest within a couple of months. Seven months later, the Arteagas say they are still waiting.

Mortgage fraud schemes have been uncovered in other parts of the Bay Area, as well as in Sacramento, Stockton, and Los Angeles, leaving behind a trail of people who have not only lost money, but have also ruined their credit.

This past April, two East Bay women were arrested on charges that they ran a fraudulent foreclosure "rescue" business that used grant deeds to con at least 14 families out of thousands of dollars. Their clients, most of them Latino immigrants, were asked to fill out documents that deeded a part of their property to fictitious companies. The suspects then filed bankruptcy petitions using the fake companies' names, which stalled the foreclosures. But homeowners — who were paying up to $2,500 a month to the pair — still lost their homes when banks went to court and overturned the grant deeds.

But even when perpetrators end up behind bars, the money they steal is not always recovered. More often, police find the thieves have burned through the money, leaving few assets to be seized. Nor is there a lot of hope that crooks can earn back the money while incarcerated.

"When you put people in prison, they're not able to make wages, so that creates a tension in the system," says Lim, of the Alameda County DA's office. "Do you hold the person accountable and punish them with prison to deter others from committing the same crime or do you let them out, so they can get a job and repay the victim?"

The alleged victims all say they just want Parada to return the money he owes them, although they wouldn't mind if he also is held accountable by the courts. The police say they're still investigating and making progress in the case.

Anyone convicted of taking money from victims could face up to three years in prison, if tried and convicted of grand theft, forgery, and false recording of documents — charges typically associated with fraud, according to Lim. California also has white-collar enhancement clauses for crimes involving over $100,000, although much also depends on a person's criminal record and whether any of the victims were elderly.

The Marceloses, for one, say they will keep fighting as long as it takes, not only to keep the bank from foreclosing on their home — a process which has temporarily been stalled with their lawsuit — but also to help other immigrants navigate the complex world of real estate law and educate them about their rights.

One little-known one is that in California, any agreement that is negotiated in Spanish — or Chinese, Tagalog, Vietnamese, or Korean, for that matter — requires all accompanying documents such as a lease, a loan, or any other contract to be in the same language. But although the law was passed in 1976, landlords, agents, and brokers frequently ignore it, either because they do not know about it or because there are no repercussions for violations.

About The Author

Karina Ioffee

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