SAN FRANCISCO -- Two Santa Rosa leaders of the Hells Angels motorcycle gang and six others were charged with participating in a $10 million mortgage fraud that allegedly funded the purchase of marijuana "grow houses," according to a federal grand jury indictment unsealed Tuesday.
The indictment alleges that Jacob Moynihan, a loan officer with several San Francisco companies between 2005 and 2007, submitted false income documents, employment histories and bank statements on behalf of the Hells Angels members and others to secure mortgages for unqualified borrowers.
The indictment alleges that Raymond Foakes and Josh Leo Johnston are members of the Sonoma County chapter of the Hells Angels and used the mortgages obtained through Moynihan to buy properties they allegedly used to cultivate marijuana. Three others were also charged with obtaining mortgages through Moynihan using fraudulent documents. A fourth defendant, Jerry Mays, is a San Francisco accountant charged with creating false tax returns and employment histories to submit to lenders.
In many cases, bank statements were physically altered to reflect inflated balances and deposit activity, U.S. Attorney spokesman Jack Gillund said in a statement. "These falsified documents were then submitted to mortgage lenders to obtain mortgage loans, some in excess of $1 million, on terms that the lenders would otherwise not have funded."
Authorities said the seven properties in question have since been foreclosed on by lenders.
Foakes, Johnston, Moynihan and all but one of the defendants have pleaded not guilty to charges that include bank and wire fraud, money laundering and drug counts. Mays hasn't been arraigned.
Foakes remains jailed while the others have been released on bail.
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