Gold Credit Fraud Victims Multiply
Investors left holding the bag after emptying life savings.
Victims of real estate scams allegedly perpetrated by Gold
Credit Investments owner Celia Gallardo continue to come forward, sharing their
stories of loss and fears of becoming homeless because of financial bad
Since several victims spoke with KHTS last week, more and
more horror stories have emerged, such as senior citizens losing their family
homes and community leaders’ finances threatened. One woman, swindled out of more
than $800,000.00, doesn’t know where she will live when the bank comes to
foreclose on her family home. Now, the woman, a widow, is working for a service
company earning just enough to put food on the table and keep the lights on –
“I’m not a bad judge of character and this woman pulled the
wool over my eyes,” she said. “I did not think she could swindle me, but she
absolutely did, along with some very intelligent people.”
Gallardo made a splash on the local social and chamber of
commerce scene in 2003, hosting lavish grand openings and joining prominent
business and service clubs to garner names and make friends. By the time she
opened Gold Credit Investments (GCI) in 2007, her name was well known in Santa
Clarita and her office filled with plaques, giving her an air of credibility.
Investors were asked to loan Gallardo money – some
“invested” hundreds of thousands of dollars – for down payments on out-of-state
rental properties that her company was selling to other investors. They were
given promissory notes that their money would be doubled within 30 or 60 days,
but most of those victims have been left holding the bag; not just losing those
investments, but finding themselves liable for penalties for withdrawing from
401K accounts as well as income taxes.
Very few of those investors got any money back and none
received “double their money.”
The adage “if it sounds too good to be true, it probably
is,” is ringing in too many victims’ ears, detectives investigating the case
pointed out. Most of those people who contacted KHTS asked for their names to
be kept confidential because they were embarrassed and afraid of ramifications.
Some Gold Credit Investments – named to reflect the victims’
good financial status – clients both gave money for investments and bought
properties. Other clients simply used their good credit to allow the purchases
to be made.
Gallardo visited KHTS in March and explained her company’s
For customers with excellent credit, GCI offered an
opportunity to purchase properties “at a reasonable discount of their appraised
value so you can make the most of your real estate investment.”
GCI promised to put 10 to 25 percent down on investor’s
purchases, giving them instant equity. Clients were told that the down payment
would be paid directly to the client’s lender, which was arranged by GCI.
Gallardo informed KHTS, clients would have title to the
property and be liable for the remaining loan amount without using any of their
Investors were promised 10 to 15 percent of the purchase
price back at closing to cover closing costs, impounds (taxes and insurance)
and incentives. They were encouraged to buy 100 properties, or at least five at
a time, with a promise that transactions would close simultaneously.
All properties purchased are rental properties, which GCI
documents indicate will provide investors with instant cash flow, indicating
that incentive funds received by the investors will “cover over a year of
mortgage payments if the unforeseen need arises.”
Gallardo told KHTS they promised all properties were
currently rented with long term leases.
A loan breakdown from GCI documents offered the following
Commercial loan – 25% down (paid by GCI)
Purchase price - $200,000
Loan Amount - $150,000
(The $50,000 difference would be the discount offered by the
developer, which was presented to investors as the “instant equity”)
Estimated principal and interest - $1,048.82
Estimated real estate taxes - $255
Estimate homeowner association dues $200
Total estimated monthly payment - $1,503.82
Gallardo informed KHTS she was getting $80,000.00 of the
$200,000 returned to her from the builder. KHTS was told by one of the victims,
there is an $80,000.00 “marketing expense,” incurred on the loan.
The reality, as so many investors found, was that the
appraisals of the property values were inflated. Monthly cost estimates were
low-balled. Some clients had independent appraisals made after they suspected
fraud. They discovered the value of their homes was less than estimated by GCI.
And to add insult to injury, the “incentive” funds seldom materialized.
Equity promised was nonexistent, leaving victims with few
alternatives; they could continue to pay a negative amount each month or walk
away from the loan and suffer the subsequent damage to their credit.
In addition, upgrades to many of the condominiums were not
done, as some were occupied. Several victims reported that their properties had
been trashed by renters from the local college, costing them even more when
fixtures, flooring and furniture had to be replaced.
Victims who have contracted with lawyers told KHTS that
Gallardo has repeatedly missed deposition appointments and court dates. Some of
them are also holding checks, some as old as 10 months, that Gallardo asked
them to hold, but the monies have never been available.
KHTS has heard from more than a dozen victims, whose
potential losses are in the millions.
“She told my attorney that she was going to Mississippi
to get the money she owed me, but she was actually on a Mediterranean cruise with
a bunch of friends.”
Detectives from the Commercial Crimes Bureau of the L.A.
County Sheriff’s Department are investigating this case. If you have been a victim,
call Detective David Lingscheidt at (661) 287-4098.
Read other articles from this series of special reports: