Ventura Mortgage Broker Is Charged in Fraud

A Ventura mortgage broker has been charged in federal court with three counts of mail fraud in connection with a lending scheme that allegedly bilked several Ventura County residents and more than a dozen other California investors out of nearly $4.6 million.

Larry Curtis Waltz, former owner of a Ventura-based lending agency, is expected to plead guilty to the charges when he appears in federal court in downtown Los Angeles on Feb. 4, said his attorney, Gary Lincenberg.

Federal prosecutors allege that while operating Larry Waltz and Associates in Ventura, Waltz put together an elaborate real estate investment scheme.

Waltz told investors, many of whom were elderly and on fixed incomes, that they could expect monthly interest income if they agreed to lend money to people buying a home or refinancing existing properties, said Angela Davis, the assistant U.S. attorney prosecuting the case.

Investors Allegedly Shown Phony Papers

Investors said they were promised that at the end of the term of the loan, about five years, they would receive their money back in one lump sum.

They signed money over to Waltz after he showed them paperwork from alleged applicants, Davis said. But most of the names were false or used without the person’s permission, she said.

“[Waltz] would tell [potential investors] of an opportunity and he would provide a borrower’s name, but he had made up the borrowers,” Davis said.

“He had this idea that he could tell people, ‘Gee, there is a gorgeous house, a borrower and a really good second mortgage.’ Investors would say, ‘Sure, I’ll make an investment.’ ”

Monthly interest payments, from the supposed borrowers, actually were pulled from the accounts of other investors doing business with Waltz, Davis said.

Waltz acknowledged his guilt in letters sent in January 2001 to the more than two dozen investors who lost money.

“You have wrongfully entrusted money to me to invest on your behalf,” Waltz wrote. “I have wrongfully placed this money in risky investments, which you did not authorize. These investments failed. I have only a limited ability to repay you.”

Broker Said Clients Could Be Repaid

Waltz wrote that he “no doubt violated a number of laws” but expressed hope that two investments “still have a chance of producing funds, which would enable me to pay back you and other investors.”

He was not available for comment.

Lincenberg said Waltz has resigned from the company he started and has lost his real state broker’s license.

“This is hard on him, and it’s not going to be easy to deal with,” Lincenberg said. “It was eating at him and he felt bad. He didn’t want to continue the wrongdoing.”

Under the terms of federal sentencing guidelines, Davis will ask U.S. District Judge Margaret Morrow to sentence Waltz to at least 18 months in prison and require him to repay the investors, Davis said.

“Restitution is mandated in this case,” Davis said. “It can’t be part of any bankruptcy. He will be paying the rest of his life unless he wins the lottery.”

Retired Camarillo engineer Horst Funfstuck, 71, said he lost a small fortune to Waltz when he agreed to hand over more than $1 million to the broker, starting in 1994. Funfstuck said he was searching for low-risk investments to cushion his retirement.

Funfstuck has recovered about half of what he invested but is uncertain about the remainder.