In a case that shook the Bay Area, three real estate professionals were sentenced to federal prison for their involvement in a major mortgage fraud conspiracy that defrauded lenders and the Federal Housing Administration (FHA) of millions of dollars. The fraud scheme involved falsifying loan applications to secure home loans for clients who didn’t qualify. The defendants worked together to trick mortgage companies into issuing loans based on false and inflated information.
The Mortgage Fraud Scheme: How It Worked
From 2018 to 2022, Tjoman Buditaslim, a former licensed real estate broker, led a scheme that involved originating more than 100 home loans worth over $55 million. The loans were based on fraudulent loan applications that contained false information about applicants’ income, assets, and other financial details. Buditaslim, along with his co-conspirators, created fake documents, including divorce decrees, child support checks for non-existent children, and even bank statements to make it appear that the loan applicants had higher incomes than they really did.
These fabricated documents convinced the mortgage companies to approve home loans that would not have been granted had the lenders known the truth. As a result, Buditaslim and his co-conspirators pocketed substantial profits. The fraud cost the FHA nearly half a million dollars as they had to cover the losses from certain loans that eventually went into foreclosure.
Key Players in the Mortgage Fraud
Tjoman Buditaslim, 52, from San Francisco, was at the center of the conspiracy. He was a licensed real estate broker until his license was revoked in 2019. Despite the revocation, Buditaslim continued to orchestrate the fraud by helping clients qualify for loans that they could not have otherwise obtained. The fraud was not limited to just Buditaslim; his co-conspirators were equally involved.
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Jose De Jesus Martinez, 59, from Daly City, was another major player. As a licensed real estate agent, Martinez directed his clients to Buditaslim, knowing full well that the loans were being processed with false information. Over the course of the scheme, Martinez facilitated about $27.7 million in loans for his clients, earning close to $590,000 in commissions.
Jose Alfonso Tellez, 27, from San Jose, worked as a loan officer at a mortgage company. Tellez’s role was to assess whether applicants qualified for loans based on the information they provided. However, he knowingly processed and approved approximately $17 million in fraudulent loans. Despite his responsibility to report false information, Tellez went ahead with these loans and earned over $134,000 in commissions for his involvement in the scam.
Sentences and Restitution
All three defendants pleaded guilty to conspiracy to commit wire fraud and were sentenced in federal court. Tjoman Buditaslim received the longest sentence—24 months in prison. Jose Martinez was sentenced to 14 months, while Jose Tellez received 12 months.
In addition to their prison sentences, each defendant was ordered to pay restitution. Buditaslim was ordered to pay back $1,393,018.46, Martinez must repay $840,847.35, and Tellez was ordered to pay $858,321.67. These restitution payments are intended to help cover the damages caused by their fraudulent actions. Each defendant will also serve three years of supervised release once they complete their sentences. They are scheduled to begin serving their prison terms on February 3, 2025.
The investigation into the fraud was a multi-year effort led by several agencies, including the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG), the U.S. Department of Housing and Urban Development (HUD) Office of Inspector General, the U.S. Postal Inspection Service, and the California Department of Justice.
These federal agencies worked together to uncover the scheme and bring those responsible to justice. The case highlights the dangers of mortgage fraud and the lengths some individuals will go to exploit the housing system for personal gain.
