Huntington Beach business owner convicted of identity theft in alleged $6M national student loan fraud – Orange County Register
SANTA ANA — The owner of a Huntington Beach-based business was convicted Tuesday of identity theft in connection with an alleged $6 million nationwide student loan fraud, but jurors deadlocked on several other counts after 11 days of deliberations.
Angela Kathryn Mirabella, 49, was convicted of one count of identity theft. During the trial, 24 other counts were dismissed and jurors deadlocked on 62 other counts, including conspiracy, computer access and fraud, identity theft, grand larceny and money laundering.
In his indictment, prosecutors said that as part of the scheme, Mirabella registered three companies with the state: Mirabella Group LLC in Huntington Beach and associated companies Student Renew LLC and My Financial Solutions LLC in Newport Beach. Another company, ZDP Financial (Zero Dollar Payment Financial), was registered by Mirabella in Clark County, Nevada.
During the trial, Orange County Superior Court Judge Richard King dismissed a case against co-defendant Paulina Francine Pacheco, 35, an employee, who was charged with identity theft, computer access, fraud and grand larceny.
Pacheco is one of the callers who “deceived” student loan holders, Assistant Attorney General Tawnya Austin charged. Her attorney, Rob Harley, said his client was a woman who “jumped at the chance” to take a more professional job after years as a waitress and did nothing wrong.
Co-defendants Cesar Sandoval-Vilchis, 38, Stephen Allen Gamboa, 42, Briana Nacole Graham, 38, Matthew Bruce Walsh, 30, and Teresa Marie Lovato, 48, have pleaded guilty and are awaiting sentencing. They had all reached agreements with prosecutors to testify at trial.
Judge King set October 25 as the date for the next sentencing hearing and a new trial on the remaining charges. The jury found guilty 10-2 on some counts and 11-1 on others.
Austin told jurors in his opening statement that while the case may appear complicated at first glance, “it’s really a simple bait and switch.”
In her closing argument, she said: “The whole enterprise is a scam.”
The loan holders “thought they were actually talking to the Department of Education” when Mirabella employees called them, Austin said.
“This crime is prolific,” Austin said, adding that there were about 13,000 student loan accounts linked to the company.
One of the victims learned that her loans had never been modified or adjusted, Austin said. She thought her payments were intended to pay off her loan, Austin added.
“This is a story about greed,” Austin said. “Rules were bent. They were broken. This was a way to make millions of dollars off the backs of people who were struggling.”
The money loan holders paid to have their student loans forgiven “went directly to Mirabella,” not to the lenders, Austin said.
Mirabella’s business would generate leads from creditors such as Kristen Torres, who owed $9,000 and was struggling to make her payments, Austin said.
But most loan holders were not eligible for debt forgiveness, Austin said.
When Torres received a notice that she had not made a payment, she called Pacheco, who at that point turned her over to processing, Austin said.
Pacheco told him to put agents who called him about missed payments on the government’s do-not-call list and ignore them, Austin said.
“To her detriment, she didn’t make her payments and what was a $9,000 loan became a $12,000 loan,” Austin said. “This scheme was repeated over and over again.”
When employees contacted loan holders, they asked for an email address and date of birth so they could access federal records, Austin said.
“Based on that opening (in the sales pitch), they thought they were talking to the Department of Education,” Austin said.
They also used personal identifying information to access records to change the terms of their student aid without their consent, prosecutors said.
The script also included the phrase “Congratulations, you have been pre-approved” for loan forgiveness, Austin said.
The alleged scheme involving about 19,000 borrowers nationwide, including 3,000 in California, took place from 2017 to 2020, Austin said.
Call center employees are reportedly pushing to have payments suspended, Austin said.
What the company was proposing was “impossible,” Austin said.
“You can never deliver what you claim to sell – it’s a fraud,” Austin said.
At one point, Mirabella entered into a contract with Equitable Acceptance that opened credit accounts in borrowers’ names without their consent and was paid in exchange, prosecutors alleged.
The company was “destroyed” when many victims reported that they had not applied for credit cards, Austin said.
Education Department officials who monitor IP addresses noticed that websites controlled by Mirabella were linked to an alarming number of student loan defaults, so those addresses were blocked, Austin said.
Mirabella’s attorney, Bobby Samini, told jurors that “his client’s interest was to help people navigate what was a complicated process.”
Banks that handled the loans “made it complicated…so people turned to” third-party alternatives, Samini said.
Mirabella’s company experienced “growing pains,” so it hired help to handle claims, Samini said. And that effort was successful, he added.
“We’re going to have to figure out his intention,” Samini said. “And his intention was to make the business work.”
In his closing argument, Samini said: “There is absolutely no way to prove that Ms. Mirabella had any intent to defraud or commit any criminal act… This was a start-up. Its purpose was to help people.”
Equitable was hired to help with claims processing and failed, so Mirabella looked elsewhere and got results, he added.
The Register contributed to this article.
Originally published:
California Daily Newspapers
