Hearing today in fraud probe | TheUnion.com

Hearing today in fraud probe

A Nevada County Superior Court judge will decide today whether to free accounts that were frozen since last month when police raided the Loan Sense office of Thomas Hastert, who is under investigation for alleged real estate fraud.

Frustrated investors and borrowers, many of them elderly, crowded City Hall two weeks ago when police and the district attorney’s office held a public meeting about the investigation. Prior to the meeting, police had identified about 125 victims of alleged loan fraud. Grass Valley police Capt. Rex Marks estimates another 75 people have not yet come forward.

“It pertains to coming up with a plan that will be accepted to handle or service loans that are not involved with the investigation,” Marks said.

“We could be at the 200 mark,” he said.

“We trusted him. He had been good to us and then he let us down. He told us he could get us more money on our return,” said one investor who wants to remain anonymous. The woman said Hastert owes her $15,000, money that she needs to pay for medication that keeps her alive.

A complete forensic analysis of documents will determine if Hastert used “straws,” or people who appear as investors but have no financial backing.

“It’s like trying to put together a puzzle,” Marks said.

District Attorney Cliff Newell won’t attend the hearing, because he is out of the office until Friday.

Attorney-client privileged information collected at the time of the raid cannot be discussed in open court, said Deputy District Attorney James Phillips.

“I can’t tell you that it’s going to be resolved. That’s up to the judge,” Phillips said.

“We are awaiting the outcome of the hearing to find out where we go from there,” Marks said.


To contact Staff Writer Laura Brown, e-mail laurab@theunion.com

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