LOS ANGELES – Two defendants linked to a mortgage fraud scheme that cost at least $2.4 million when fraudulently purchased homes went into foreclosure have been sentenced to federal prison.

The case involves a scheme to fraudulently obtain mortgages for residential properties through the use of “straw buyers” – individuals who pretend to purchase the properties and have no intention of living in the homes. In this case, the straw buyers’ personal information was used to obtain mortgages without their knowledge. The scheme was run out of JTR Real Estate, Inc., a Norwalk-based real estate brokerage company which bought, renovated and sold residential properties.

The two defendants sentenced on Monday by United States District Judge Dale S. Fischer were:

• John Martynec, 41, of Long Beach, a licensed real estate broker and co-owner of JTR, who previously pleaded guilty to one count of conspiracy and was sentenced to two years in prison; and
• Elek Andrade 32, of Downey, who also previously pleaded guilty to one count of conspiracy and was sentenced to one year and one day in federal prison.

In addition to the prison terms, Judge Fisher ordered both men to pay $2,573,092 in restitution.

Martynec was responsible at JTR for identifying distressed residential properties which could be purchased, renovated, and then sold for a profit. Andrade worked for Martynec as a real estate agent and assisted in selling the properties. When the market for...