SANTA ANA (CNS) - The owner of a Huntington Beach-based company ripped off thousands of student loan holders across the country out of $6 million, a prosecutor told jurors Monday while a defense attorney said the defendant established a legitimate start-up that did its best to help borrowers.
Angela Kathryn Mirabella, 49, is charged with 87 felony counts including conspiracy, computer access and fraud, identity theft, grand theft and money laundering, with sentencing enhancements for aggravated white collar crime in excess of $500,000. Also on trial is Paulina Francine Pacheco, 35, an employee, who is charged with identity theft, computer access and fraud and grand theft.
Pacheco is accused of being one of the callers who "tricked" student loan holders, according to Deputy Attorney General Tawnya Austin. 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 scheduled to be sentenced July 26. They all have agreements with prosecutors to testify in the trial.
Austin told jurors that while superficially the case may seem complicated, "It's really a simple bait and switch."
The loan holders "believed they were actually speaking to the Department of Education" when Mirabella's employees called them, Austin said.
But the money the loan holders paid for help winning student loan forgiveness "went directly to Mirabella," and not the lenders, Austin said.
Mirabella's company would generate leads from loan holders such as Kristen Torres, who owed $9,000,and was struggling to make her payments, Austin said.
"Ms. Pacheco does an excellent job selling Ms. Torres" on the company's purported services, Austin said.
The victim believed the payments Pacheco set her up for would go toward her loans, and help her qualify for loan forgiveness, Austin said.
But most of the loan holders did not qualify for loan forgiveness, Austin said.
When Torres received a notice she was missing payments, she called for Pacheco, who by that time had handed her off to the processing department, Austin said.
Pacheco told her to put those agents calling her about missed payments on the government's do-not-call list and to ignore them, Austin said.
"To her detriment she didn't make payments and what was a $9,000 loan was now a $12,000 loan," Austin said. "This scheme was repeated over and over again."
When the employees made contact with loan holders they asked for an email and a date of birth so they could access federal files, Austin said.
"Based on that opening (in the sales pitch) they believed they were talking to the Department of Education," Austin said.
They also used personal identifying information to access files to change the terms of their student aid without their consent, prosecutors said.
Also, the script included the phrase, "Congratulations, you've been pre-approved" for loan forgiveness, Austin said.
The alleged scheme involving about 19,000 borrowers nationwide, including 3,000 in California, ran from 2017 through 2020, Austin said.
At one point, Mirabella contracted with Equitable Acceptance that opened credit accounts in the names of borrowers without their consent and was paid in exchange, prosecutors alleged.
The company was "destroyed" when many victims reported they didn't apply for the credit cards, Austin said.
The call center employees would also push "forebearance," which would suspend payments, Austin said.
What the company offered was "impossible," Austin said.
"You could never provide what you claim to be selling -- that's the fraud," Austin said.
Department of Education officials who monitor IP addresses noticed the websites Mirabella controlled were linked to an alarming number of student loan defaults, so those addresses were blocked, Austin said.
Mirabella's attorney, Bobby Samini, told jurors his client's "interest was to help people navigate what was a complicated process."
The banks handling the loans "made it complicated... so people turned to" third-party alternatives, Samini said.
Mirabella's business had "growing pains" so she hired help for processing claims, Samini said. And that effort was successful, he added.
"You're going to have to determine her intent," Samini said. "And her intent was to make the company work."
Samini said jurors will hear "why Equitable is no longer in business," and why Mirabella "terminated them."
Equitable was hired to help with processing claims and failed so Mirabella turned elsewhere and got results, he added.
Harley said Pacheco took a job with Mirabella's firm in 2017. At the time she was single and was driving a 2004 Volkswagen Jetta with 240,000 miles on it, he added.
She worked as a waitress for 10 years after graduating high school, Harley said.
"She spent days and weeks studying" the student loan forgiveness process as part of her training, Harley said.
Torres was routed to Pacheco, who obtained her personal information with Torres' consent so the defendant could provide various options she had for help paying her loans, Harley said.
The defense attorney said there will be witnesses called to testify to Pacheco's "outstanding character," Harley said.