Paso Robles lenders arrested on multiple fraud charges
March 14, 2013
Heritage Lending principals Candy Wells and her husband Ronald Wells were arrested Tuesday on seven felony charges. The court has set their bail at $2.5 million each.
Prosecutors from the San Luis Obispo County District Attorney’s office charged the Wells with running a scheme to defraud, grand theft and the fraudulent sale of securities. Oceanside police officers arrested the Wells Tuesday evening and booked them into the San Diego County Jail where they await transport back to San Luis Obispo County.
Enticed by the promise of 11 to 12 percent interest through property-secured investments, investors entrusted their nest eggs with Heritage Lending, a hard money lending company.
Hard money loans are based on the value of the underlying asset rather than borrowers’ credit rating. It works if the lender finances no more than 60 to 70 percent of the project and makes payments to contractors as the work progresses. The Wells allegedly failed to monitor projects, used funds for their personal use and were not properly licensed.
In Oct. 2009, the Wells filed for Chapter 7 bankruptcy protection claiming total assets of $854,843 and liabilities of nearly $3.8 million. At the time, Candy Wells blamed Heritage Lending’s downfall on a lawsuit filed by Henrik Nielsen.
According to Nielsen’s suit, Candy Wells did not have a broker’s license. The suit also accused the Wells of utilizing investor funds for private use. Nielsen had invested more than $4 million with Heritage Financial.
On Monday, prosecutors filed a temporary restraining order placing the Wells personal assets under court jurisdiction. A “source of bail” motion was also filed to allow time for authorities to ascertain that funds used for bail are not tainted.