Roseville Man Sentenced for Real Estate Fraud

A Roseville man will serve five years, 10 months in prison for a $2.9 million real estate scheme.

Royce Lee Newcomb, 49, of Roseville, was sentenced today by United States District Judge Morrison C. England Jr. According to court documents, from Jan. 1, 2009 until Feb. 19, 2010, Newcomb allegedly solicited 22 investors to purchase real estate, primarily foreclosed homes. He instructed investors to send their money to Contour Escrow Services, which was operated by co-schemer Barry Winnett, who had no license to perform escrow services. In total, investors transferred $2,975,352 into Contour Escrow Services, thinking that Newcomb was using it to invest in real estate.

Newcomb also marketed himself as offering foreclosure “rescue” services through Paradigm Foreclosure Specialists, which Newcomb registered by using his middle name as his surname.

Newcomb solicited individuals to pay him between $1,300 and $3,800 to avoid or delay the foreclosure process by filing serial bankruptcy petitions without supporting documentation. In one case, Newcomb allegedly accepted a woman’s wedding ring, with an estimated value of $5,000, in lieu of payment.

Newcomb, through associates and friends, filed the bankruptcy petitions on behalf of individuals, on occasion without the knowledge of the individual. Newcomb had previously been sanctioned by the United States Trustee for similar abuse of the bankruptcy process.

Newcomb pleaded guilty to the charges on May 12, according to a release from the Department of Justice.

In his plea agreement, Newcomb admitted, that at his direction or with his knowledge, Winnett disbursed at least $564,241 to Newcomb, $160,458 to himself, and the remainder to earlier investors. Newcomb falsely represented to victims that these disbursements were returns on investment when, in fact, Newcomb knew they were derived from monies transferred to Contour Escrow Services from later victims.

At Newcomb’s direction, Winnett also created false documents to assure victims that more than a million dollars was held by Contour Escrow Services, when, in fact, Contour Escrow Services had virtually no money at all, according to the release.

Following his sentence, he will have three years of supervised release.