Man sentenced in mortgage-swindling scam

A Newport Beach man convicted of using the proceeds of a multimillion-dollar mortgage-swindling scheme to buy a sports car, boat and a home, among other things, will begin his 57-month federal prison sentence next month.

Kenneth C. Ketner, 58, also concealed that he had used some of the money from the scam to pay off original borrowers. Efforts to reach Ketner on Tuesday were unsuccessful.

When U.S. District Judge James Selna sentenced Ketner on Monday he also ordered Ketner to pay $9 million in restitution.

Newport Beach attorney Allen Johnson, who was involved in the scam, continues to cooperate with federal prosecutors and is expected to be sentenced in August, Assistant U.S. Atty. Andrew Stolper said Tuesday.

Johnson is accused of helping Ketner in the scheme. Ketner was chief executive of Mortgage Capital Resource Corp. between 1999 and 2001, according to federal prosecutors.

Johnson pleaded guilty in 2005 to wire fraud and money-laundering conspiracy in 2005. He agreed to “meet with the government, and he would have testified [against Ketner] if necessary, but it turned out it was not necessary after Ketner pleaded guilty last year,” Stolper said.

In 2006, Ketner also pleaded guilty to wire fraud and money-laundering.

Since his indictment in 2005, Ketner has continued to engage in fraud, Stolper said.

“[Ketner] continues to conceal assets from his victims, and he does so by holding assets in other peoples’ names,” Stolper said. Ketner is viewed in a more positive light by Cathie Young, the discipleship pastor at St. James Anglican Church in Newport Beach.

“Ken certainly has expressed his deep remorse of the bad decisions he made, and he is willing to take responsibility for his actions. [The Ketners] are very sincere about their Christian faith, and that’s been very evident to us over the past couple years as they have gone through this difficult time,” Young said of Ketner and wife Sherry.

Young added that as the Ketners brace for the difficult times to come, “We’ll be standing with the Ketners as Ken pays his penalty, and we’ll be remaining with them in prayer.”