Judge refuses to shut down brokerage

By: CHRIS BAGLEY - Staff Writer | Thursday, January 18, 2007 11:20 PM PST ∞

MURRIETA ---- A mortgage brokerage and several other defendants in a lawsuit accusing them of fraud can continue to operate, a judge ruled Thursday.

Riverside Superior Court Judge Dallas Holmes denied an attorney's request to bar Stonewood Consulting Inc., of Murrieta, and several related parties from handling investments, but said he would reconsider the matter at a hearing next month.

The sheer number of documents filed in the case made it impossible to consider in a single day, Temecula attorney Rich Ackerman said he was told.

A lawsuit filed by Ackerman alleges the defendants squeezed several million dollars in home equity out of unwitting investors and saddled them with tens of millions of dollars in mortgage obligations.

Holmes' ruling didn't address the merits of the pending lawsuit, which demands compensation for plaintiffs who said they were defrauded. The suit names 11 plaintiffs but alleges that as many as 412 people may have been suckered into overpaying for investments ranging from Iraqi currency to single-family homes in and around Murrieta.

The judge didn't explain his ruling publicly, but Ackerman said the judge was unable to shut down a business based on a brief examination of the mound of paperwork. A hearing is now scheduled for Feb. 16.

San Diego attorney Bill Sauls, who earlier represented Stonewood and at least one other defendant in the case, was not at the hearing and didn't respond to phone calls or an e-mail message seeking comment.

Most of the hearing Thursday morning took place behind closed doors and included Holmes, Ackerman, a notary's attorney and a Temecula attorney named Paul Runes, who refused to comment or to say whom he represented.

Other defendants include Jovane Investments, an Orange-based company registered to James Duncan; Stonewood President Hendrix Montecastro; his mother, Helen Montecastro; two notaries; and four lenders who are now trying to collect late mortgage payments from the plaintiffs.

The suit also targets Pacific Wealth Management LLC of Las Vegas and its officer, Maurice McLeod. The company is unrelated to a San Diego corporation of the same name. The San Diego company sued McLeod's company late last year, alleging improper use of its name and improper use of a federal identification number that the San Diego company once used, according to court records.

McLeod's company took down its Web site earlier this month after a judge ruled for the San Diego company.

-- Contact staff writer Chris Bagley at (951) 676-4315, Ext. 2615, or cbagley@californian.com.

First name only. Comments including last names, contact addresses, e-mail addresses or phone numbers will be deleted. Attempts to misrepresent your identity or impersonate any person will not be approved. All comments are screened before they appear online, so please keep them brief. Comments reflect the views of those commenting and not necessarily those of the North County Times or its staff writers. Click here to view additional comment policies.