RIVERSIDE -- An alleged real estate fraud involving at least 120 houses should come to trial by next summer, a federal judge indicated Monday in scheduling a series of deadlines for one of the court cases.

The U.S. Securities and Exchange Commission alleges that James Duncan, Hendrix Montecastro and Maurice McLeod offered investments, including single-family tract homes, fraudulently and without holding the necessary licenses. The agency's lawsuit, filed in February, demands that they repay a yet-unspecified sum to their investors and potentially to lenders, who were left with tens of millions of dollars in bad mortgages on houses in and around Murrieta.

The 14-month timetable laid out by U.S. District Court Judge Virginia A. Phillips, in Riverside, comes two years after the investors began consulting attorneys. At least 30 of them -- most residents of southwestern Riverside County; Contra Costa County and Tucson, Ariz.; have signed on to a lawsuit filed in state court in January 2007. Those investors allege that the three men arranged for them to buy houses -- up to five per investor -- at inflated prices, sucked out $10 million or more in equity, and left the houses to foreclosure.

No trial has been scheduled in that lawsuit.

In the SEC case on Monday, Phillips tentatively scheduled a five-week trial beginning Aug. 18, 2009. An attorney for McLeod is asking for a six-month delay in gathering evidence, saying it could be used in a criminal prosecution. A different judge is set to hear that request next month, but Phillips expressed skepticism that it would be granted. If proven, the civil charges would carry fines and other penalties.

No criminal charges have been filed, but an attorney for one of the defendants said they could be imminent.

SEC attorney John Bulgozy noted the presence of two dozen of the investors in the courtroom. Nine wore orange shirts identifying them as former Duncan clients. Six said they had traveled from Tucson for the hearing.

The FBI searched Duncan's and Montecastro's homes for evidence in late February. McLeod's attorney, who represents Duncan in the investors' lawsuit, said the FBI followed up last month with a raid on Chris Oetting, a Palm Desert-area businessman who is targeted by several of the lawsuits.

Separately, the Tucson residents said an investigator for the Riverside County district attorney had traveled to interview them.

Despite a court order issued in May, Duncan and Oetting did not send attorneys to the hearing Monday, and Phillips proposed a $1,500 fine for each man.

Contact staff writer Chris Bagley at (760) 740-5444 or cbagley@nctimes.com. Bagley blogs about local economic trends at www.nctimes.com/blogs/minding_your_business.

FBI sought evidence in real estate probe (March 13, 2008)

Feds take action against real estate group (Feb. 28, 2008)

Wheels of justice grind slowly (July 27, 2007)

State shuts down real estate player (June 30, 2007)

New player emerges in fraud suits (Feb. 21, 2007)

Scope of alleged scam grows (Feb. 14, 2007)

Investors' legal battles span 5 years (Feb. 11, 2007)

Renters latest victims of alleged scam (Feb. 10, 2007)

Real-estate investors bought on faith (Jan. 14, 2007)

High-ball offers raised flags in 2004 (Jan. 9, 2007)

Suit alleges massive mortgage scam (Jan. 6, 2007)