MURRIETA -- Operating through an out-of-state company, a real estate investment group has begun to take possession of several dozen homes from clients who bought them two years ago under unusual circumstances, according to public property records.

The company, incorporated in Nevada as Total Return Fund LLC, has become a target of the third and fourth lawsuit in a growing string of cases that allege fraud on the order of hundreds of millions of dollars. According to Nevada state records, the company shares a mailing address with Jovane Investments LLC, whose chief executive -- James Duncan -- is targeted by all four lawsuits.

A total of two dozen plaintiffs allege that Duncan, mortgage brokerage Stonewood Consulting Inc., Stonewood chief executive Hendrix Montecastro, Pacific Wealth Management LLC and its chief executive Maurice McLeod, all of Murrieta, pocketed excess cash from clients' mortgage loans, using a fraction of it to make initial mortgage payments on the houses before suddenly backing out last fall and allowing the houses to fall into foreclosure.

Total Return Fund has acquired at least 56 houses in and around Murrieta since September, with several of the transfers taking place since an initial lawsuit was filed Jan. 5, according to a search of a database used by local real estate agents.

Of 15 houses whose records were examined by The Californian, nine had been bought between mid-2003 and mid-2005 in a series of unusual transactions brokered by Stonewood.

Those initial purchases raised eyebrows among local real estate agents because many of Stonewood's offers were $75,000 or more above the amounts sellers were asking. Most Stonewood clients bought multiple properties with 100 percent financing, according to the real estate database.

The recent string of transfers is unusual in that few of the houses appear to have been listed on the open market, according to the database. That's common between family members, but not among sellers who are trying to get the highest price for their houses. In most cases, ownership was transferred by grant deed, without a sale price being recorded.

The 56 properties include three houses -- on Chesterfield Lane in Wildomar and Wrangler Drive and Evening Shade Place in Murrieta -- that Total Return Fund acquired in early January from Bernie Cabrales and his wife, who have signed on to the Jan. 5 lawsuit.

"We signed the grant deeds pursuant to Pacific Wealth's instructions and also relying on the fact that we believed everything represented to us was true and legitimate," Cabrales wrote in the suit. Cabrales was told his property was being "liquidated," but he said he didn't realize that he was signing grant deeds that would transfer ownership.

"We had no idea what they were," Cabrales said Tuesday. "They said, 'Just sign it, and we'll take care of the rest.'"

James Duncan, listed as Jovane's registered officer in California state records, hasn't responded to numerous calls and e-mails seeking comment. Nor have Montecastro or Pacific Wealth chief executive Maurice McLeod. Pacific Wealth, which has registered in Nevada, was recently ordered to stop using the name following a lawsuit by Pacific Wealth Management LLC, an unrelated San Diego investment firm that is registered in California. McLeod registered Pacific Wealth Management LLC as a Nevada company in July 2003, though it has used a Murrieta telephone number for most of the last two years, plaintiffs said.

Syling and Carol Lee lost eight Murrieta-area houses and are still on the hook for the monthly mortgage payments, according to a lawsuit the Murrieta couple filed Feb. 13 in Riverside County Superior Court. The suit alleges that the defendants arranged for the Lees to buy the houses over the last two years and broke a promise to help cover the monthly payments.

The couple realized last month that the houses were in the name of Total Return Fund, though the loans were still in their names.

In the lawsuit, the Lees said they were pressured to sign a series of documents which -- they later realized -- had transferred ownership to that company. Initial mortgage payouts from the Murrieta couple's eight houses totaled more than $4 million, according to the real estate database.

The Riverside County District Attorney's office is investigating several of the defendants in the civil lawsuits, according to a supervisor in the office. No criminal charges have been filed in the matter.

A fourth lawsuit, filed late Friday, alleges that the defendants left a San Diego County couple on the hook for some $7.2 million in outstanding mortgage payments. The couple, Vicente Rodriguez and Kim Kelso, allege that they lost 12 houses in a similar way, also to Total Return Fund. They were told the transfers were necessary to "facilitate" the sale of other properties that were part of an elaborate investment group.

That group spans 11 states, according to a client list filed as part of the lawsuit. Residents of northern California, southern Arizona and northern Texas who spoke to The Californian said they were recruited into the group by family members and by friends they knew as fellow church members or fellow employees of the U.S. Air Force.

A spreadsheet filed earlier this month as evidence in the lawsuit lists 423 people as "core clients" and "golden clients" in the group.

Two other married couples whose houses have recently been deeded to Total Return Fund said they were also confused by recent transactions. One couple, who live in the San Francisco suburbs, said they were in the process of signing onto the Jan. 5 lawsuit. The other couple, who live in Southwest County, said they had been consulting an attorney, but declined to comment further.

The 56 houses are in a variety of conditions. Total Return Fund is now attempting to sell several of them, according to Rodriguez's and Kelso's lawsuit. Another, on Dahlias Way in Murrieta, was dark one night last week, with a variety of advertising fliers strewn about its front porch.

At least two others are being used as offices. One, on Mountain Breeze Drive in northwestern Murrieta, was transferred to Total Return Fund in late October, also without a sale price being recorded, according to the real estate database.

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

See also:

Scope of alleged scam grows

Investors' legal battles span 5 years

Renters latest victims of alleged scam

Real-estate investors bought on faith

High-ball offers raised flags in 2004; Unusual investment patterns cited in lawsuit reported to authorities

Suit alleges massive mortgage scam