Man Convicted of Renting Out Foreclosed Homes He Didn't Own

Originally posted at 11:51 p.m. Oct. 30, 2013.

A 49-year-old man who filed quitclaim deeds on five “distressed” homes he did not own—including one in San Clemente —to make a profit by renting the properties was convicted Wednesday of filing false or forged documents.

Blair Christopher Hanloh, who is scheduled to be sentenced Dec. 13, faces up to five years and eight months in prison, Deputy District Attorney Pete Pierce said.

Jurors, who deliberated for about three days, were deadlocked 11-1 for guilt on a felony count of second-degree commercial burglary, Pierce said. That count would have added eight months to his potential punishment, said Pierce, who hasn't decided whether to seek another trial on the deadlocked felony.

“We're very gratified by the jury's verdict,” Pierce said. “The most important thing is Mr. Hanloh's conduct has to stop. He said during the trial that he has tried some sort of variation on the scheme with 50 to 75 properties in the state... This conduct has real victims and real serious consequences.”

Hanloh's attorney argued that her client sought “abandoned” homes and took control of the properties through a legal maneuver called adverse possession.

Orange County prosecutors charged Hanloh in June 2010 with grand theft, alleging he engaged in a $3.5 million fraud scheme, but those charges were dropped. alledge alledging 

Hanloh filed quitclaim deeds against five homes facing foreclosure or already foreclosed upon and changed the locks, according to Pierce.

“It's actually a scam, a con,” Pierce told jurors in his opening statement of the trial. “It was a fraud perpetrated against the victims and county officials .... It was a con so he could gather rent money from people he put in these homes.”

The homes are at 8237 E. Birch Tree Lane, Anaheim Hills; 7820 E. Rainview Court, Anaheim Hills; 205 Avenida Valencia, San Clemente; 33292 Sea Bright Drive, Dana Point; and 26993 Del Gado Road, Dana Point.

The Birch Tree Lane home was owned by a man in negotiations with his lender and was able to hold onto the property, Pierce said. He realized someone filed a quitclaim against his property when he found someone living there and paying rent to Hanloh, Pierce said.

Anaheim Police Department Officer Steven DePaola testified he was sent to the Rainview Court home March 18, 2010 on a report from a neighbor who complained about “squatters.”

The “tenant” gave DePaola a copy of his rental contract, and Hanloh later told DePaola that he was in “control of that particular piece of property,” the officer testified.

Pierce said the home was owned by a recently divorced man facing foreclosure who had made a deal with two investors to renovate the property.

The owners tried to get the family living there evicted but, when they refused, DePaola and his supervisors concluded it was a civil dispute, the officer testified. Police later decided it was a criminal matter and started an investigation, Pierce said.

One of Hanloh's partners was found squatting in the San Clemente home on Avenida Valencia, Pierce said. City officials determined the house was not in compliance with city codes and evicted Hanloh's partner.

Hanloh rented the Sea Bright Drive home in Dana Point, which had been foreclosed upon and was owned by Wells Fargo Bank, Pierce said. Hanloh is accused of filing a quitclaim deed against the Dana Point home on Del Gado Road, although it was owned by JP Morgan Chase, Pierce said.

Hanloh's attorney, Stacy Kelly of the Orange County Public Defender's Office, did not dispute that Hanlon filed quitclaim deeds against the five homes.

“Where the dispute is did Mr. Hanloh knowingly file false documents?” Kelly said. “This is not the scam Mr. Pierce said it was.”

Hanloh “located abandoned properties in Orange County that he felt were in disrepair” and took control of them as part of a “nuisance abatement” effort, Kelly said.

“I'm not saying what Mr. Hanloh did was completely selfless,” Kelly said. “But what he did was not illegal .... He did not believe there was anything false on those quitclaim deeds he recorded.”

When Hanloh was confronted by the real homeowners in Anaheim Hills he tried to resolve the issues, Kelly said.

“He does not want to take homes from people who have emotional attachments to their homes,” Kelly said. “His battle is with the banks.”

--City News Service