Former LG broker charged with felony embezzlement

By Jeff Kearns

Former Los Gatos mortgage broker Bruce Gary Kasper was arrested at his home in Folsom Feb. 26 on charges that he embezzled more than $1.2 million from his clients. Kasper was arraigned March 5.

Kasper, 48, is charged with 33 counts of grand theft and five counts of elder fraud stemming from his company, Equitable Home Loans, which was located in San Jose and at 315 Saratoga-Los Gatos Road in Los Gatos.

He faces a maximum of 17 years in state prison, but Deputy District Attorney Paul Colin says that Kasper has cooperated with the investigation, which may help reduce his sentence. Colin says he will be discussing a settlement in April which he hopes will lead to a guilty plea from Kasper.

Kasper allegedly acted as a middleman between homeowners who borrowed money against their property and people who gave Kasper investment money that was backed by deeds recorded against their property.

"It's a classic mortgage broker embezzlement case," Colin said.

Frank Ubhaus, Kasper's attorney, said his client first started getting into trouble by trying to keep his clients happy when the loans went bad.

"He was using the proceeds from the good loans to continue to pay the bad loans," Ubhaus said. "He couldn't admit to his investors that things were going bad, so he continued to make bad loans so [his clients] wouldn't know that he'd defaulted."

According to an affidavit, borrowers made payments to Equitable, which deposited the money, charged a service fee, and gave the rest to investors. When the loans came due, Kasper's company deposited the final payment, deducted charges, and sent the investor the remainder.

The alleged embezzlement took place from 1994 to 1997. Kasper moved to Discovery Bay in 1997, then relocated to Folsom, Colin said. The case followed complaints to the District Attorney's office by two of the victims in 1997. Kasper notified the DA's office before his move.

Kasper admitted defrauding his clients and converting their funds without authorization, the affidavit said. Records show victims lost from $7,000 to $80,000.

Many of Kasper's clients lived in the South Bay and other parts of the Bay Area. Colin said it appears unlikely that they will get full restitution from the criminal case. Some have filed civil lawsuits against Kasper to recover their money.

The state Department of Real Estate's Fraud Recovery Account will cover some of the losses, because Kasper was a licensed real estate broker, but the department only pays up to $100,000 per broker.

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