Fraud charges didn’t slow California con artist

Freed from custody while awaiting sentencing on federal fraud charges, Xue Heu of Modesto, Calif., in April bilked $6,000 from an unsuspecting homeowner in need of a loan modification, authorities say. A few weeks later, he scammed $3,500 from a high school buddy by selling him counterfeit fantasy game trading cards, and invoked Donald Trump in an effort to bleed more money.

Both victims realized they’d been had while reading Modesto Bee reports about Heu, the mastermind behind a real estate investment scam.

“(Heu) has no boundaries when it comes to selling his schemes,” said Jeff Mangar, a Stanislaus County prosecutor.

Three local cases against Heu, 38, ended Dec. 7 with plea bargains dovetailing with additional recent fraud convictions in federal court. He was sentenced to five years and three months in federal prison and ordered to pay restitution of nearly $40,000 for the Stanislaus charges, plus $1.2 million to victims in the federal case.

Heu convinced his old friend from Modesto High School that a few legitimate-looking Magic: The Gathering trading cards were worth $10,000. After several conversations, they met in May at a local Starbucks and the victim, unaware that Heu was then awaiting sentencing in the federal case, paid $3,500 for the cards – and considered giving him more money to invest in properties.

Heu used to work for Trump and learned to buy homes facing foreclosure that could be resold at 20 percent profit, providing about $100,000 every month to split with investors, he told the friend. Before he coughed up more money, the friend spotted a Bee story about Heu’s swindling. He then had the trading cards appraised, learned they were worthless fakes and called the fraud unit of the Stanislaus County District Attorney’s Office.

“There was a good lesson learned on my part, if nothing else,’ ” Mangar quoted the victim as saying.

The latest eBay transaction involving a single authentic Magic: The Gathering card brought the seller $9,099, said Bryan Noriega, co-owner of Modesto’s Battleground Games, on Friday. The shop holds weekend tournaments for Magic and other warring card sets such as Pokémon and Yu-Gi-Oh.

The asking price for a Black Lotus, the most coveted Magic card, was listed on eBay Friday at $125,000.

Battleground Games lately has steered away from buying and selling Magic cards because it’s getting increasingly difficult to spot clever counterfeits produced in Asia that are flooding U.S. markets, Noriega said. Dealers used to verify authenticity by shining a light through a card to reveal thin blue lines in card threading, but crooks have learned to duplicate production methods, he said.

“They’re doing an amazing job, so it’s almost impossible to tell,” Noriega said. “It’s getting kind of scary.”

Patrons at his shop pay $6 entry for a chance at winning more card boxes. Players challenge each other using card-indicated weapons, spells and fantasy creatures. Higher-level tournaments offer hundreds and even thousands of dollars in cash prizes and trips.

In another Modesto-based case, Heu and Ralph Leyva, who previously lived in Newman, duped $30,000 from Bay Area and New York investors, including a real estate agent and a certified public accountant.

“It just goes to show you how well Xue has perfected his con salesmanship,” Mangar said.

The victims thought they were buying distressed properties through California REO Services LLC and sent money to Tracy-based Delta Escrow, but both were phony companies.

Leyva earlier this year was sentenced to four years in state prison. Heu’s federal prison term came from charges that he and Modesto accomplice Thomas Dickey Price pretended to represent government-sponsored Fannie Mae and Freddie Mac in selling distressed properties, sometimes using portfolios showing foreclosed homes to be purchased but that in reality already had been sold. They tried to cover their tracks with forged deeds and other bogus documents, authorities say.

Heu posed as an officer of Liquid Assets & Land Investments Inc. and Capital Land Investments LLC, and sometimes used the alias Michael Chan, while Price went by the names Albert Martin and Matt Taylor, court documents say.

Price and an accomplice with Internet expertise, Mark Steven Thompson of Oakdale, were sentenced to 18 months each in federal prison. With Heu, the three men were ordered to pay nearly $2.8 million in combined restitution.

“(Heu) appears to be a career fraudster (who) always looks for his next victim to con,” Mangar said.

This story was originally published December 14, 2015 at 10:04 PM with the headline "Fraud charges didn’t slow California con artist."