PHOENIX (3TV/CBS 5) -- Arizona Attorney General Mark Brnovich says his office put a stop to a real estate scam, and now through a court settlement, money is being returned to families who lost it.

Frank Badilla bought a home in Phoenix, invested in it, and then lost it.

[WATCH: Arizona Attorney General stops real estate scam]

"I kind of miss it to be honest with you," Badilla told 3 On Your Side.

Badilla blames Ruben Diaz, a man who he met through a mutual contact who claimed to work in real estate. According to Brnovich, Ruben Diaz and Rodrigo Diaz from ProSolutions LLC deceived dozens of consumers in a variety of real estate transactions.

In Badilla's case, he says Diaz offered to help him buy back the house after a short sale.

Real estate scam

"He said, 'For you to buy it, I need $20,000,' and I said, 'OK,'" Badilla recalled.

Instead, according to Badilla, Diaz took thousands of dollars up front plus monthly payments, and then kicked Badilla's daughter-in-law out of the house.

"He just sold the house and pocketed the money and left," Badilla said.

In a different part of Phoenix, Jose Godoy was already renting his dream home. He says an acquaintance connected him with Diaz, who promised to help him through the mortgage process to buy the home.

"[Diaz] asked me for $13,000," Godoy said.

Godoy is pastor of a small church. His 30 person congregation helped him raise the money. After he handed over the funds, Godoy said Diaz stopped answering all of his calls and texts.

"It's part of my dreams," Godoy said. "I wanted that house. I really want that house."

Badilla and Godoy aren't alone. The scheme spanned several years, and the Diazes often targeted Spanish speaking consumers, according to Brnovich.

"They would make representations, explain it to them in Spanish, and then they’d hand them a contract in English," Brnovich said. "They would get people into a house. The people thought they were buying the house, but instead what was happening was they were taking the money and pocketing it for themselves."

"It's unconscionable," he continued. "They made hundreds of thousands of dollars by lying to people. I don’t know how people can live with themselves."

Ruben and Rodrigo Diaz deny the allegations, according to a settlement agreement, but both have agreed to never be involved in real estate or rentals in Arizona. When reached by phone, their attorney declined to comment.

Ruben Diaz has agreed to pay about $425,000 in restitution and $100,000 in penalties.

Badilla and Godoy agree the money matters, but they say it will never erase the pain they've lived through.

It's unconscionable. They made hundreds of thousands of dollars by lying to people. I don’t know how people can live with themselves.

"We lost money, but I sleep in peace," Godoy said. "I don’t think that guy [Diaz] is sleeping in peace."

Ruben and Rodrigo Diaz were not licensed lenders, real estate agents, or mortgage brokers, according to Brnovich, who said it is important for consumers to verify that they are working with licensed professionals before entering into any real estate contracts. Contact the Arizona Department of Financial Institutions,, and the Arizona Department of Real Estate,, to determine if a lender or realtor is licensed in the State of Arizona.


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