Leader and Organizer of $49.6 Million Mortgage Fraud Scheme Sentenced to 27 Years and Three Months in Prison
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Fred W. Gibson, Principal Deputy Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), Atlanta Regional Office, announce that Domenico “Dom” Rabuffo, 78, of Miami, was sentenced by Chief United States District Judge K. Michael Moore for his role as a leader and organizer of a $49.6 million bank fraud and wire scheme, perpetrated from approximately 2003 through 2008. Domenico Rabuffo was sentenced to 27 years and three months in prison for his role in the fraud scheme.
On July 3, 2014, Domenico Rabuffo and three co-defendants, Mae Rabuffo, 75, of New York, Raymond E. “Ray” Olivier, 52, of Land O’ Lakes, Florida, and Curtis Allen Davis, 52, of Tampa, were convicted of conspiracy to commit bank fraud and wire fraud after an 11 day-jury trial before Chief Judge Moore. Domenico Rabuffo, Olivier, and Davis were also convicted of various bank fraud offenses.
According to the indictment and evidence at trial, from 2003 to 2008, Rabuffo and his co-defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank. Rabuffo and his ex-wife Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina. Then, Rabuffo, Olivier, and Davis recruited numerous straw borrowers to purchase building lots in the development. Several of the straw borrowers testified at the trial. According to their testimony and other evidence, Domenico Rabuffo paid the borrowers to obtain lot purchase loans and construction loans for building lots in Hampton Springs. To obtain the loans, Domenico Rabuffo, Mae Rabuffo, Olivier, Davis, and other conspirators, submitted fraudulent loan applications and related documents to the lenders and the lenders’ closing agents.
Among other things, the loan applications and settlement statements for the lot loans contained fraudulent statements that the borrowers paid earnest money deposits and cash due at the closing. In fact, the deposits and cash-to-close were paid by Domenico Rabuffo and Mae Rabuffo using proceeds from the fraudulent scheme. Further, Domenico Rabuffo and Mae Rabuffo sent fraudulent correspondence to the closing agents, including letters bearing the forged signatures of borrowers, to create the false impression that the deposits and cash due at closing had been supplied by the borrowers from their own funds.
Olivier and Davis recruited straw borrowers for the fraud scheme and submitted fraudulent loan applications to the lenders. Further, Olivier and Davis caused their private companies to be disclosed as the employers of straw borrowers whose actual employment was inconsistent with the inflated income stated on their loan applications. Then, when they were contacted by the lenders, Olivier and Davis provided fraudulent verifications of employment for those borrowers.
Mae Rabuffo, Davis, and Olivier are scheduled to be sentenced on October 30, 2014, also before Chief Judge Moore.
Three other defendants, Diane M. Hayduk, 64, of Miami, Victor Miguel Vidal, 49, of Miami, and Lazaro Jesus Perez, 44, of Miami Springs, pled guilty to the charged conspiracy and agreed to assist the United States. Hayduk assisted Domenico Rabuffo and Mae Rabuffo with the misappropriation of loan proceeds and the transmission of fraudulent correspondence to the lenders and the closing agents. Vidal served as a loan officer at SunTrust Mortgage, where he sponsored fraudulent loan applications for lots in Hampton Springs, including fraudulent applications for $33 million in construction loans. Perez furnished fictitious accountant’s letters to Vidal, in support of fraudulent loan applications submitted to SunTrust Mortgage. Hayduk, Vidal, and Perez were sentenced in September, 2014. Hayduk was sentenced to 40 months in prison, Vidal was sentenced to 64 months in prison and Perez was sentenced to 30 months in prison.
Mr. Ferrer commended the investigative efforts of the FBI and FDIC-OIG. This case was prosecuted by Assistant United States Attorneys Dwayne E. Williams and Jerrob Duffy.