NEW YORK—Mario S. Levis, aka “Sammy Levis,” was sentenced today to 60 months in prison by U.S. District Judge Thomas P. Griesa, announced Preet Bharara, U.S. Attorney for the Southern District of New York. After a five-week jury trial in March and April 2010, Levis was found guilty on securities and wire fraud charges for his role in a scheme to defraud investors and potential investors in the stock of Puerto Rico-based Doral Financial Corporation. The scheme occurred between 2001 and 2005, while Levis was the treasurer and senior executive vice president of Doral, and involved misrepresentations that Levis made regarding certain core assets of Doral. An aggregate decline in shareholder value of approximately $4 billion followed the unraveling of the scheme.
“Senior executives of publicly traded companies like Mario Levis who victimize investors and damage public confidence in our financial markets through misrepresentations and outright lies will pay a big price for their actions,” said U.S. Attorney Bharara. “This office, working with the SEC and the FBI, will continue to police market participants to ensure that the playing field is level, that insiders do not take advantage of their positions of trust, and that investors have access to the truthful and accurate information to which they are entitled.”
According to the superseding indictment, the evidence presented at trial, and statements made at the sentencing proceeding, Doral, with mortgage banking operations in Puerto Rico and New York City, was a leading residential mortgage lender in Puerto Rico. Between 2001 and 2005, Levis corrupted the process by which Doral determined the publicly reported value of certain non-cash assets carried on Doral’s financial books called “interest-only strips” (IOs). Doral represented to the public in its annual financial statements that the aggregate value of its IOs, and company earnings associated with those IOs, were increasing substantially year after year. By the beginning of 2005, Doral publicly announced a streak of 28 quarters of “record earnings” based in significant part on the stated value of its IOs.
During the same time, Doral’s stock price steadily increased from approximately $10 per share in early 2000 to almost $50 at the end of 2004. Also during this time frame, Levis and other members of his family were substantial holders of Doral securities. Between 2001 and 2004, the value of Levis’s stock in Doral tripled to more than $60 million.
In its public filings with the Securities and Exchange Commission (SEC), Doral represented that the value of its IOs was based, in part, on two “outside” and “independent” expert valuations provided to Doral on a quarterly basis. According to Doral’s filings with the SEC and representations by Levis to investors, these outside independent valuators were performing the valuation using their own economic and portfolio assumptions.
In truth and in fact, however, Levis corrupted those valuations. For example, the valuation provided by a Morgan Stanley trader involved the trader merely recopying numbers provided by Levis without any other work whatsoever, and then subsequent attempts by Levis to conceal that fact from Doral’s auditors and lawyers. The other valuation from Popular Securities involved Levis dictating key assumptions for Popular to use in performing its valuation analysis. In both cases, Levis failed to inform the valuators that Doral was treating their valuations as independent or citing their work in Doral’s SEC filings.
Levis also materially misrepresented to the investing public – in direct communications with investors, investor representatives, and market analysts – certain specific characteristics of the Doral IO portfolio. Specifically, among other things, Levis falsely claimed that Doral’s loan-sale agreements contained a provision called “caps,” which would purportedly function to prevent substantial write-downs of the IOs if interest rates continued to rise.
Beginning in mid-January 2005, when Doral announced an approximate $97.5 million write-down of the stated value of its IOs attributed to rising interest rates, and Levis’ scheme concerning the IO valuations began to unravel, the market price of Doral’s common stock began to drop steadily from its high of almost $50 per share. By the time Levis resigned from Doral in late August 2005, the price of Doral’s shares had fallen more than 70 percent to approximately $14.13 per share. In total, the company’s shareholders had suffered an aggregate decline in shareholder value of approximately $4 billion.
After trial, Levis was found guilty of one count of securities fraud and two counts of wire fraud. In addition to the prison term imposed today, Judge Griesa ordered Levis to forfeit the proceeds of his crimes and further ordered him to pay restitution, the amount of which will be determined within 90 days.
U.S. Attorney. Bharara praised the work of the FBI. He also thanked the SEC for its assistance in the case.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case is being prosecuted by the Securities and Commodities Fraud Task Force of the U.S. Attorney’s Office. Assistant U.S. Attorneys Marc Litt and David I. Miller, along with Special Assistant U.S. Attorney Jason M. Anthony, are in charge of the prosecution.

CHICAGO—Three owners of a bankrupt Chicago real estate development firm that purported to adhere to Islamic law in handling investments from individuals in the Chicago area and nationwide actually operated a Ponzi-scheme that defrauded hundreds of victims and three banks of more than $43 million, according to a federal indictment made public today. The defendants, who owned Sunrise Equities, Inc., allegedly fraudulently obtained more than $40 million from more than 300 investors through the sale of promissory notes and fraudulently obtained more than $29 million in loans from three area banks. The individual victims collectively lost approximately $30 million and the banks lost approximately $13.7 million when the alleged scheme collapsed in the fall of 2008.
Two defendants, Salman Ibrahim, the majority owner, president and chief executive officer of Sunrise, and Mohammad Akbar Zahid, senior vice president of investor relations and a 10 percent owner of Sunrise, allegedly misrepresented that an investment in Sunrise was Shariahcompliant, which meant that investors would not be paid interest on their investments, which is prohibited under Islamic law. Instead, the investors would receive monthly payments consisting of “profit” generated from real estate development. As a result, they solicited and received investments from hundreds of Muslims in the Chicago area and around the country. Ibrahim and Zahid offered and sold purported investments to the public in the form of promissory notes, claiming that investors’ funds would be invested in real estate development only, and they promised annual returns of between 15 and 30 percent, according to 14-count superseding indictment. The charges were returned by a federal grand jury yesterday and announced today by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
“This is the first time in Chicago that an alleged fraud scheme has been uncovered that used a pillar of Islam to induce potential victims to invest their funds. A key element in securing the charges was the extraordinary cooperation provided by members of Chicago’s Pakistani community, who were the primary victims of this alleged fraud scheme,” Mr. Grant said.
Both Ibrahim, 37, a Pakistani national, and Zahid, 59, a U.S. citizen, formerly of Chicago, allegedly fled the country since Sunrise collapsed and was forced into bankruptcy by creditors. They are believed to be living abroad and anyone with information regarding their whereabouts is encouraged to contact the FBI at (312) 421-6700.
Ibrahim and Zahid were charged together with seven counts of mail fraud or wire fraud and one count of bank fraud. Ibrahim was charged alone with two additional counts of bank fraud, as well as two counts of making false statements to financial institutions. Zahid alone was charged with one count of making false statements to a financial institution. The indictment also seeks forfeiture of at least $43.7 million from them.
A third defendant, Amjed Mahmood, 47, of Des Plaines, who was senior vice president of construction and a 10 percent owner of Sunrise, was charged with one count of conspiracy to commit mail, wire and bank fraud. He will be arraigned at a later date in U.S. District Court.
According to the indictment, between January 2003 and September 2008, the defendants engaged in a Ponzi scheme by continually using funds raised through the sale of promissory notes to new investors to make purported “profit” payments to earlier investors, all of which they concealed and intentionally failed to disclose to both new and earlier investors. The defendants allegedly knew that Sunrise was not generating any profits from real estate developments and the only way they could make the promised payments to investors was through the operation of the Ponzi scheme. In addition, they allegedly obtained additional financing by making false statements to obtain loans from Mutual Bank, Cole Taylor Bank and Devon Bank. Altogether, the charges allege that the defendants took in a total of more than $69 million from individual investors and banks during the scheme.
The defendants used a portion of investors’ funds to operate non-real estate projects that were not disclosed to investors, including a motorcycle parts manufacturing company in Pakistan, a gas station in suburban La Grange and a medical equipment sales company in Chicago, the indictment alleges. Ibrahim misused investor funds to purchase a plot of land on which to build a residence for himself, to operate an Islamic school in order to enhance his reputation in the community, and to lease cars for his personal use; Zahid misused investor funds to renovate his personal residence; and Mahmood misused investors’ funds to make mortgage payments for his personal condominium, according to the indictment.
All three defendants allegedly took steps to fraudulently lull investors into believing their investments were doing well, including sending monthly “profit” payments and falsely representing that Sunrise was a successful real estate development company. To obtain additional funds, Ibrahim allegedly arranged for certain investors to refinance their home mortgages in a “cash-out refinance” program so they could further invest their home loan proceeds into Sunrise. The indictment details five examples of unnamed investors who each lost between $120,000 and $300,000 in the alleged Ponzi scheme, including several who refinanced their mortgages to make further investments.
In August 2008, the defendants allegedly organized an emergency investor meeting and falsely told investors that Sunrise needed an additional $1.2 million to continue operating. The defendants allegedly knew, however, that Sunrise had expended all investor funds and had only approximately $200,000 remaining in its bank accounts and had no means to recover more than $40 million in principal that Sunrise owed to its investors.
As part of the alleged bank financing scheme, Ibrahim and Mahmood obtained loans totaling approximately $20.3 million from Mutual Bank to construct a high-rise condominium building at 24 South Morgan St., Chicago. They allegedly submitted false personal financial statements indicating that they each had a net worth of approximately $8.4 million and $1.5 million, respectively, based primarily on their ownership of Sunrise and its real estate projects, knowing that the company and its projects had no value. In June 2007, Ibrahim and Zahid obtained a $7.2 million loan from Cole Taylor Bank to construct high-rise condominiums at Leland and Clarendon avenues in Chicago. They allegedly submitted false personal financial statements reflecting that they had a net worth of approximately $10.4 million and $687,305, respectively, knowing that they had no such personal worth to guarantee the loan. Similarly, Mahmood alone allegedly fraudulently obtained a $1.2 million loan from Devon Bank to build a high-rise condominium building at 2215 Madison St., Chicago.
The government is being represented by Assistant U.S. Attorney Sunil Harjani.
The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.
Each count in the indictment, except the conspiracy count against Mahmood, carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine. The Court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, however, the Court must determine a reasonable sentence to impose under the advisory United States Sentencing Guidelines.
An indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

ATLANTA—Mark Anthony McBride, 44, a/k/a “Charles Conley,” “Charles Conley, Jr.,” and “Manuel Evans,” of East Point, Ga., was sentenced today by United States District Court Judge Jack T. Camp on charges of conspiracy to commit bank, mail, wire, and bankruptcy fraud. McBride was also sentenced for violating the terms of his supervised release on a prior federal mortgage fraud conviction.
U.S. Attorney Sally Quillian Yates said, “The lengthy sentence imposed in this case reflects the damage this defendant did to dozens of banks, including the now-failed Omni National Bank, as well as his abuse of U.S. Bankruptcy courts in three states from his fraudulent filings designed to delay property foreclosures.”
McBride was sentenced to 16 years and two months in prison, to be followed by five years of supervised release, and ordered to pay $2,197,929 in restitution on the charges related to his latest mortgage fraud. He was also sentenced to a consecutive two years in prison for violating supervised release on his prior mortgage fraud conviction.
McBride pleaded guilty to the new charges and admitted his supervised release violations on April 24, 2009.
According to U.S. Attorney Yates and the information presented in court: In 2001, immediately upon release from prison on a prior bank fraud conviction, McBride began a mortgage fraud scheme that continued until 2002, when he reported for service of another federal prison sentence. In that scheme, McBride used unqualified borrowers to obtain fraudulently inflated loans. When he was released again from prison in November 2006, McBride was placed in a halfway house. The evidence showed that while under supervision at the halfway house, he was able to attend his own fraudulent loan closings. After his release from the halfway house, McBride continued his scheme of obtaining fraudulent mortgage loans, vehicle loans, lines of credit, credit cards, and other extensions of credit in his name, in his aliases, in the names of numerous stolen identities, and in the identities of other unqualified borrowers. These fraudulent loans continued until McBride was arrested in September 2008 for violating his supervised release. Dozens of banks and other lenders, including the now-failed “Omni National Bank,” funded fraudulent loans for McBride.
McBride generated mortgage loan proceeds for himself using inflated valuations for properties securing the loans, and shared those proceeds with his straw borrowers and other conspirators. He was able to retain fraud proceeds by filing eight fraudulent bankruptcy cases in Georgia, Alabama, and South Carolina. The last such fraudulent filing was a May 2008 petition in Atlanta, filed in a bogus name and stolen Social Security Number. The petition falsely stated he had never filed bankruptcy in the past.
Additional Omni-related prosecutions to date include:
• Jeffrey L. Levine, 68, of Atlanta, who pleaded guilty on January 14, 2010, to causing materially false entries that overvalued bank assets to be made in the books, reports, and statements of Omni, is scheduled to be sentenced on May 25, 2010, at 10:00 a.m. before United States District Judge Jack T. Camp.
• Delroy Oliver Davy, 37, of Lithonia, Ga., was charged in a criminal information on December 18, 2009, with bank fraud and conspiracy to commit bank, mail, and wire fraud in connection with a scheme to fraudulently obtain millions of dollars of mortgage loans from Omni and other lenders. A guilty plea is scheduled for May 11, 2010, at 2 p.m. before United States District Judge Jack T. Camp.
• Brent Merrill, 37, of Atlanta, pleaded guilty to making false statements to the Federal Deposit Insurance Corporation (FDIC) and aggravated identity theft on March 23, 2010. When facing foreclosure on 14 properties, Merrill attempted to arrange “short sales” in the names of people whose identities had been stolen to obtain forgiveness from the FDIC of $2.2 million in Omni loan payoffs. He is scheduled to be sentenced on May 25, 2010, at 10:00 a.m. before United States District Judge Jack T. Camp.
These cases are part of President Barack Obama’s Financial Fraud Enforcement Task Force.
President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
These Omni-related cases are being investigated by a Mortgage Fraud Task Force comprised of the U. S. Postal Inspection Service, Housing and Urban Development Office of Inspector General (OIG), the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC- OIG), Special Inspector General for the Troubled Asset Relief Program, and special agents of the FBI. Assistance in this case has also been provided by the Office of the U.S. Bankruptcy Trustee.
This case was prosecuted by Assistant U.S. Attorneys Gale McKenzie and Chris Bly.
For further information please contact Sally Q. Yates, U.S. Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at 404-581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.

BIRMINGHAM—A 32-year-old Birmingham man pleaded guilty today in federal court to mail fraud charges connected to a mortgage fraud scheme that totaled more than $1 million, announced U.S. Attorney Joyce White Vance in conjunction with FBI and Housing and Urban Development officials.
AL CARSON ROCKETT, JR., was charged in a five-count information filed in U.S. District Court in Birmingham and pleaded guilty today before U.S. District Judge R. David Proctor to all charges. He agreed to forfeit $1,090,046 to the government as proceeds of illegal activity.
The four mail fraud counts involve parcels containing mortgage-application documents sent by a private postal carrier from Birmingham to mortgage companies in June, July and August 2005. The mortgage fraud ring operated between 2004 and 2006, according to court documents. Count Five of the information sought the forfeiture from Rockett.
According to Rockett’s plea agreement, he conducted the mortgage fraud as follows:
Rockett convinced people they could buy houses from him without any down payment or closing costs and without the need for documents to support a loan application. Buyers were told the houses were ready to be used as government-subsidized rental properties, that tenants were available to move in immediately and rent payments would exceed the mortgage payments. In many instances, however, there were no tenants, the buyers couldn’t make the mortgage payments, and the properties quickly fell into foreclosure.
On other loans, Rockett stated on loan documents that buyers were making down payments when, in fact, Rockett was making the payment.
Finally, none of the loan documents disclosed Rockett was paying each buyer between $3,000 and $10,000 as an inducement to buy his properties. The mortgage loan documents involved required that all cash payments between a buyer and seller associated with a real estate transaction be disclosed.
“This case is a clear example of the dangerous fraud that has permeated our real estate markets,” Vance said. “This prosecution should send a clear signal to anyone who has, or might consider falsifying any type of loan documents that it is our goal to investigate every case and bring the perpetrators to justice. This is not just a question of addressing losses to our financial community,” she said. “We have seen the value of our homes plummet and our communities put at risk by individuals who steal, lie and abuse the system. When a person lies on loan documents and then goes into foreclosure, we all suffer.”
HUD Inspector General Kenneth Donohue said Rockett’s case is an example of how his office, working with law enforcement agencies and U.S. Attorneys’ Offices across the country, will pursue individuals who are participating in mortgage fraud schemes, which are eating away at the economic heart of this country. “We will use whatever means necessary—both civil and criminal—to isolate and punish mortgage companies’ leadership and personnel who are corroding the soundness of HUD programs,” Donohue said.
“Mortgage fraud tears at our economy and threatens the American dream,” said FBI Special Agent in Charge Patrick Maley. “As the mortgage fraud problem continues to grow, the people of North Alabama can be assured that the FBI, along with our law enforcement partners, will be there to aggressively investigate and bring to justice those who would work to defraud financial institutions through lies and deceit,” he said.
The maximum sentence for each mail fraud count is 20 years in prison and a $1 million fine.
Special agents of the FBI and HUD’s Office of Inspector General investigated the case. Assistant U.S. Attorney Patrick Carney prosecuted it on behalf of the United States.

HOUSTON—Vincent Wallace Aldridge and Tori Aldridge, both of Fresno, Texas, surrendered themselves to federal authorities as a result of the return of a 19-count indictment arising from an alleged scheme to defraud residential mortgage lenders of more than $3.7 million in connection with home purchases in the Houston area, United States Attorney José Angel Moreno, FBI Special Agent in Charge Richard C. Powers, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Rodney E. Clarke announced today. Vincent Aldridge, 45, is a former fee attorney of First Southwestern Title Company and attorney with Aldridge and Associates, while Tori Aldridge, 32, is a former employee of the same title company.
Vincent and Tori Aldridge surrendered to special agents of the FBI and IRS-CI at the FBI this morning and both are expected to make their initial appearances before U.S. Magistrate Judge John R. Froeschner in Houston later today. A third defendant, Gilbert Barry Isgar, 50, of Katy, Texas, the co-owner of Waterford Homes, appeared before U.S. Magistrate Judge John R. Froeschner earlier this week pursuant to a summons. Isgar was arraigned and his case was set for jury selection and trial before U.S. District Court Judge Sim Lake on May 24, 2010.
The 19-count indictment returned by a Houston grand jury on Thursday, March 25, 2010, accuses Vincent Aldridge, Tori Aldridge, and Isgar of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and money laundering.
According to the allegations in the indictment, Vincent and Tori Aldridge and Isgar conspired to devise and execute a scheme during 2004 and 2005 to receive proceeds from real estate transactions based upon materially fraudulent information that was intentionally supplied to at least three lending institutions as the basis for an agreement between the lending institutions and borrowers.
Vincent Aldridge allegedly lured borrowers by representing the scheme as an investment opportunity. For the use of the borrowers’ credit to obtain mortgage loans, they were promised $10,000 after the closing of their respective property. They were also allegedly told that the property would be sold after a year for a profit. Once a borrower agreed to the deal, Vincent Aldridge and Tori Aldridge acting as both an escrow officer and a loan processor and met with the borrower to obtain the necessary personal identifying information to complete the borrower’s lending package.
Prior to the submission of the lending packages to the lending institutions, it is alleged that Vincent and Tori Aldridge modified the lending package to enhance the borrower’s ability to qualify for the requested loan. These enhancements, according to the indictment, included fraudulently overstating the borrower’s income, misrepresenting the borrower’s principal residence as rental property and misrepresenting the purchase property as the principal residence. The mortgage loans totaled approximately $3,700,000. Each property sold in amounts between $344,000 and $365,000 and were funded to First Southwestern Title Company by wire.
As a part of the scheme, the indictment alleges that Isgar, co-owner of Waterford Custom Homes, inflated the sales price of the properties to be purchased by the aforementioned recruited borrowers. As a part of the alleged illicit agreement between the Aldridges and Isgar, the Aldridges were to receive the proceeds of their scheme by including disbursement authorizations for attorney’s fees signed by Isgar to the title company prior to closing. These amounts were listed on the loan closing documents as seller disbursements for attorney fees and were in addition to the attorney’s fees stated on the attorney fee line in the closing documents.
Once the loans were funded to the title company, the Aldridges are accused of causing several checks to be drawn on the account of the title company, each totaling more than $10,000, payable to a bank account controlled by Aldridge & Associates. The checks totaled approximately $442,089 and represented a portion of the illicit proceeds obtained through the mortgage fraud scheme.
The maximum penalty, upon conviction, for the conspiracy to commit wire fraud and each of the 11 wire fraud counts is 20 years in prison as well as substantial fines. The maximum penalty for the conspiracy to launder money and for each of the six money laundering counts is 10 years in prison. A conviction for money laundering carries the most significant fine of $250,000 or twice the amount of the criminally derived property, whichever is greater.
Assistant United States Attorney Jennifer Lowery is prosecuting the case.
The investigation leading to the charges was conducted by the FBI and IRS-CI, members of President Obama’s Financial Fraud Task Force. The President established the interagency Financial Fraud Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task fforce includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

NEWPORT NEWS, VA—Yvonne L. Robertson, 44, of Hampton, Va., was convicted late Wednesday afternoon by a federal jury of engaging in a mortgage fraud scheme.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement. Robertson faces a maximum penalty of 30 years on the conspiracy and mail and wire fraud counts, 10 years on the counts charging engaging in monetary transactions in property derived from unlawful activity, and 10 years on the false statement count.
Robertson was first indicted on Feb. 9, 2010, along with, Maria Henderson, 41, of Virginia Beach, Va., on charges of conspiracy to commit mail and wire fraud, as well as 11 separate mail and wire fraud counts. Joseph M. Garner, Jr., 49, of Virginia Beach, Va., was charged separately by criminal information on Feb. 8, 2010, with mail fraud. A superseding indictment, returned by a federal grand jury in May, 2010, added charges of engaging in monetary transactions in property derived from unlawful activity, as well as making materially false statements to an agent of the United States.
According to the superseding indictment, from November 2006 through May 2009, Robertson operated a real estate investment and property management business known as Angel’s Touch Real Estate Investments, LLC located in Virginia Beach, Va. In the course of business, Angel’s Touch would identify investment properties in the Tidewater area for purchase. Robertson signed contracts for the purchases but often assigned the contracts to other individuals (“strawbuyers) for purchase with promises that she would arrange for the down payment funds and closing costs, that she would then manage the properties by finding renters, collecting rental payments, and making mortgage payments, and that individuals would received cash back from loan proceeds of the property. Robertson caused false information to be presented to lenders in order to obtain the mortgage loans for the straw buyers. Robertson also failed to deliver on her promises to the borrowers, but fraudulently obtained proceeds from the closings for herself and her company. Robertson routed these proceeds, by wire transfer, into the accounts of various other individuals and, on one occasion, caused money returned to a strawbuyer to be given to Robertson through a cashier’s check.
Henderson was a loan officer for a number of companies engaged in mortgage brokering services, including Yourturn Finances and Mortgage Star, Inc. Henderson was responsible for taking mortgage loan applications and seeking a mortgage lender for which she received commissions based on the loans she processed. Garner submitted false mortgage documents, through Henderson, to purchase a property for Robertson indicating that he would be the primary occupant. Instead, following closing, the property was occupied by a renter. After a short period of time the property went into default and the renter was evicted.
Henderson pled guilty to conspiracy to commit mail and wire fraud on April 6, 2010, and was sentenced to 120 months imprisonment and ordered to pay restitution in the amount of $230,000.00. Garner pled guilty to a criminal information alleging mail fraud on March 16, 2010 and was sentenced to five years probation and ordered to pay $29,600.00 in restitution. Robertson is scheduled to be sentenced on March 22, 2011.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Brian J. Samuels and Special Assistant United States Attorney Eric Olshan prosecuted this case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.

NEWARK, NJ—A real estate investor and property manager residing in Union City, New Jersey pleaded guilty today to conspiring to launder money in order to make contributions to public officials in Union City in exchange for favors, U.S. Attorney Paul J. Fishman announced.
Itzhak Friedlander, 42, pleaded guilty before U.S. District Judge Jose L. Linares to a one-count criminal information charging him with conspiracy to launder money to conceal and disguise unlawful activity.
At his plea hearing, Friedlander admitted that from June 2007 to August 2008, he conspired with a cooperating witness and co-conspirators Michael Altman and Shimon Haber to launder money from the cooperating witness through Friedlander’s account at a purported charitable entity called Gmach Shefa Chaim. The funds were represented by the cooperating witness to be proceeds of unlawful activities—namely, bank fraud, trafficking in counterfeit goods, and concealment of property from a federal bankruptcy court and trustee. According to the Information to which Friedlander pleaded guilty, the conspirators planned to funnel the money through Gmach Shefa Chaim to public officials in Union City in exchange for approvals for developing a Union City property. Friedlander admitted that the value of funds that he conspired to launder was approximately $175,000.
Friedlander’s guilty plea stems from a two-track undercover Federal Bureau of Infestation (“FBI”) investigation into public corruption and international money laundering—which resulted in the charging of 44 individuals in criminal complaints on July 23, 2009. At that time, Altman, 40, of Monsey, New York, was charged in a criminal complaint with conspiracy to launder money and conspiracy to obstruct commerce by extortion under color of official right; Haber, 34, of Brooklyn, New York, was charged via criminal complaint with conspiracy to launder money. On January 14, 2010, Haber pleaded guilty before U.S. District Judge Jose L. Linares to a onecount criminal Information charging him with conspiracy to launder money to conceal and promote unlawful activity. Haber is scheduled to be sentenced before Judge Linares on May 25, 2010. On January 28, 2010, a grand jury returned a 41-count Indictment against Altman, alleging money laundering, bribery, and attempted obstruction of commerce under color of official right. The case against Altman is pending.
The charge to which Friedlander pleaded guilty carries a maximum statutory penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Judge Linares continued Friedlander’s release on a $250,000 bond pending sentencing, which is scheduled for July 14, 2010.
In determining an actual sentence, Judge Linares will consult the advisory U.S. Sentencing Guidelines, which recommend sentencing ranges that take into account the severity and characteristics of the offenses, the defendant’s criminal history, if any, and other factors, including acceptance of responsibility. The judge, however, has discretion and is not bound by those guidelines in determining a sentence.
Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all of that time.
Fishman credited Special Agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, and Special Agents of the Internal Revenue Service Criminal Investigation Division, under the direction of Special Agent in Charge William P. Offord, for the investigation leading to today’s guilty plea. The case against Friedlander is being handled by Assistant U.S. Attorney Dustin Chao of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
The charges and allegations contained in the Indictment against Altman are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Attorneys: Stacy Ann Biancamano, Esq; Timothy M. Donohue, Esq., West Orange, NJ

CAMDEN, NJ—Three New York residents pleaded guilty today to their roles in a conspiracy to commit a million-dollar mortgage fraud involving residential properties in Atlantic City, New Jersey, U.S. Attorney Paul J. Fishman announced.
Tula Rampersaud, 31, her husband, Sudesh Rampersaud, 31, both from Hollis, New York, and Steven Boswell, 60, of Flushing, New York, each pleaded guilty before United States District Judge Renée M. Bumb to separate one-count informations charging them with conspiracy to commit wire fraud. The three guilty pleas are the latest phase in an ongoing investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation Division into fraudulent mortgage loans in southern New Jersey.
According to the informations to which the defendants pleaded guilty, other documents filed in this and related cases, and statements made in court:
The Rampersauds and Boswell conspired with Jong Shin and others, from June through December 2006, to obtain more than a million dollars of mortgage loans for unqualified borrowers in order to purchase seven houses in Atlantic City at inflated prices. Shin was indicted with conspiracy to commit wire fraud and conspiracy to commit money laundering on March 24, 2010. The case against Shin is pending.
At their guilty plea hearings, Tula Rampersaud, Sudesh Rampersaud, and Boswell admitted that they served as “straw purchasers” for Shin, falsifying financial information on mortgage documents and purchasing properties in return for promises of cash payments. Tula Rampersaud stated that she met Jong Shin while they were colleagues at a home health care company, and that she was promised $5,000 in return for purchasing a property. Boswell admitted that he had previously been married to Shin, and was promised $3,000 in return for his role in the scheme.
In exchange for purchasing properties in their names, Shin promised the Rampersauds and Boswell that they would not have to pay deposits or closing costs to acquire the properties, would not have to make monthly mortgage payments, and would receive cash after the closing for allowing their names and credit information to be used to buy the properties. In completing the borrowers’ loan applications, the coconspirators claimed fake employers, inflated incomes, false bank account balances, and fictitious assets in order to induce the lenders to extend the mortgage loans. The count of conspiracy to commit wire fraud to which the defendants pleaded guilty carries a maximum sentence of 30 years in prison and a maximum fine of not more than $1 million. Sentencing for all three defendants is scheduled for August 2, 2010, before Judge Bumb. Pending sentencing, all three defendants were released on a personal recognizance bond of $100,000.
In determining the actual sentences, Judge Bumb will consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, a defendant’s criminal history, if any, and other factors. The Judge, however, is not bound by those Guidelines in determining a sentence. Parole has been abolished in the federal system and thus defendants who are given custodial terms must serve nearly all the time imposed by the court.
Fishman credited Special Agents of the Federal Bureau of Investigation’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Michael Ward in Newark, New Jersey, and Special Agents of the Internal Revenue Service – Criminal Investigation Division’s May’s Landing Office, under the direction of Special Agent in Charge William P. Offord, for their investigation leading to the guilty pleas.
The Government is represented by Assistant U.S. Attorney Diana Carrig of the Criminal Division in Camden.
The charges and allegations contained in the Indictment against Jong Shin are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense Attorneys:
Tula Rampersaud is represented by Kalman Geist, Esq., West Patterson, N.J.
Sudesh Rampersaud is represented by Joseph T. Afflito, Sr., Esq., Wayne, N.J.
Steven Boswell is represented by Mark Musella, Esq., Hasbrouck Heights, N.J.

LAS VEGAS—Joseph D. Milanowski, 48, former officer of the real estate development investment company USA Capital, was sentenced today by Chief U.S. District Judge Roger L. Hunt to 12 years in prison and ordered to pay $86.9 million in restitution to over 1,000 victims for his guilty plea to one count of wire fraud, announced Daniel G. Bogden, U.S. Attorney for the District of Nevada.
Milanowski’s sentence included enhancements because the loss was greater than $50 million, and because the defendant abused a position of private trust to facilitate the commission of the offense. Milanowski was allowed to self-report to federal prison by August 6, 2010, at noon, but must continue to cooperate with the government and U.S. Bankruptcy trustees during that period of release.
Milanowski was the President and de facto Chief Operating Officer of USA Commercial Mortgage Company, which did business as USA Capital from 1998 through April 2006. USA Capital raised money from investors to loan to developers for the construction of real estate. In May 2000, USA Capital created the Diversified Fund to make secured loans to the developers and to pay the investors interest on the loans. Milanowski and others represented to investors that all of the loans made by the Diversified Fund would be secured by first deeds of trust. Investors were also advised that no loans would be made to company insiders, that no loans larger than $20 million would be made once the Diversified Fund reached a certain value, that no loan would exceed 15 percent of the value of the Fund, and that the Fund would not loan more than 25 percent of its funds to a single borrower.
On about April 15, 2002, Milanowski created a loan known as the “10-90 Loan” which he used to fund private developments and investment projects for himself and other company insiders and affiliates. From about March 27, 2003, to about November 12, 2004, Milanowski transferred approximately $22 million to 10-90 Inc. and to another entity he controlled to fund his own development projects. Milanowski and others concealed the existence of the 10-90 Loan from investors until September 30, 2005, when Milanowski included the 10-90 Loan on a list of the Diversified Fund’s loan portfolio in which he claimed that the 10-90 Loan was secured by three master-planned communities in Southern California when he knew that the loan was not secured by three communities. When USA Capital Mortgage Company and the Diversified Fund filed for bankruptcy on April 13, 2006, Milanowski had caused the Diversified Fund to attribute $55.9 million of its principal to the 10-90 Loan. The investigation of USA Capital is ongoing.
The case was investigated by the FBI, and prosecuted by Assistant United States Attorneys Daniel R. Schiess and Roger Yang.
This prosecution is sponsored by President Barack Obama’s Financial Fraud Enforcement Task Force, http://www.justice.gov/opa/pr/2009/November/09-opa-1243.html. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

JEFFERSON CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that the former owner of a car dealership in Columbia, Mo., was sentenced in federal court today for a $1.7 million bank fraud scheme.
Gregg Dean Woods, 49, of Columbia, was sentenced in federal court today to two years and three months in federal prison without parole. The court also ordered Woods to pay $1,340,631 in restitution.
On Oct. 22, 2009, Woods pleaded guilty to bank fraud. Woods was the owner of Woods Auto Gallery, Inc., a business in Columbia that primarily sold pre-owned, luxury vehicles and provided service for the vehicles.
Woods admitted that he was engaged in a scheme to defraud Bank Star One, a financial institution with headquarters in Festus, Mo., from September 2006 to May 2007. Woods had a floor plan agreement, a related security agreement and a commercial security agreement with Bank Star One, along with a $1.9 million line of credit. Under the terms of those agreements, Woods was required to use the line of credit to purchase vehicles as inventory for resale, then provide Bank Star One with payment for any amounts financed once the vehicles were sold.
On several occasions, Woods sold vehicles on consignment. Contrary to his agreements with Bank Star One, Woods was advanced money against his existing line of credit for those vehicles. In each instance, Woods purposefully made false representations to Bank Star One in order to inappropriately have funds advanced.
For example, Woods was advanced $254,500 against his line of credit for a Bentley, a Mercedes, a BMW, and a Hummer, each of which he was selling on consignment. Since these transactions were on consignment and Woods did not incur any costs for the vehicles, there was no need for an advance. If Woods had revealed this information to Bank Star One, the bank would not have advanced him any money. When Woods sold the BMW and Hummer, he failed to notify Bank Star One of the transactions and failed to pay proceeds from the sales to the bank. The Bentley and Mercedes were repossessed by Bank Star One.
Woods misrepresented to Bank Star One his inventory and the status and quality of Woods Auto Gallery’s collateral by falsely stating the quantity of vehicles in inventory, and falsely representing the status of vehicles, their outstanding liens, and other existing financing. Woods sold vehicles but failed to report the sales and transfer the proceeds of those sales to Bank Star One. Woods sold some consignment vehicles to new customers without having paid off outstanding liens or obtained clear titles to the vehicles. In certain instances, Woods sold the vehicles and then failed to pay the original owners the agreed upon sales proceeds.
This case was prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the Federal Bureau of Investigation and the Missouri State Highway Patrol.

SPRINGFIELD, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that the owner of Guaranty Title, formerly headquartered in Nixa, Mo., pleaded guilty in federal court today to his role in a $2.7 million wire fraud conspiracy and money laundering.
Richard G. “Rick” Burton, 59, of Nixa, pleaded guilty before U.S. Magistrate Judge James C. England this morning to conspiracy to commit wire fraud and conspiracy to commit money laundering. Burton was charged in a Nov. 17, 2009, federal indictment.
Burton admitted that he participated in a scheme to defraud financial institutions of more than $2.7 million through a series of illegal financial transfers related to stolen escrow payments. Burton attempted to conceal his criminal activities through a substantial check-kiting scheme.
Burton was the president and majority owner of Guaranty Title Company of Southwest Missouri, Guaranty Title Company d/b/a Guaranty Title and Closing Company, and Guaranty Properties, Inc. The companies, referred to collectively as Guaranty, provided real estate title and closing services. Guaranty’s main office was located in Nixa, with at least 10 branch offices located in Aurora, Branson, Mount Vernon, Ozark, Springfield, and Republic, Mo.
Conspiracy to Commit Wire Fraud
Burton admitted that, from May 12, 2005, to June 18, 2007, he defrauded mortgage companies and individual customers of escrow money which had been wired to Guaranty to pay real estate closing costs.
When real estate buyers and sellers hired Guaranty to facilitate the closing of real estate contracts, Guaranty agreed to hold buyers’ money for closing costs in an escrow funds account separate from funds that Guaranty owned. Guaranty was prohibited from commingling that escrow money with the firm’s business operations money, because it did not own the escrow money it received.
Burton admitted that he took a portion of the escrow money that had been transferred into these escrow accounts. In violation of Guaranty’s promise not to do so, Burton caused $2,040,937 of stolen escrow funds to be diverted into the firm’s business operations account and used the money for the day to day business operations of Guaranty.
Burton instructed Guaranty’s in-house bookkeeper to record deposits of stolen escrow money into Guaranty’s business operations account as loans, including loans from a fictitious company called “K & S Investments,” which was created to help conceal the source of the deposits.
By April 2007, deposits into Guaranty’s main escrow account no longer covered shortages caused by the theft of escrow funds. Burton assisted in concealing this shortage by causing checks to be written and deposited between various accounts held by Guaranty at Great Southern Bank and Ozark Mountain Bank that did not contain sufficient funds to cover the checks. This check-kiting scheme continued until June 18, 2007, when Old Missouri Bank discovered the fraud and closed the bank account. As a result of this check kiting, Burton caused Ozark Mountain Bank to lose approximately $682,954.
Conspiracy to Commit Money Laundering
Burton admitted that he participated in a conspiracy to commit money laundering from May 12, 2005, to June 18, 2007. Burton conducted financial transactions that involved the proceeds of the wire fraud and bank fraud conspiracies, in order to promote that criminal activity and to conceal the source of the proceeds of the unlawful activity.
Under federal statutes, Burton is subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $1,250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation, and the Missouri Department of Insurance, Financial Institutions and Professional Registration.

TRENTON, NJ—Edivaldo dos Santos and Rosa Damasceno each pleaded guilty today to conspiring to commit mortgage fraud, admitting that they attempted to use false documents to secure a fraudulent mortgage loan, U.S. Attorney for the District of New Jersey Paul J. Fishman announced.
Dos Santos, 52, of Harrison, N.J.; and Damasceno, 59, of Belleville, N.J., were originally charged in June 2010 as part of a coordinated mortgage fraud takedown in which 28 defendants were charged for their alleged roles in various mortgage fraud schemes in northern New Jersey.
The defendants entered their guilty pleas to informations charging them with conspiracy to commit wire fraud before U.S. District Judge Freda L. Wolfson in Trenton, N.J., federal court.
According to documents filed in this case and statements made during the defendants’ guilty plea proceedings, dos Santos was a former loan officer holding himself out as a mortgage consultant; Damasceno was the owner of a Newark-based company that provided tax services and driver education in Belleville, N.J.
In August 2009, dos Santos asked a loan officer at a New Jersey mortgage company to act as a loan officer on a real estate transaction in which a client would buy a property and then receive money back from the seller at closing. The prospective purchaser was not qualified to obtain the loan, so dos Santos and others provided falsely inflated income information in support of his application. Damasceno created fraudulent W-2 forms in furtherance of the fraud.
At sentencing, dos Santos and Damasceno each face up to 30 years in prison and a fine of $1 million, or twice the gross gain or loss from the conspiracy. Sentencing is currently scheduled for both defendants on Feb. 16, 2011.
U.S. Attorney Fishman praised agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Edward J. De Fazio, for their work leading the investigation of this case. He also credited the other members of the Mortgage Fraud Task Force, including the Department of Housing and Urban Development Office of Inspector General; the Internal Revenue Service; the U.S. Secret Service; and the U.S. Postal Inspection Service for their important contributions to the investigation. Fishman also thanked the Department of Homeland Security’s Customs and Border Protection and U.S. Citizenship and Immigration Services; the U.S. Social Security Administration; and the New Jersey Attorney General’s Office for their assistance.
The government is represented by Assistant U.S. Attorneys Christine Magdo and Charlton A. Rugg of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

NEW ORLEANS, LA—United States Attorney Jim Letten announced that CHARLOTTE TROXLER, 46, of Luling, Louisiana, pled guilty as charged to a bill of information filed on September 24, 2010 charging TROXLER with three counts of defrauding First American Bank in connection with the theft of funds during her employment with Benson Properties, Benson Football L.L.C., and ; as well as Leson Chevrolet Company and Ray Brandt Automobile Dealerships.
TROXLER worked for Benson as a financial assistant from on or about 1985 through on or about March 2006; Leson as a financial controller from on or about August 2009 through on or about November 2009; and Ray Brandt as a financial controller from on or about November 2008 through on or about July 2009. TROXLER stole approximately $1.1 million by creating unauthorized payees on company checks and then depositing the stolen funds into accounts controlled by her, including TROXLER’s First American Bank account. TROXLER misrepresented her authority when she deposited stolen checks into her First American Bank account thereby subjecting First American Bank to risk of civil liability and financial loss.
TROXLER faces a possible maximum sentence of 30 years’ imprisonment, a fine of $1 million, and up to five years of supervised release as to each count of bank fraud (18 U.S.C. § 1344) charged in the bill of information. he defendant may also be required to forfeit up to $1.1 million. Sentencing is set for March 2, 2011.
This case was investigated by members of the Jefferson Parish District Attorney’s Office, Jefferson Parish Sheriff’s Office, and the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney James R. Mann.

CINCINNATI—A jury in U.S. District Court found Bernard J. Kurlemann, 57, of Mason, guilty of conspiracy and fraud.
Kurlemann participated in a mortgage fraud scheme to deceive lending institutions by agreeing to sell high-end luxury properties to “straw buyers” and submitting false information on purchase contracts and other loan documents regarding down payments that were never made to the defendant’s companies. The defendant benefitted from the fraud by walking away from approximately $3.5 million in mortgage debt and receiving approximately $500,000 in seller’s proceeds.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Richard Cordray; Warren County Prosecuting Attorney Rachel Hutzel; Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation (FBI); Daniel M. McDermott, U.S. Trustee, Region 9; and other task force participants announced the verdict returned today at the conclusion of a trial that began with jury selection on October 20, 2010 before U.S. District Judge Timothy S. Black.
The jury convicted Kurlemann of all counts against him in an indictment returned in January 2010 including one count of conspiracy to commit loan fraud, punishable by up to five years’ imprisonment, and two counts of loan fraud, each punishable by up to 30 years’ imprisonment. The law also requires restitution to the lenders.
The scheme involved “straw buyers”—individuals who would purchase properties in name only. According to testimony presented at the trial, Kurlemann was a homebuilder who was part of the scheme. Kurlemann owned and operated a number of residential development construction businesses, two of which were known as Kurlemann Homes of Long Cove and Long Cove Management, LLC, Mason, Ohio.
The jury also convicted Kurlemann of one count each of bankruptcy fraud, concealment of assets, and making false oaths, for hiding an asset from the bankruptcy trustee and his creditors when his company, Kurlemann Builders, Inc., filed for bankruptcy in 2008. Those crimes are each punishable by five years’ imprisonment. Three others charged with Kurlemann in January 2010 have pleaded guilty.
Eric D. Duke, 36, Newport, Kentucky pleaded guilty on September 14, 2010 to three counts of conspiracy, and four counts of fraud. Duke is a self-employed tax preparer and interior designer. He also owned a property management company called Rivendale Property Management Group, L.P., in Maineville, Ohio.
Terrence J. Monahan Jr., 36, Cincinnati, formerly with Huntington National Bank, pleaded guilty on October 18, 2010 to one count of making a false statement to the U.S. Department of Housing and Urban Development.
Bryan Sanneman, 38, of Mason, owner of Sanneman Homes, Inc. pleaded guilty on September 3, 2010 to two counts of conspiracy to commit loan fraud. All three are awaiting sentencing.
The charges were the result of a two-year investigation by the Greater Cincinnati Mortgage Fraud Task Force. Judge Black has set sentencing for February 9, 2011.
Two of the straw buyers also pleaded guilty to charges connected with their roles in the scheme. Francisca Webster, 46, of Cincinnati, pleaded guilty to conspiracy to commit wire fraud. Christopher Gagnon, 37, of Florence, Kentucky pleaded guilty to loan fraud.
Stewart commended the investigation by the Greater Cincinnati Mortgage Fraud Task Force. The Greater Cincinnati Mortgage Fraud Task Force is a multi-agency, multi-jurisdictional initiative dedicated to combating the mortgage fraud problem in the Southern District of Ohio.
The case was prosecuted by Assistant United States Attorney Jennifer C. Barry and Special Assistant United States Attorney Bruce A. McGary of the Warren County Prosecutor’s Office.

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today that a 13-count indictment was unsealed today charging Douglas Heald, of Sacramento; Brandon Hanly, of Redding; and Jerad Maggi in a scheme to defraud mortgage lenders.
This case is the product of an extensive investigation by the FBI. Assistant United States Attorneys Matthew D. Segal and Jared C. Dolan are prosecuting the case.
The indictment alleges that in 2005 and 2006, the defendants altered appraisal documents and title reports in order to obtain $5 million in mortgage loans with $1.5 million in “cash out” loans that would not have been made but for their fraud. Nine of the mortgaged properties were in Redding and one was in Lodi.
Heald and Hanley self-surrendered today and were arraigned before United States Magistrate Judge Gregory G. Hollows today. They pleaded not guilty and are set to appear before U.S. District Judge William B. Shubb on December 21, 2010. Maggi is sought by the FBI.
The case stems from the successful prosecution of Joshua Gervolstad, a Redding mortgage broker who on July 12, 2010 was sentenced to three years in prison and ordered to pay $1.4 million in restitution.
The maximum statutory penalty for a violation of mail fraud and wire fraud is 20 years in prison and a $250,000 fine. The maximum statutory penalty for money laundering is 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The United States Attorney for the District of Connecticut announced that JOHN DeMILO, 42, of Branford, pleaded guilty today before United States District Judge Janet Bond Arterton in New Haven to one count of conspiracy to commit bank fraud stemming from his involvement in a multi-million-dollar bank fraud scheme.

According to court documents and statements made in court, DeMILO was the General Manager of Branford-based New England Cash Dispensing Systems, Inc. (“NECDS”), which was in the business of operating a network of automated teller machines (“ATMs”). Beginning in approximately March 2000, NECDS entered into an agreement with Domestic Bank of Cranston, Rhode Island, whereby NECDS would supply ATM services in conjunction with Domestic Bank, the victim in this case. The ATMs in the network were stand-alone machines located in various commercial establishments, such as convenience stores and gas stations, throughout several northeastern states, including Connecticut. While all of the ATMs in the NECDS network bore the logo of Domestic Bank, NECDS was responsible for contracting with merchants and placing the ATMs in their establishments, and would perform maintenance on the ATMs. Ultimately, there were three funding sources for ATMs within the NECDS network: Domestic Bank provided the cash for specified ATMs in the network, NECDS supplied cash for other ATMs in the network, and certain merchants supplied cash for other ATMs. Over the course of time, the number of ATMs in the network that were funded by Domestic Bank increased, while the number of ATMs funded by NECDS decreased.

In pleading guilty, DeMILO admitted that, from no later than 2007 to February 2010, he and others engaged in a conspiracy to defraud Domestic Bank of cash the bank supplied for use in the ATM network. As part of the scheme, DeMILO and others ordered cash from Domestic Bank by falsely representing that it would be used in a Domestic Bank-funded ATM, but then converted the cash for NECDS’s own purposes. When the cash was received by NECDS, DeMILO and his co-conspirators caused the sealed cash courier bags to be torn open, specific amounts of cash to be removed from those bags, typically in increments of $10,000, $6,000, or $4,000 per bag, and the cash to be used to refill ATMs that otherwise would have been loaded with NECDS’s own funds. DeMILO and his co-conspirators also engaged in a complex effort to hide the fact that funds had been diverted by “floating” funds supplied by the bank between ATMs and providing the bank with false accounting for its funds.

Domestic Bank ultimately lost approximately $4.8 million in funds that it had supplied to NECDS.

Judge Arterton has scheduled sentencing for January 28, 2011, at which time DeMILO faces a maximum term of imprisonment of 30 years.

On October 14, Joseph Sarlo, the former chief executive officer of NECDS, pleaded guilty to one count of conspiracy to commit bank fraud stemming from this scheme. He awaits sentencing.

This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Paul Murphy.

The United States Attorney for the District of Connecticut announced that JOHN DeMILO, 42, of Branford, pleaded guilty today before United States District Judge Janet Bond Arterton in New Haven to one count of conspiracy to commit bank fraud stemming from his involvement in a multi-million-dollar bank fraud scheme.
According to court documents and statements made in court, DeMILO was the General Manager of Branford-based New England Cash Dispensing Systems, Inc. (“NECDS”), which was in the business of operating a network of automated teller machines (“ATMs”). Beginning in approximately March 2000, NECDS entered into an agreement with Domestic Bank of Cranston, Rhode Island, whereby NECDS would supply ATM services in conjunction with Domestic Bank, the victim in this case. The ATMs in the network were stand-alone machines located in various commercial establishments, such as convenience stores and gas stations, throughout several northeastern states, including Connecticut. While all of the ATMs in the NECDS network bore the logo of Domestic Bank, NECDS was responsible for contracting with merchants and placing the ATMs in their establishments, and would perform maintenance on the ATMs. Ultimately, there were three funding sources for ATMs within the NECDS network: Domestic Bank provided the cash for specified ATMs in the network, NECDS supplied cash for other ATMs in the network, and certain merchants supplied cash for other ATMs. Over the course of time, the number of ATMs in the network that were funded by Domestic Bank increased, while the number of ATMs funded by NECDS decreased.
In pleading guilty, DeMILO admitted that, from no later than 2007 to February 2010, he and others engaged in a conspiracy to defraud Domestic Bank of cash the bank supplied for use in the ATM network. As part of the scheme, DeMILO and others ordered cash from Domestic Bank by falsely representing that it would be used in a Domestic Bank-funded ATM, but then converted the cash for NECDS’s own purposes. When the cash was received by NECDS, DeMILO and his co-conspirators caused the sealed cash courier bags to be torn open, specific amounts of cash to be removed from those bags, typically in increments of $10,000, $6,000, or $4,000 per bag, and the cash to be used to refill ATMs that otherwise would have been loaded with NECDS’s own funds. DeMILO and his co-conspirators also engaged in a complex effort to hide the fact that funds had been diverted by “floating” funds supplied by the bank between ATMs and providing the bank with false accounting for its funds.
Domestic Bank ultimately lost approximately $4.8 million in funds that it had supplied to NECDS.
Judge Arterton has scheduled sentencing for January 28, 2011, at which time DeMILO faces a maximum term of imprisonment of 30 years.
On October 14, Joseph Sarlo, the former chief executive officer of NECDS, pleaded guilty to one count of conspiracy to commit bank fraud stemming from this scheme. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Paul Murphy.

Earlier today, the last two of five defendants connected to a $20 million mortgage fraud scheme appeared in federal court in Minneapolis to plead guilty to charges in connection to that crime.
Before United States District Court Judge Ann D. Montgomery, Thanh Van Ngo, age 29, of Plymouth, pleaded guilty to one count of aiding and abetting wire fraud, and Dang Hai Nguyen, age 27, of Austin, Texas, pleaded guilty to one count of conspiracy to commit wire fraud. The two men were indicted, along with three co-defendants, on April 21, 2010. The co-defendants include Vince Long Nguyen, age 36, of Minneapolis; Jesse Steven Moxness, age 33, of Blaine; and Trung Quang Tran, age 28, of Minneapolis. The scheme involved 54 Minnesota homes and resulted in a $5 million loss to various mortgage lenders.
In their plea agreements, the defendants admitted operating the mortgage fraud scheme between 2006 and 2009. During that time period, Tran was either an owner or co-owner of several businesses that negotiated with builders to purchase residential properties at discount prices. Those properties were located in a number of Minnesota communities, including Buffalo, Coon Rapids, and St. Paul. Vince Nguyen was the owner of a business that handled real estate closings. Ngo worked as a loan officer and co-owned a company with Tran through which he too negotiated with builders to purchase residential properties at discounted prices. Moxness was a home builder, and Dang Nguyen worked to recruit real estate investors.
Ngo admitted that on November 28, 2006, he recruited a straw buyer to purchase a St. Paul residence, and that he reported false information about that buyer on the mortgage loan application so the buyer would qualify for a loan. Based on the fraudulent application, a $380,000 loan was awarded; and at closing, Ngo received a $70,753 kickback. Then, three days after closing, Ngo issued a $10,000 check to the straw buyer. The financial transactions were made via wire transfers. In all, Ngo was responsible for fraudulent activities involving 15 properties, with a related loss amount of approximately $1.7 million.
Dang Nguyen admitted that between 2007 and 2008, he too recruited straw buyers and produced fraudulent loan applications, which were then sent to various mortgage lenders and ultimately approved. Dang Nguyen also received a portion of the loan proceeds, as a “commission,” for each straw buyer he recruited. Dang Nguyen was responsible for illegal activity involving eight properties, with a related loss amount of approximately $1.3 million.
The co-defendants already have pleaded guilty. On November 3, 2010, Vince Long Nguyen pleaded guilty to one count of wire fraud. On October 29, 2010, Moxness, pleaded guilty to one count of conspiracy. And, on October 28, 2010, Tran, pleaded guilty to one count of wire fraud.
Specifically, Moxness admitted building homes that were then appraised for significantly more money than they were worth. Those homes were purchased by straw buyers through Tran and Ngo and, eventually, went into foreclosure. Moxness received a kickback of $15,000 for each residence built for the scam. Moxness was responsible for criminal activity involving nine properties, with a resulting loss amount of approximately $1 million.
Tran admitted recruiting investors with good credit to buy homes, promising them kickbacks of between $1,250 and $10,000 per purchase. Investors were told Tran’s company, Invescorp, would lease the purchased properties on their behalf and use the rental income to pay the investors’ mortgage payments and other property expenses. Investors were also told the properties would be sold for profit, to be shared by them and the defendants.
In addition, Tran admitted helping prepare false loan applications, which were submitted to mortgage lenders. Based on those fraudulent applications, more than $20 million in loan proceeds were approved. The proceeds were disbursed contrary to the understanding of the lenders, and Vince Nguyen admittedly provided false settlement statements to the lenders to conceal the fraud scheme. Tran was responsible for fraudulent activity involving 30 properties, with a related loss amount of approximately $4.8 million, while Vince Nguyen’s actions involved 34 properties, with a resulting loss amount of approximately $5 million.
For their crimes, the defendants face a potential maximum penalty of five years in prison on the conspiracy charge and 20 years on the wire fraud charge. Judge Montgomery will determine their sentences at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Christian S. Wilton.
This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The Task Force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

BOSTON—United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service Criminal Investigations, Boston Field Division; and Richard DesLauries, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, announced today that EDGAR CORONA pleaded guilty before U.S. District Judge Michael A. Ponsor to wire fraud and money laundering.
At today’s plea hearing, the prosecutor told the court that had the case proceeded to trial, the government’s evidence would have proven that from 1998 through 2002, Corona, 32, participated in a multi-million-dollar mortgage fraud scheme involving the sale of distressed properties at inflated prices. Corona served as a “runner,” who recruited prospective buyers for the land flippers. Twelve other individuals were previously convicted in the same scheme.
Judge Ponsor sentenced the defendant today to time served and three years of supervised release and advised the defendant that it was likely that he would be deported.
The case was investigated by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. It was being prosecuted by Assistant U.S. Attorney Karen Goodwin of Ortiz’s Springfield Branch Office.
Mortgage fraud is a key focus of the Department of Justice. The Department of Justice alongside its federal, state, and local partners is committed to investigating and prosecuting significant financial crimes. The Department is committed to combating discrimination and fraud in the lending and financial markets, and recovering proceeds for victims of financial crimes.

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that ALI HARIRI, a former executive at Atheros Communications, Inc. (“Atheros”), was sentenced today in Manhattan federal court to 18 months in prison for his participation in the largest hedge fund insider trading case in history. U.S. District Judge RICHARD J. HOLWELL, who imposed the sentence, also imposed a two-year term of supervised release and a $50,000 fine.
Manhattan U.S. Attorney PREET BHARARA said: “Ali Hariri’s sentencing provides another reminder of how pervasive insider trading has become and the lengths to which corrupt insiders will go to misuse confidential information for their own personal gain. It should also remind those who might contemplate similar crimes that we will ultimately find you, prosecute you, and convict you. This office is committed to stopping insider trading in its tracks to protect the integrity of our markets.”
According to documents previously filed in Manhattan federal court and statements made during HARIRI’s guilty plea proceeding:
From 2008 to March 2009, HARIRI, a vice president at Atheros, engaged in an insider trading scheme in which he obtained material, nonpublic information (“inside information”) relating to Atheros. HARIRI provided this inside information to ALI FAR, a hedge fund manager, for the purpose of executing profitable securities transactions. HARIRI knew that the information he provided to FAR was material and non-public, and he disclosed it in breach of fiduciary and other duties of trust and confidence that he owed to ATHEROS. In exchange for inside information regarding Atheros, FAR provided HARIRI with tips to buy and sell the stocks of other technology companies.
On March 3, 2010, HARIRI, 39, of San Francisco, California, pled guilty to conspiring to commit insider trading crimes. HARIRI also pled guilty to substantive securities fraud. FAR has also separately pled guilty to conspiring to commit insider trading crimes and to substantive securities fraud. He is awaiting sentencing.
Mr. BHARARA praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission. Mr. BHARARA noted that the investigation is continuing.
This case was brought in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a co-chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being handled by the office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys JONATHAN STREETER and REED BRODSKY and Special Assistant U.S. Attorney ANDREW MICHAELSON are in charge of the prosecution.