DALLAS—Three Dallas businessmen, Mark Manners, Robert L. Loeb, and Andrew Siebert, who were involved in a massive mortgage fraud scheme that they ran in the area, were sentenced this afternoon by U.S. District Judge Barbara M.G. Lynn, announced James T. Jacks, acting U.S. Attorney for the Northern District of Texas.

Mark Manners was sentenced to 30 months in prison, followed by three years of supervised release, and ordered to pay $1,762,362.71 in restitution.

Robert L. Loeb was sentenced to 18 months in prison, followed by two years of supervised release, and ordered to pay $2,027,841,34 restitution.

Andrew Siebert was sentenced to 60 months in prison, followed by three years of supervised release, and ordered to pay $2,027,841.34 restitution.

Their co-defendant in the scheme, Charles Cooper Burgess, 53, was sentenced in March 2008 to nearly 22 years in prison and ordered to pay more than $3 million in restitution for his role in this mortgage fraud scheme and another scheme involving golf course property in Arkansas. Burgess pled guilty in January 2006 to his involvement in two fraudulent schemes, one involving mortgage fraud and one involving defrauding individuals who invested in golf course property in Arkansas. In November and December 2006, Burgess testified about Manners and Siebert’s extensive role in the mortgage fraud scheme. At the conclusion of that trial, both Manners and Siebert were convicted.

Regarding the mortgage fraud scheme, Burgess admitted that he recruited 20 straw buyers with good credit but limited funds to sign loan and closing documents to purchase homes. As part of a signed “investor management agreement,” Burgess promised to provide the down payment at closing as well as make all mortgage payments. When Burgess’s company needed additional funds for borrower down payments, Siebert agreed to steal bank escrow funds for the borrowers’ down payment. As part of the scheme, Siebert also falsified settlement document on at least 20 loan closings. Siebert only agreed to steal these escrow funds if Burgess agreed to pay Siebert $5000 from each closing as a “kickback payment.” Evidence at trial showed that Siebert stole escrow funds on 20 separate loans and then concealed the theft of these lender funds by falsifying loan closing documents.

Siebert stole lender funds held in escrow and then provided these funds to Manners prior to closing so that Manners could purchase a cashier’s check in the name of the straw buyer. When Siebert received the cashier’s check back from Manners, Siebert falsely certified to the lender on the settlement statement that the down payment came from the borrower. On the settlement statement, Siebert also fraudulently accounted for disbursements to Burgess’ company by falsely listing the expense as a phony lien pay off, or as a “marketing and relocation fee” due to Burgess’ company. Eleven different lenders testified at trial that Siebert falsified the settlement statements to conceal his wrongful and fraudulent release of lender escrow funds. Each lender testified that the loan would never have been funded if the lender had known about the fraudulent use of lender escrow funds.

From December 2002 through March 2004, Siebert stole escrow funds which resulted in the loss of $2,027,841 to 16 different lenders. As a result of Siebert submitting false certifications on settlement statements for each of these 20 loans, Siebert and Manners fraudulently induced the disbursement of loans totaling more than $7 million.

Acting U.S. Attorney Jacks praised the investigative efforts of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of Inspector General. The case was prosecuted by Special Assistant U.S. Attorney William M. Martin of the U.S. Department of Justice Anti-Trust Division and Assistant U.S. Attorney David Jarvis.

ANCHORAGE, AK—United States Attorney Karen L. Loeffler announced that on August 21, 2009, lead defendant Lance Lockard was sentenced to 70 months in prison for his leadership of a large-scale mortgage fraud scheme.

Lockard was the ninth and last defendant to be sentenced for his role in the largest mortgage fraud investigation in Alaska’s history. In total, nine individuals and one corporate defendant were convicted and sentenced for their roles in a widespread, three-year long scheme to defraud some 13 mortgage lenders and banks in 57 different loan transactions netting over $1,700,000 in profits and over $2.5 million in losses to the financial institutions. United States District Court Judge Ralph Beistline, who presided over the case, sentenced the nine defendants to a total of 14 and ½ years of imprisonment, and imposed fines of over $90,000 and restitution of over $2.5 million dollars.

The defendants convicted as a result of the scheme are: Lance Lockard, of Anchorage, age 34, Gary Paterna, of Anchorage, age 62, Charles Carlson, of Anchorage, age 74, Holli Stroud, of Chugiak, age 30, Jonathan Ruf, of Anchorage, age 33, Keith Facer, of Anchorage, age 41, Don Murray, of Anchorage, age 35, Cerise Sanders, of Anchorage, age 31, and Alaska State Mortgage Company, Inc., of Anchorage.

Lockard, a licensed real estate investor and the lead defendant pled to 64 counts and was sentenced to 70 months and ordered to pay 2.5 million in restitution. Lockard also admitted the forfeiture allegation in an additional count, forfeiting his interest in $116,000 held in an investment account under his name. Charles Carlson, a licensed real estate appraiser, was sentenced on July 11, 2009, to 24 months and to pay restitution of $2,360,185. Holli Stroud, a title company loan closer, was sentenced on June 25, 2009, to 18 months and to pay restitution of $403,733.60. Keith Facer, a licensed real estate agent, was sentenced on May 29, 2009, to 16 months and to pay restitution of $221,065.24. Don Murray, a licensed real estate agent, was sentenced on May 19, 2009, to 21 months and pay restitution of $493,868.77. Cerise Sanders, a loan originator, was sentenced on May 19, 2009, to 12 months and one day. Jonathan Ruf, was sentenced on May 28, 2009, to 12 months and one day and to pay restitution of $1,066.390. Gary Paterna. Mr. Lockard’s father-in-law, was sentenced on May 18, 2009, to three days in jail and pay restitution of $1,162,884.86. Alaska State Mortgage, a local mortgage company, was sentenced on May 13, 2009, to a fine of $91,478.53. The defendants pled to a total of 64 counts charging conspiracy, wire fraud, bank fraud, and false statements to a financial institution.

The pleas and sentencing bring to a close the largest mortgage fraud scheme ever prosecuted in the District of Alaska. The fraud was perpetrated by professionals in all areas of the real estate industry. Between on or about December 23, 2003, and May 31, 2006, Lockard and his co-defendants arranged to purchase and sell real estate in Alaska, and to obtain mortgage loans for the purchase and sale of that real estate, through a series of fraudlent schemes that relied upon false and fraudulent statements, inflated appraisals, falsified down payments, nominee borrowers and purchasers, hidden cash-back payments and other improper practices that concealed the true details of the financial transactions from the mortgage lenders involved. The effect and result of this conduct was to transfer the investment risk from Lockard and the other co-conspirators to the mortgage lenders and to provide inflated profit and fraudulently obtained loan funds to Lockard and the other co-conspirators. The charges in the indictment to which the defendants pled guilty outlined a total of five separate schemes, involving properties in numerous Anchorage subdivisions, and two large undeveloped properties in the Talkeetna area.

According to the indictment, in the first scheme, Lockard, Paterna, his father-in-law, Carlson, the appraiser and Stroud, the loan closer, arranged for fraudulent loan documentation on the purchase of 10 properties. The indictment alleges that Lockard arranged for the simultaneous purchase and sale of the properties using Paterna as a nominee purchaser and that Carlson inflated the appraisals of the properties with Stroud falsifying the closing documents to conceal the fact that no down payments had been made.

The second scheme in the indictment charges that Lockard and Ruf with the aid of Carlson, Stroud and Cerise Sanders, and Alaska State Mortgage Company as loan originators arranged for Ruf, acting as a nominee for Lockard, to purchase13 separate properties on the same day, with all purchases fraudulently listed as purchases of his primary residence by Sanders and McCready acting for Alaska State Mortgage. According to the indictment, Carlson and Stroud, as in scheme one, inflated the appraisals and falsified loan closing paperwork. The indictment further alleges that the defendants, acting on behalf of Lockard sold the properties obtained through the fraudulent loans listed in schemes one and two to third-party buyers using further inflated appraisals provided by Carlson and illegal cash-back payments to the buyers aided by real estate agents Keith Facer and Don Murray to induce them to purchase the overpriced properties.

The indictment further alleges that Lockard, Stroud, Carlson, Ruf and Paterna engaged in similar fraud involving two other property purchases. It charges that Stroud and Lockard with the aid of an inflated appraisal provided by Carlson, arranged for Stroud to purchase a property with a falsified down payment. It further charges that Lockard, Paterna, Carlson, Stroud and Ruf again used nominees and falsified loan paperwork in a purchase financed by FNBA. Finally, the indictment alleges that Lockard engaged in a “bust out” scheme by purchasing properties with the aid of Paterna, Ruf and Carlson, at inflated prices with the purpose of taking the loan proceeds and defaulting immediately on the loans.

At Friday’s sentencing hearing, Judge Beistline concluded that Lockard was an organizer and leader of the criminal activity, that he had fraudeulently obtained more than $1 million in gross proceeds from the First National Bank of Alaska, and that his crimes caused total losses of approximately $2.5 million dollars. Judge Beistline commented that Mr. Lockard’s crimes were motivated by greed and had an impact on our community. In addition to the financial institutions that were defrauded, one of the individual victims testified at setencing about his personal financial losses, and his struggles to pay the mortgages on three duplexes he had unwittingly purchased for grossly inflated prices. Judge Besitline admonished that there was “no excuse for lying and deception, and no excuse for breaking the law,” and that Mr. Lockard was going to have to “face the consequences of the very poor choices he made.”

United States Attorney Karen L. Loeffler noted that these convictions and sentences point out the vast harm that can be done to an industry and the public when a handful of dishonest individuals are willing to falsify the documents and information on which the mortgage market relies.

Ms. Loeffler also commended the diligent and extensive investigation by special agents of the Federal Bureau of Investigation for their investigation that lead to this result.

Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced that a 25-count federal grand jury indictment in Cleveland, Ohio, was returned today against Kimberly Wilson, Michael Boyce, Beyond Wynn, Darlena Rogers, Drummell Coffey, Lawrence Calloway, Gerald Ford, Nafessah Walker, Travis Haynes, Antoinece Robin Boyd, Lavon Ruderson, Wesley D. Rahmon, and Robert M. Wilkes, Jr. in a mortgage fraud scheme involving 28 properties throughout the Cleveland area and over $3.25 million in mortgage loans. The indictment charges one count of conspiracy to commit wire fraud, and 24 counts of wire fraud.

Kimberly Wilson, age 37, currently resides in Shaker Heights, Ohio. Michael Boyce, age 46, has a last known address in Cleveland, Ohio. Beyond Wynn, age 36, currently resides in Shaker Heights, Ohio. Darlena Rogers, age 44, currently resides in South Euclid, Ohio. Drummell Coffey, age 39, has a last known address in Cleveland, Ohio. Lawrence Calloway, age 67, has a last known address in Cleveland, Ohio. Gerald Ford, age 39, currently resides in Euclid, Ohio. Nafessah Walker, age 35, currently resides in Warrensville Heights, Ohio. Travis Haynes, age 39, currently resides in Cleveland, Ohio. Antoinece Robin Boyd, age 39, currently resides in Cleveland, Ohio. Lavon Runderson, age 40, currently resides in Cleveland, Ohio. Wesley D. Rahmon, age 41, currently resides in Beachwood, Ohio. Robert M. Wilkes, Jr., age 41, currently resides in Cleveland, Ohio.

The indictment alleges that from June 2005 through January 2007, all 13 defendants conspired to fraudulently purchase 28 properties in the Cleveland area, securing over $3.25 million in mortgage loans. The indictment further alleges that as part of the conspiracy, Defendant Kimberly Wilson, a loan officer for Park Mortgage, completed and submitted fraudulent loan applications in the names of straw buyers (individuals who applied for mortgage loans on a property, but never intend to live in the home). The straw buyers included Defendants Drummell Coffey, Lawrence Calloway, Gerald Ford, Nafessah Walker and Travis Haynes, whose employment, income and assets were falsified in almost every loan application and who concealed the source of the down-payment funds in order to obtain the financing to purchase the 28 properties. The indictment alleges that Defendant Antoinece Robin Boyd assisted in the scheme by falsely verifying employment for Defendants Drummell Coffey and Nafessah Walker through her tax preparing company, Boyd Management, in order for them to qualify for mortgage loans.

The indictment further alleges that Defendants Lavon Ruderson, Wesley D. Rahmon and Robert M. Wilkes, Jr. appraised the properties for a value in excess of the true market value of the properties allowing Wilson, through her companies, Suburban Home Care and Landscaping, LLC and Dakaliote, LLC, to fraudulently profit by obtaining the excess funds from the mortgage loans for her personal use, and the use of other defendants, such as the straw buyers. Wilson induced the straw buyers to participate by promising they could purchase the properties with no money down and the straw buyers could receive cash back at closing. The indictment also alleges that Defendants Beyond Wynn, Darlena Rogers and Michael Boyce, sellers of 12 of the properties, were aware of, and profited from, the sale of their properties to the straw buyers at the inflated values. The defendants’ fraudulent conduct induced Long Beach Mortgage Company, Argent Mortgage Company, LLC, New Century Mortgage Company, WMC Mortgage Company, and Aegis Mortgage Company to fund the mortgage loans. The victim companies suffered a total loss of approximately $1,942,971 as a result of defendants’ scheme.

If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, each defendants’ role in the offense, and the characteristics of the violation. In all cases the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.

United States Attorney Steven M. Dettelbach stated, “Mortgage fraud is one of the top priorities of this office because of the far reaching and devastating economic impact on our community. We are focusing a significant portion of the office’s resources, along with our law enforcement partners, to find and prosecute the perpetrators of mortgage fraud in Northeast Ohio with a goal of eliminating it.”

This case is being prosecuted by Assistant United States Attorney Mark S. Bennett, following an investigation by the Cleveland Division of the Federal Bureau of Investigation.

An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

William J. Edwards, United States Attorney for the Northern District of Ohio, announced today that an information has been filed against Paul R. Tomko charging him with one count of mail fraud in connection with mortgage loans that were obtained fraudulently. According to court records, Tomko, age 36, resides in Middleburg Heights, Ohio.

The information alleges that from August 2003 through January 2005, Tomko and others who were not named executed a scheme to defraud Homecoming Financial Network and People’s Choice Home Loans in connection with twelve mortgage loans. The information further alleges that Tomko and others caused fraudulent loan applications to be processed through mortgage brokers, including CMS Home Loans in Elyria, Ohio, and Allstate Financial Group in Beachwood, Ohio. The information charges that Tomko utilized straw buyers to purchase properties and to obtain financing in their names. The information further charges that Tomko caused fraudulent appraisals to be prepared which falsely and artificially inflated the true values of the properties that were acquired and financed.

The information also alleges that the loan application packages that were submitted to the lenders included some or all of the following false and fraudulent documentation and information: inflated appraisals, source of down payment, rental income, lease agreements, and forged signatures. The information charges that Tomko and others fraudulently obtained twelve mortgage loans totaling nearly $1.2 million on properties located in the Cleveland, Ohio, area. It is further alleged that Homecomings Financial Network and People’s Choice Home Loans sustained significant losses as these mortgage loans went into default and the properties were sold through foreclosure.

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney John D. Sammon, following a joint mortgage fraud investigation by the Cleveland Offices of the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of the Inspector General.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

A 40-year-old lawyer from Hudson, Wisconsin, was sentenced earlier today in federal court in Minneapolis for stealing more than $3 million in a mortgage fraud scheme. United States District Court Judge Patrick J. Schiltz sentenced Jason Eric Fischer to 50 months in prison on one count of mail fraud and one count of money laundering. Fischer was charged on January 28, 2010, and pleaded guilty on February 9, 2010. Judge Schiltz also ordered Fischer to pay more than $3 million in restitution.

In his plea agreement, Fischer admitted that from 2006 through May of 2009, he orchestrated a scheme to divert funds from the escrow account at Real Source Title, a company he jointly owned and managed. The company, which had offices in Mahtomedi and Burnsville as well as in Illinois and Hudson, Wisconsin, routinely accepted wire transfers and checks from buyers and lenders. Those funds were to be held in escrow for the sole purpose of closing residential real estate transactions. Fischer, however, used the diverted funds for personal benefit.

Following today’s sentencing, Kelly R. Jackson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division’s St. Paul Field Office, said, “Mortgage fraud causes much harm to individuals, businesses, and our economy; but today’s sentencing is a strong reminder how serious our courts consider this criminal activity. Those who line their pockets with profits from these schemes should know they will be held accountable and brought to justice.”

To further his scheme, Fischer represented to buyers, lenders, underwriters, and others that the money deposited into the company’s escrow account was, in fact, used only to close real estate transactions. He made those representations by producing and mailing false HUD-1 settlement statements to people of interest. In truth, however, Fischer regularly withdrew escrow-account money to pay for personal and business expenses as well as to fund prior company real estate transactions. In 2008, for example, Fischer invested approximately $500,000 in escrow dollars into the opening and operation of a restaurant.

Between 2006 and May of 2009, Fischer diverted approximately $3 million from the escrow account at Real Source Title; and by May 2009, the account was depleted and unable to fund 15 loans. As a result, buyers, sellers, lenders, underwriters, and others suffered significant financial loss.

After today’s sentencing, Ralph S. Boelter, Special Agent in Charge of the Federal Bureau of Investigation’s Minneapolis Field Office, reminded the public that the FBI remains steadfast in its commitment to investigating mortgage fraud and related-fraud schemes aggressively. This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It was prosecuted by Assistant U.S. Attorney Joe Dixon.

HOUSTON—Today, a jury sitting in United States District Judge Sim Lake’s Courtroom found Vincent Wallace Aldridge, former fee attorney for First Southwestern Title Company and attorney for Aldridge and Associates, along with Tori Elyse Aldridge, a former employee of First Southwestern Title Company and Gilbert Barry Isgar, a co-owner of Waterford Homes, guilty of charges of wire fraud and money laundering in a scheme to defraud residential mortgage lenders of more than $3.7 million in loans in connection with home purchases in the Houston area, United States Attorney José Angel Moreno announced today along with FBI Special Agent in Charge Richard C. Powers and Internal Revenue Service-Criminal Investigations (IRS-CI) Special Agent in Charge Rodney E. Clarke.

Vincent Aldridge, 45, and Tori Aldridge, 32, both of Fresno, Texas (right outside of Houston), were found guilty of 19 counts which included conspiracy to commit wire and mail fraud, wire fraud, conspiracy to commit money laundering and money laundering charges. Isgar, 50, of Katy, Texas, was found guilty of 13 counts which included conspiracy to commit wire and mail fraud, wire fraud and conspiracy to commit money laundering.

Both of the Aldridges 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 four lending institutions as the basis for an agreement between the lending institutions and borrowers. Vincent Aldridge lured borrowers by representing the scheme as an investment opportunity. For the use of their credit to obtain mortgage loans, the borrowers were promised $10,000 after the closing of their respective property and that the property would be sold after a year for a profit. Once a borrower agreed to the deal, then Vincent Aldridge and Tori Aldridge, acting as an escrow officer and as a loan processor, met with the borrower to obtain the necessary personal identifying information to complete the borrower’s lending package. Prior to the Aldridges submitting the lending packages to the lending institutions, the Aldridges modified the lending package to enhance the borrower’s ability to qualify for the requested loan. These enhancements 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 $360,000 and were funded to First Southwestern Title Company by wire.

As a part of the scheme, 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 agreement between the Aldridges and Isgar, disbursement authorizations for attorney’s fees and additional contractor fees on brand new homes for amounts of $60,000 to more than $80,000 were signed by Isgar. These documents were provided to First Southwestern Title, which was controlled by the Aldridges. These disbursement authorizations were not provided to the lender and were not listed on the HUD Settlement Statement. The disbursements for additional attorney’s fees were in addition to the attorney’s fees stated on the attorney fee line in HUD Settlement Statement.

Once the loans were funded to the title company, the Aldridges caused several checks to be drawn on the account of the title company, each totaling amounts of $60,000 to more than $80,000, to Aldridge & Associates IOLTA bank account. The checks totaled approximately $442,089 and represented a portion of the illicit proceeds obtained through the mortgage fraud scheme. On one occasion, Isgar wired approximately $81,000 back to Vincent Aldridge’s account after he received the funds from the closing. The total amount of the money laundering was more than $500,000.

United States District Judge Sim Lake pronounced the defendants guilty and reset the case for sentencing on May 25, 2011, at 2:00 p.m. All of the defendants were permitted to remain on bond pending their sentencing hearings.

The maximum penalty for each wire fraud count is 20 years in prison as well as substantial fines. The maximum penalty for each money laundering count 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.

The investigation leading to the charges was conducted by the FBI and IRS-CI. Assistant United States Attorneys Jennifer Lowery and Andrew Leuchtmann are prosecuting the case.

Paid Over 15 Straw Purchasers and Used False Documents to Buy 25 Properties; Received Over $3.8 Million in Fraud Proceeds

BALTIMORE, MD—U.S. District Judge J. Frederick Motz sentenced Timothy Reed, age 45, of Beltsville, Maryland, today to 51 months in prison followed by five years of supervised release for mail fraud arising from the fraudulent purchase of 25 properties in Maryland, the District of Columbia, and Virginia using false mortgage and settlement documents. Judge Motz also ordered that Reed pay $4,196,967 in restitution.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Postal Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service – Washington Division; Montgomery County State’s Attorney John McCarthy and his Economic Crimes Unit; and Special Agent in Charge Jeffrey Irvine of the United States Secret Service – Washington Field Office.

According to Reed’s plea agreement, Reed and others paid over 15 straw purchasers $10,000 per property to purchase houses for Reed and others. Reed created false mortgage and settlement documents, many of which misrepresented the straw purchasers’ income and assets. Reed and others also created false invoices to claim that their company, Brotherly Investment Group, performed “renovations” on some of the properties. Using these false invoices, Reed and others were “repaid” at closing for the purported renovations. Reed was an organizer and leader in this scheme.

From 2006 to 2008, Reed and others received approximately $3,830,418 in fraudulent funds as part of this scheme. Many of the purchased properties have been foreclosed upon.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is 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.

United States Attorney Rod J. Rosenstein thanked Assistant United States Attorney Kwame J. Manley, who prosecuted the case.

PITTSBURGH—One resident of Coraopolis, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of bank fraud, money laundering and monetary transaction in criminally derived property, United States Attorney David J. Hickton announced today.

The 21‑count indictment named Elexa Manos‑Becton, 42, as a defendant.

According to the indictment, Manos‑Becton executed a scheme to defraud Dwelling House Savings and Loan (DHSL) of its assets using fraudulent ACH transactions. Manos‑Becton opened a PayPal account and associated her DHSL bank accounts to the PayPal account. Using PayPal to initiate ACH transactions, she caused disbursements to be made from DHSL in amounts that far exceeded any balance she had in her accounts at DHSL. Those insufficient funds transactions were not rejected and reversed by DHSL personnel. The loss attributed to Manos‑Becton is at least $907,652.00. Manos‑Becton also was charged with money laundering transactions that used proceeds derived from the bank fraud for purchases.

Assistant United States Attorney Paul E. Hull, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of 500 years in prison, a fine of $14,750,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

The Federal Bureau of Investigation, the Internal Revenue Service and the City of Pittsburgh Bureau of Police conducted the investigation leading to the indictment in this case.

An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HUGH ZUBER — a lawyer employed by the Office of the Corporation Counsel for the City of New York — for fraud, including mortgage fraud, in connection with the purchase and sale of two buildings, and for forging the signature of a bankruptcy judge on a false bankruptcy court order concerning one of the purchases.

According to the criminal Complaint unsealed today in Manhattan federal court:

In April 2006, a property owner in the Bronx retained ZUBER to represent him in the sale of a building. ZUBER arranged the sale of the property to Alana Property Management LLC for $950,000 — but did not disclose to his client that he had created Alana Property, and that his sister managed the company. At ZUBER’s urging, his client agreed to sell the property to Alana Property for $400,000 in cash and a $550,000 ten-year note, purportedly secured by a mortgage, that ZUBER’s client issued directly to Alana. Alana Property then financed the February 2007 purchase of the property in part via a $705,000 mortgage which it obtained based on a loan application that omitted material facts regarding the transaction. Alana Property diverted a portion of those loan proceeds for its own, unrelated purposes, and provided only approximately $400,000 to ZUBER’s client. After the closing, ZUBER made payments for some months on both the mortgage and the note. When ZUBER and Alana Property failed to make payments additional on the note, ZUBER, among other things, presented to the client documents relating to a lawsuit he had purportedly filed against Alana Property in New York State court, and a May 2008 “Order Confirming Plan” that had purportedly been issued in bankruptcy proceedings involving Alana Property. There were in fact no such proceedings in New York State or federal bankruptcy court.

In 2006, ZUBER represented a Spring Valley, New York, property owner in the sale of a house to an individual for $625,000. ZUBER did not disclose to his client that he had a business relationship with the purchaser. At ZUBER’s urging, his client agreed to sell the property to the purchaser for $425,000 in cash and a $200,000 ten-year note, purportedly secured by a mortgage, that ZUBER’s client issued directly to the purchaser. The purchaser then funded the transaction in part via a $500,000 mortgage obtained via a loan application that omitted material facts regarding the transaction. Following the July 2007 closing ZUBER made payments for some months on both the mortgage and on the note. When payments on the note ceased and the seller advised the purchaser that he was in default, the purchaser denied that he had issued a mortgage to the seller. ZUBER then told his client that he had “messed up” and that he would try to make it up to the client, but failed to do so.

ZUBER, 38, of Monsey, New York, was charged with one count of conspiring to commit wire and mail fraud, and one count of forging a judicial signature. The conspiracy charge carries a maximum sentence of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. The forged judicial signature charge carries a maximum sentence of 5 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. ZUBER is expected to be presented later today before United States Magistrate Judge THEODORE H. KATZ, in Manhattan federal court.

Mr. DASSIN praised the FBI for its outstanding work in the investigation. He also thanked the Bronx District Attorney’s Office for referring the investigation to the United States Attorney’s Office, and thanked the Rockland County District Attorney’s Office and the New York City Department of Investigation for their assistance.

Assistant United States Attorney MARK D. LANPHER is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

NEWARK, NJ—A former partner of the New Jersey-based insurance brokerage firm Smith Gatta Gelok was sentenced today to 48 months in federal prison for his role in a $20 million fraudulent loan scheme, U.S. Attorney Paul J. Fishman announced.
Gavin Gatta, 48, of Wayside, N.J., previously pleaded guilty before U.S. District Court Judge Dennis M. Cavanaugh to a criminal Information charging him with wire fraud. Judge Cavanaugh also imposed today’s sentence in Newark federal court.
According to documents filed in this case and statements made in court:
Gavin Gatta is a former partner at Smith Gatta Gelok (“SGG”), an insurance brokerage firm based in Monmouth County, N.J., which assisted businesses in purchasing commercial insurance. When businesses could not pay the entire insurance premium up front, SGG also would assist them in obtaining financing for the premium from one of several premium finance companies (“PFCs”). Gatta admitted that in 2003, he began preparing fake applications for premium financing on behalf of customers who did not need or request such financing and, in fact, previously had paid the full premium to the insurance carrier. Gatta would submit these fake applications to one of several PFCs and ask that the loan funds be sent back to SGG on behalf of the customer.
Gatta used these fake applications for financing to steal more than $20 million in illicit proceeds, which he used to fund extravagant personal expenses such as jewelry and luxury automobiles—including a Mercedes, a Porsche, an Aston Martin and several Ferraris.
In addition to the prison term, Judge Cavanaugh sentenced Gatta to three years of supervised release and ordered him to pay restitution, in an amount to be determined later. Judge Cavanaugh stated that restitution will be at least $22 million.
U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the investigation that resulted in today’s guilty plea.
The government is represented by Assistant U.S. Attorney Christopher J. Kelly of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
11-034 ###
Defense counsel: Edward Dauber, Esq., Newark, N.J.

Westport Man Indicted for Alleged Role in Fairfield County Mortgage Fraud Scheme

The United States Attorney for the District of Connecticut today announced that a federal grand jury sitting in Bridgeport has returned a nine-count indictment charging WILLIAM A. TRUDEAU, JR., 47, of Westport, with bank fraud, wire fraud, and mail fraud offenses stemming from his alleged participation in a Fairfield County mortgage fraud scheme. The indictment was returned yesterday, November 18.

The indictment alleges that TRUDEAU, a property developer, was an unnamed principal in both Aspetuck Building & Development and Huntington South Associates, LLC, the latter of which was a shell company that TRUDEAU used to pay for personal expenses and to secure loans fraudulently. From approximately February 2004 to April 2010, it is alleged that TRUDEAU conspired with Joseph Kriz, Heather Bliss, Fred Stevens, Thomas Preston, and others to defraud federally insured financial institutions and mortgage lenders. Through this scheme, it is alleged that TRUDEAU and his co-conspirators submitted false mortgage loan applications to financial institutions to obtain mortgages on various properties in Fairfield County in order to develop and sell the properties for profit, and to pay off debts owed to “hard money” lenders from whom they had previously obtained high interest loans. The mortgage applications, which included false income information and omitted the mortgage applicants’ true indebtedness, caused the financial institutions to issue mortgage loans on properties that TRUDEAU and his co-conspirators would not have otherwise been qualified to purchase, allowing the applicants to qualify for mortgages that far exceeded their ability to repay the loans.

The indictment further alleges that TRUDEAU’s name did not appear on any documentation related to the loans or the properties for which the loans were obtained, and that money was hidden in bank accounts that were not in TRUDEAU’s name, in part to prevent the collection of more than $450,000 in restitution that a court ordered TRUDEAU to pay in July 2003.

Through this scheme, it is alleged that TRUDEAU and his co-conspirators fraudulently obtained more than $3.5 million in mortgage loans.

The indictment charges TRUDEAU with one count of conspiracy commit bank fraud, mail fraud, and wire fraud; two counts of bank fraud; three counts of mail fraud; and three counts of wire fraud. If convicted, TRUDEAU faces a maximum term of imprisonment of 240 years.

An indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

Kriz, Bliss, Stevens, and Preston have pled guilty to charges related to their involvement in this scheme. Each awaits sentencing.

This matter is being investigated by the Federal Bureau of Investigation. Citizens with information about this case are encouraged to contact FBI Special Agents McNamara or Bowery at 203-333-3512.

The case is being prosecuted by Assistant United States Attorney Rahul Kale.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including “foreclosure rescue” schemes, and “short sale” schemes.

Citizens can report mortgage fraud activity by contacting the Connecticut Mortgage Fraud Task Force at 203-333-3512, or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation Division; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.

LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, announced that ALEKSANDER LIPKIN, a/k/a “Alex,” GARRI ZHIGUN, GALINA ZHIGUN, JOSEPH PAPERNY, FAINA PETROVSKAYA, JOHN GELIN, TOMER SINAI, and DANIEL MIKHLIN were each sentenced by United States District Judge RICHARD J. HOLWELL in Manhattan federal court for their roles in a multimillion-dollar, sub-prime mortgage fraud scheme, as charged in United States v. Aleksander Lipkin, et al., S2 06 Cr. 1179. LIPKIN was sentenced to 110 months in prison for his role as a leader of the mortgage fraud scheme as well as his involvement in another foreclosure rescue scheme charged in United States v. Maurice McDowall, et al..

According to the Indictment, other documents filed in the case, and statements made during the various guilty plea and sentencing proceedings:

From 2004 through January 2007, LIPKIN was a leader in a wide-ranging mortgage fraud scheme involving mortgage brokers and loan processors who worked at the Brooklyn mortgage brokerage firm, AGA Capital NY, Inc., and its successors, as well as real estate appraisers, loan account executives, a paralegal, a lawyer, straw buyers, and others. LIPKIN and his co-defendants submitted loan applications containing false information and material omissions, as well as other false documentation such as bank statements, to obtain loans that otherwise would not have been funded. For example, acting through straw purchasers, LIPKIN and his partner, GARRI ZHIGUN, purchased a block of ten rent-regulated condominium apartments in a building on Manhattan’s Upper West Side. LIPKIN, GARRI ZHIGUN and their associates obtained mortgages for the straw purchasers to finance 100 percent of the purchase price of the Apartments. However, none of the documents submitted to the lenders disclosed that certain buyers were seeking to purchase more than one apartment as a “primary residence,” or that the apartment was already occupied and therefore unsuitable for a primary residence, or that the apartment was subject to rent regulation laws.

Then, only months after initial purchase of the block of apartments, LIPKIN, GARRI ZHIGUN and their co-defendants resold, or “flipped,” the apartments to other straw-buyers, at prices almost twice the amount of the initial purchase price. They did so by submitting false information and documents to various lenders, and thus obtained almost $13 million in additional loans. Most of those additional loans are now in foreclosure.

During the course of the mortgage fraud scheme, AGA Capital, and its successors, brokered over one thousand home mortgages and home equity loans with a total face value of at least $200 million dollars and earned at least $4 million in commission fees on the loans. The various lenders defrauded by the scheme have claimed actual losses of approximately $11.6 million on loans that have completed foreclosure.

Of the 27 defendants charged in United States v. Aleksander Lipkin, et al., 25 pleaded guilty; one of the defendants — ALEXANDER KAPLAN — was found guilty following a jury trial and is scheduled to be sentenced on September 10, 2009.

In addition to the 110-month prison term, LIPKIN, 30, was sentenced to five years’ supervised release. Judge HOLWELL also sentenced LIPKIN to a concurrent term of 110 months’ in prison for his role in a separate mortgage foreclosure rescue scheme to which LIPKIN pleaded guilty in United States v. Maurice McDowall, et al., 07 Cr. 1054. LIPKIN was also ordered to forfeit $7 million and pay approximately $11.6 million in restitution.

GARRI ZHIGUN and JOSEPH PAPERNY were sentenced by Judge HOLWELL on May 28, 2009. GARRI ZHIGUN, 32, supervised the operations of AGA Capital and was LIPKIN’s business partner, as described above. GARRI ZHIGUN was sentenced to 100 months in prison, three years’ supervised release, and was ordered to forfeit $2.5 million and pay approximately $11.6 million in restitution. JOSEPH PAPERNY, 36, was a mortgage broker and was sentenced to 30 months in prison, three years’ supervised release, and was also ordered to forfeit $1 million and pay approximately $11.6 million in restitution.

GALINA ZHIGUN and FAINA PETROVSKAYA were sentenced by Judge HOLWELL on May 21, 2009. GALINA ZHIGUN, 55, was the record owner and registered broker of AGA Capital and was sentenced to 38 months in prison and three years’ supervised release. In addition, GALINA ZHIGUN was ordered to pay a fine of $7,500, forfeit $1 million, and pay $1 million in restitution. PETROVSKAYA, 36, was a loan processor and was sentenced to time served, 30 months’ supervised release with six months of home confinement, and was also ordered to pay a fine of $2,000.

JOHN GELIN, TOMER SINAI, and DANIEL MIKHLIN were sentenced by JUDGE HOLWELL on May 20, 2009. JOHN GELIN, 41, was one of the investors who recruited and used straw buyers to purchase real estate and created fake bank statements and other fraudulent documents to submit to lenders. GELIN was sentenced to 36 months in prison, three years’ supervised release and was ordered to forfeit $1 million and pay approximately $11.6 million in restitution. SINAI, 31, was a licensed real estate appraiser who inflated appraisals for the defendants. SINAI was sentenced to 9 months in prison, three years’ supervised release, and was ordered to forfeit $70,000. MIKHLIN, 32, was a mortgage broker and was sentenced to 27 months in prison, three years’ supervised release, and was ordered to forfeit $240,000 and pay approximately $11.6 million in restitution.

Mr. DASSIN praised the efforts of the Federal Bureau of Investigation, the New York City Police Department, and the United States Immigration and Customs Enforcement. He also thanked the New York State Attorney General’s Office for its outstanding work in the investigation.

Assistant United States Attorneys JONATHAN B. NEW and AVI WEITZMAN are in charge of the prosecutions in United States v. Alexander Lipkin et al. Assistant United States Attorneys JULIAN J. MOORE and JOHN T. ZACH are in charge of the prosecutions in United States v. Maurice McDowall, et al.

WASHINGTON—A federal grand jury has indicted four defendants, and an information has been filed against a fifth defendant, for their participation in a massive mortgage fraud scheme that allegedly promised to pay off homeowners’ mortgages on their “Dream Homes,” but left them to fend for themselves, Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the District of Maryland Rod J. Rosenstein announced today.

The indictment was returned on April 22, 2009, and unsealed today.

“The Criminal Division and the U.S. Attorneys’ Offices are jointly committed to redoubling our efforts to uncover and prosecute fraud and abuse in all facets of the housing market – a market upon which so many American families have pinned their hopes and their futures for so many years,” said Assistant Attorney General of the Criminal Division Lanny A. Breuer. “I want to assure the American public that we will not rest until the tide of this criminal activity is turned.”

“The indictment alleges that the defendants used slick marketing to conceal empty promises,” said U.S. Attorney Rod J. Rosenstein. “They convinced many victims to invest at least $50,000 by refinancing their existing homes or buying new homes at inflated prices, while claiming that Metro Dream Homes would repay the mortgages with revenue from profitable businesses. The indictment alleges that there was no revenue to pay the mortgage payments. Instead, the conspirators used some of the investors’ money to repay earlier investors in the Ponzi scheme and spent the remainder on themselves.”

“The effects of this wide-ranging mortgage fraud scheme are particularly disturbing within the backdrop of today’s economic environment. With our federal, state and local partners working on 18 mortgage fraud task forces and 47 mortgage fraud working groups across the country, the FBI is committed to combating mortgage fraud and other financial crimes nationwide to protect the American homeowner and the national economy,” said Executive Assistant Director Thomas J. Harrington, FBI Criminal, Cyber, Response, and Services Branch.

“IRS Criminal Investigation takes allegations of mortgage fraud seriously,” said “Eileen Mayer, Chief, IRS Criminal Investigation. “These types of crimes drive home owners into foreclosure, erode the integrity of our tax system and threaten the financial health of our communities.”

According to the indictment, from 2005 to 2007 the defendants allegedly used corporate names such as “Metropolitan Grapevine LLC,” “Metro Dream Homes,” “POS Dream Homes,” and “POS DH LLC” (collectively, MDH) to target homeowners and home purchasers to participate in a purported mortgage payment program called the “Dream Homes Program.” To participate, an investor had to provide a minimum of $50,000 for each home enrolled in the program, in addition to an “administrative fee” of up to $5,000. In exchange, the program promised to make the homeowner’s future monthly mortgage payments, and pay off the homeowner’s mortgage within five to seven years. Thereafter, the homeowner and MDH would own an equal interest in the home.

The indictment alleges that Andrew Hamilton Williams, Jr., 58, of Hollywood, Fla., was the founder and owner of MDH; Michael Anthony Hickson, 46, of Commack, N.Y., was the chief financial officer; Isaac Jerome Smith, 46, of Spotsylvania, Va., was the president; and Alvita Karen Gunn, 31, of Hanover, Md., was the vice president of operations. The information alleges that Carole Nelson, age 50, of Washington, D.C., was the chief financial officer of POS Dream Homes.

The indictment further alleges that Dream Homes Program representatives explained to investors that the homeowners’ initial payments would be used to fund investments in automated teller machines (ATMs), flat-screen televisions that would show paid business advertisements, and “Touch-N-Buy” electronic kiosks that sold telephone calling cards and other items. To give the Dream Homes Program a veneer of legitimacy and financial success, the defendants marketed the program through live presentations at luxury hotels in Maryland, Washington, D.C., and Beverly Hills, Calif., among other locations. The defendants allegedly told some of the investors that they should not worry about the price of the homes or monthly mortgage payments because MDH would make mortgage payments on their behalf.

The indictment alleges that the defendants failed to advise investors that: the ATMs, flat-screen televisions and kiosks never generated any meaningful revenue; the defendants used the funds from later investors to pay the mortgages of earlier investors; and MDH had not filed any federal income tax returns throughout its existence. The defendants also allegedly failed to advise investors that their investments were being used for the personal enrichment of select MDH employees, including the defendants, to: pay salaries of up to $200,000 a year as well as their mortgages; employ a staff of 10 chauffeurs and maintain a fleet of luxury cars; and travel to and attend the 2007 National Basketball Association All-Star game and the 2007 National Football League Super Bowl, staying in luxury accommodations in both instances. Nor were investors told that investor funds were allegedly used to: pay off investors in a prior failed ATM investment venture that Williams had founded called Bankcard Group; make multiple donations of up to $50,000 each to charitable organizations to allegedly give MDH the appearance of being financially successful; and fund investments in third-party businesses that had not been disclosed to investors.

On Aug. 15, 2007, the Maryland Securities Commissioner issued a cease-and-desist order to Williams, MDH and other related companies directing them to immediately cease the offering and sale of unregistered securities in connection with their promotion of the Dream Homes Program. However, the defendants thereafter allegedly called additional meetings in which they made additional misrepresentations about the financial success of MDH’s operations. On Sept. 4, 2007, the defendants filed a legal challenge in federal court in Maryland to the cease-and-desist order. The indictment alleges that at a hearing on Sept. 12, 2007, Hickson testified that the financial success of the Dream Homes Program did not rely upon new investor funds, when in fact Hickson knew that the sole source of meaningful revenue for MDH was new investor funds.

As a result of the scheme, more than 1,000 investors in the Dream Homes Program invested approximately $70 million. When the defendants stopped making the mortgage payments, the homeowners were left to attempt to make the mortgage payments MDH had promised to make in full.

The four indicted defendants face a maximum sentence of 20 years in prison for the fraud conspiracy; 20 years in prison on each of the 15 counts of wire fraud; and 20 years in prison for conspiracy to commit money laundering. Hickson also faces a maximum sentence of five years in prison for making false statements. Smith also faces a maximum sentence of 30 years in prison for bank fraud arising out of his alleged misrepresentation of his income in order to obtain a bank loan to purchase a new Bentley automobile. Nelson was charged by information with money laundering, which carries a maximum penalty of ten years in prison. The indictment seeks forfeiture of the fraud proceeds, including $70 million.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceeding.

This prosecution is being brought jointly by the Maryland and Washington, D.C. Mortgage Fraud Task Forces, which are comprised of federal, state and local law enforcement agencies in Maryland, Washington, D.C. and Northern Virginia. The Task Forces were formed to promote the early detection, identification, prevention and prosecution of various kinds of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Forces, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and help to ensure the integrity of the mortgage market and other credit markets. Information about mortgage fraud prosecutions is available on the internet at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

Assistant Attorney General Lanny A. Breuer and U.S. Attorney Rod J. Rosenstein praised the FBI, IRS – CI, the Maryland Attorney General’s Office, Securities Division and the Federal Deposit Insurance Corporation, Office of Inspector General for their investigative work; and thanked Assistant U.S. Attorneys for the District of Maryland Jonathan C. Su and Bryan E. Foreman, who are prosecuting the case.

Three of 10 defendants charged in a mortgage fraud case were sentenced yesterday in Boise by U.S. District Judge Edward J. Lodge, the U.S. Attorney’s Office announced. Michael J. Hymas, 59, formerly of Boise, Idaho, was sentenced to 21 months in prison, three years of supervised release, 80 hours of community service, and $544,647 in restitution for wire fraud. Hymas pled guilty to the charge in March 2010. Shauntee K. Ferguson, 33, of Boise, Idaho, was sentenced to five years of supervised release, 80 hours of community service, and $365,829.69 in restitution for making a false statement to a financial institution. Ferguson pled guilty to the charge in June 2010. Christopher R. Georgeson, 30, formerly of Boise, Idaho, currently of Phoenix, Arizona, was sentenced to one month in prison, three years’ supervised release,11 months of home detention, and $103,356.64 in restitution for wire fraud. Georgeson pled guilty to the charge in March 2010. Four other defendants have pled guilty to a variety of charges and are awaiting sentencing, one defendant has been sentenced, and two other defendants are awaiting trial.

According to an indictment filed in December 2009, Michael Hymas was an insurance agent in Meridian, Idaho, and a silent partner with Stanley Ferguson, Michael Hymas’s son-inlaw, and Shauntee Ferguson, Michael Hymas’s daughter, in the buying and selling of real estate, or “flipping” of real estate, in order to gain profits from the sales. In 2002, Hymas filed a bankruptcy petition and as a result, had difficulty obtaining credit from financial institutions and mortgage lenders. As part of their scheme to defraud and obtain money by false pretenses, Michael Hymas, Shauntee Ferguson and Stanley Ferguson falsely inflated their monthly personal income and falsely claimed rental income, falsely stated that residences would be used as primary residences when in fact they were intended as investment properties only, falsely represented the employment status of Shauntee Ferguson, and falsely provided bank accounts as a source of funding. They submitted the fraudulent documents to loan brokers. As a result, between 2004 and 2006, they caused the financial institutions and mortgage lenders to fund approximately 21 fraudulent loans for an approximate total value of $7.59 million dollars. The financial institutions and mortgage lenders incurred losses of approximately $1.6 million dollars.

According to the Michael Hymas’ plea agreement, on November 19, 2004, Shauntee Ferguson applied for a residential construction loan in the approximate amount of $337,250. The residence was intended for investment purposes only by Michael Hymas, Shauntee Ferguson and Stanley Ferguson. It was not intended for personal occupancy, as misrepresented on the loan application. After the residence was completed and sold, Hymas and the Fergusons shared in the profits from the sale. In order to obtain the loan, Michael Hymas and Shauntee Ferguson provided false information to the mortgage company. Hymas caused a false rental agreement to be prepared, falsely representing he was paying the borrower, Shauntee Ferguson, rental income of $2,500 per month. He also misrepresented that Ferguson was the marketing manager at his insurance company, that she’d been employed there for three years, and that she earned $9,000 per month. Hymas caused an employee at his insurance agency to confirm these misrepresentations when Ferguson’s employment was verified. Hymas also caused Ferguson’s name to be placed on his checking account so that the checking account was represented on her loan application as a personal asset with a value of approximately $31, 000. Based on the misrepresentations, the funding on the residential loan was authorized.

According to the Shauntee Ferguson plea agreement, on November 16, 2005, Shauntee Ferguson applied for a residential construction loan in the approximate amount of $520,000. On her loan application, Ferguson falsely stated that she had a monthly income of $10,000 and was employed as the marketing manager at an insurance agency. In fact, she was not employed and had no monthly income. Ferguson also claimed she had an account balance of approximately $102, 000 when in fact her name was placed on the account to give the appearance that she had access to the funds. Ferguson also falsely represented on the loan application that she planned to occupy the residence as her primary residence when in fact the property was intended solely for investment purposes. Based on the misrepresentations, the funding on the residential loan was authorized.

According to the Christopher Georgeson plea agreement, on November 21, 2006, Georgeson applied for a residential construction loan in the approximate amount of $292,000. On his loan application, Georgeson falsely stated he had a monthly income of $41,666.67 when in fact he had monthly income of approximately $8,000. Georgeson also falsely stated he had gross rental income of $2,300 per month when in fact he had no rental income. Based on these misrepresentations, the funding on the residential loan was authorized. At the loan closing, $93,000 was paid to Crestwood, Inc. The property was subsequently the subject of a foreclosure proceeding due to non-payment of the monthly mortgage by Georgeson.

Stanley J. Ferguson, 33, of Boise, Idaho, pled guilty to Wire Fraud in May 2010. According to the plea agreement, on June 29, 2006, Ferguson applied for a residential construction loan in the approximate amount of $1,499,999, for a residence in Eagle, Idaho. On his loan application, Ferguson falsely stated he had a monthly base employment income of $23,500 when in fact he had no monthly base employment income. Ferguson also falsely stated he had gross rental income of $2,138.50 per month when in fact he had no rental income. He falsely stated that the property would be his primary residence. Based on these misrepresentations, the funding on the residential loan was authorized. At the loan closing, a sum of money was paid to Crestwood, Inc. The property was subsequently the subject of a foreclosure proceeding due to non-payment of the monthly mortgage by Ferguson. Ferguson faces a maximum sentence of twenty years in federal prison, a fine of up to $250,000, and supervised release of up to three years. Sentencing is set for November 29, 2010, before U.S. District Judge Edward J. Lodge in Boise.

Brent Bethers, 37, of Eagle, Idaho, was sentenced on September 20, 2010, to one month in prison, eleven months of home detention, three years of supervised release, $23,913 in restitution, and a fine of $6000 for Wire Fraud. Bethers pled guilty to the charge in March 2010. According to the plea agreement, Bethers was a loan officer in Meridian, Idaho. In June 2006, Stanley Ferguson approached Bethers regarding financing for a residence in Eagle, Idaho. Bethers prepared a loan application on which he falsely represented that Ferguson had monthly income of $25,638 per month when in fact Ferguson’s monthly income was substantially less than this amount. Bethers also represented on the loan application that Ferguson intended to occupy the residence as his “primary residence” when in fact the property was for investment purposes. The mortgage company relied upon these false representations and authorized a loan of approximately $1.5 million to Ferguson.

Travis Hymas, 27, formerly of the Boise area, currently of Cedar Hills, Utah, pled guilty to False Statement to a Bank in March 2010. According to the plea agreement, on March 28, 2007, Hymas applied for a residential construction loan in the amount of $154,800 for a residence in Nampa, Idaho. On his loan application, Hymas falsely stated he had a monthly gross income of $15,000 when in fact he had a monthly gross income of approximately $3,000. He also falsely represented that he had personal property with a value of approximately $100,000. Based on these misrepresentations, the funding on the residential loan was authorized. Hymas faces a maximum sentence of thirty years in federal prison, a fine of up to $1,000,000, and supervised release of up to five years. Sentencing is set for December 15, 2010, before U.S. District Judge Edward J. Lodge in Boise.

Shane Hymas, 32, formerly of the Boise area, currently of American Fork, Utah, and Laurie Krechelle Hymas, 31, formerly of the Boise area, currently of American Fork, Utah, both pled guilty to Bank Fraud in April 2010. According to the plea agreements, on August 23, 2006, Shane and Laurie Hymas applied for refinancing on a loan in the amount of $104,500 for a residence in Star, Idaho. On their loan application, the Hymas’s falsely stated they had a combined monthly gross income in the amount of $33,000 when in fact they had a monthly gross income of between $10,000 and $15,000. They also falsely represented that they had gross monthly rental income of $2,550 when in fact they had no rental income. Based on these misrepresentations, the funding on the residential loan was authorized. They each face a maximum sentence of thirty years in federal prison, a fine of up to $1,000,000, and supervised release of up to five years. Sentencings for both defendants are set for January 18, 2011, before U.S. District Judge Edward J. Lodge in Boise.

“Mortgage fraud and other irregularities in the housing industry contributed significantly to Idaho’s and this nation’s economic struggles,” said Wendy J. Olson, United States Attorney. “These cases demonstrate again that federal and state law enforcement agencies and prosecutors will work together to bring to justice those whose lies undermine the integrity of the housing financing system.”

Paul Redondo, 33, of Meridian, Idaho, and Melody C. Redondo, 32, of Meridian, Idaho, were indicted in October 2010 for multiple counts of Bank Fraud, Wire Fraud, and False Statement to a Financial Institution. According to the indictment, in March through August 2009, Melody Redondo, a licensed real estate agent, failed to disclose multiple offers to a mortgage company on a short-sale residential property, failed to disclose a duo-contract with simultaneous closings on the same real estate transaction, and forged a quitclaim deed and personally notarized the forged deed. The indictment also alleges that the Redondo’s fraudulently overstated their monthly income and falsely represented rental income on multiple loan applications. In May 2009, the Redondo’s filed a joint bankruptcy petition and discharged approximately $1,429,000 in debts. A trial is scheduled for January 10, 2011, before Chief U.S. District Judge B. Lynn Winmill in Boise. An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the Federal Bureau of Investigation and was prosecuted by the United States Attorney’s Office and the State of Idaho, Office of the Attorney General.

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that Steven Carlson, 52, of Jamestown, New York, pled guilty before U.S. District Judge Richard J. Arcara, to evading the payment of taxes and mortgage fraud. The charges carry a maximum sentence of 35 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney Gretchen L. Wylegala, who is handling the case, stated that the defendant has a long history in the restaurant business. Carlson evaded the payment of his federal taxes from 2001 to 2008 by putting businesses and properties in names other than his own, thereby hiding assets that the government could use to satisfy the taxes owed. Included in this scheme are properties in Florida, one of which involved a multi-million-dollar loan. Carlson was a guarantor of the loan and was required to provide proof of income to the bank. The supporting documents included falsified tax returns, false financial statements, and a false Social Security number. The loan has since failed and the loss is at least $600,000.
This law enforcement action is 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.
The plea is the culmination of an investigation on the part of special agents of the Internal Revenue Service Criminal Investigative Division, under the direction of Charles R. Pine, Special Agent in Charge of the New York Field Office, and special agents of the Federal Bureau of Investigation, Buffalo, under the direction of Special Agent in Charge James H. Robertson.
Sentencing is scheduled for May 5, 2011, at 12:30 p.m. EST, in Buffalo, N.Y., in front of Judge Arcara.

Case Investigated by the Maryland and Washington, D.C. Mortgage Fraud Task Forces

GREENBELT, MD—U.S. District Judge Alexander Williams, Jr. sentenced Robert Dewain Venson, age 38, of Fort Washington, Maryland, today to 10 years in prison followed by three years of supervised release for mail and wire fraud, money laundering, and failing to file tax returns in connection with a three-year mortgage fraud scheme involving at least a dozen residential properties. Judge Williams also ordered Venson to pay restitution of $2,060,021.76 and to forfeit $892,368, his proceeds from the scheme.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation – Baltimore Field Office; Assistant Director in Charge James W. McJunkin of the Federal Bureau of Investigation – Washington Field Office; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service – Criminal Investigation, Washington D.C. Field Office; and Acting Postal Inspector in Charge Keith A. Fixel of the U.S. Postal Inspection Service – Washington Division.
“This lengthy sentence sends a powerful message that people who commit mortgage fraud will be held accountable,” said U.S. Attorney Rod J. Rosenstein.
“IRS-Criminal Investigation special agents work diligently to identify and bring to prosecution those who fail to meet their tax obligations,” stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington D.C. Field Office. “We work together with other federal law enforcement agencies to follow the money to financially disrupt criminal activities such as Mr. Venson’s money laundering scheme.”
According to evidence presented at his two-week trial, from 2004 to 2007 Venson negotiated the purchase of at least a dozen residential properties in Maryland and the District of Columbia, including houses in Hyattsville, Ocean City, Fort Washington, and Salisbury, Maryland. Rather than purchase the properties in his own name, the evidence proved that Venson paid straw buyers to appear at the settlements posing as the buyers. Witnesses testified that Venson typically would represent to the straw buyer that he would pay the loan obligation. Venson inflated the price listed on the sales documents to an amount substantially larger than the actual price, causing the mortgage lender to provide funds for the purchase substantially in excess of the actual price. Venson misrepresented and concealed the true purchase price, his arrangement with the straw buyer and other information from the mortgage lender. Under this scheme, the trial evidence showed that Venson reaped $892,368 from the scheme.
Venson also failed to file individual federal income tax returns for 2004, 2005, and 2006 during the period of the scheme.
Venson has been detained since his conviction.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/Mortgage-Fraud/index.html.
This law enforcement action is 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.
United States Attorney Rod J. Rosenstein commended Assistant United States Attorneys Michael R. Pauze and Robert Hur, who prosecuted the case.

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.

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that MARINA DUBIN, a real estate paralegal, was sentenced yesterday to two concurrent three-year prison sentences in connection with her involvement in a multimillion-dollar, sub-prime mortgage fraud scheme and another foreclosure rescue scheme. DUBIN, 33, of Brooklyn, New York, pleaded guilty to two counts of conspiracy to commit mail, wire, and bank fraud on June 12, 2008, before United States District Judge RICHARD J. HOLWELL, who also imposed the sentence yesterday in Manhattan federal court.

According to the Indictment, other documents filed in these and related cases, and statements made in court:

The Mortgage Fraud Scheme

From 2004 through January 2007, DUBIN was a paralegal who acted as the bank attorney and settlement agent for numerous loans obtained by the participants in a wide-ranging mortgage fraud scheme. The scheme was led by ALEKSANDER LIPKIN, 31, of Brooklyn, New York, and other participants included mortgage brokers and loan processors who worked at the Brooklyn mortgage brokerage firm AGA Capital NY, Inc. (“AGA Capital”) and its successors, as well as real estate appraisers, loan account executives, a lawyer, straw buyers, and others. DUBIN and her co-defendants submitted loan applications containing false information and material omissions, as well as other false documentation such as bank statements, to obtain loans that otherwise would not have been funded.

During the course of the mortgage fraud scheme, AGA Capital and its successors brokered over 1,000 home mortgages and home equity loans with a total face value of at least $200 million dollars and earned at least $4 million in commission fees on those loans. The various lenders defrauded by the scheme have claimed actual losses of approximately $11.6 million on loans that have completed foreclosure.

Of the 27 defendants charged in this case (United States v. Aleksander Lipkin, et al.), 25 pleaded guilty; one of the defendants, attorney ALEXANDER KAPLAN, 35, of Brooklyn, New York, was found guilty following a jury trial and is scheduled to be sentenced on April 6, 2010.

GARRI ZHIGUN, 33, of Brooklyn, New York, who supervised the operations of AGA Capital and was LIPKIN’s business partner, was sentenced on May 28, 2009, by Judge HOLWELL to 100 months in prison, three years of supervised release, and was ordered to forfeit $2.5 million and pay approximately $11.6 million in restitution.

The Foreclosure Rescue Scheme

From November 2003 through April 2005, MAURICE McDOWALL, 55, of Brooklyn, New York, LIPKIN and DUBIN engaged in a fraud scheme targeting homeowners whose homes, primarily in Brooklyn and Bronx, New York, were in foreclosure or facing foreclosure, by offering them a plan to “save” their homes. The proposed plan included the refinancing of the homeowners’ debt with new, larger mortgages. Because the distressed homeowners typically had poor credit and were not eligible to refinance their debt at favorable terms, the defendants induced them to “sell” their homes to straw buyers, who would apply for loans to be used to “save” the home. The defendants promised that once the straw buyer obtained the mortgage, the proceeds would be used to pay off the homeowners’ old debt and make one year’s worth of payments on the new loans. The homeowners were told that, during that year, they could continue to live in their homes and work on improving their finances and credit. Finally, the defendants explained to the homeowners that, at the end of the year, the title to their homes would be returned to them by the straw buyers, with their credit repaired and their homes saved. There were also cases in which the defendants did not explain to homeowners that the plan to “save” their home required them to deed their house to a third party and did not obtain permission to deed the homes to others. In such cases, the defendants effectively stole the property of the homeowners by forging the homeowners’ signatures on various documents that transferred the homes to straw buyers without the homeowners’ knowledge.

McDOWALL, who directed the daily operations of the scheme, and LIPKIN, a mortgage broker who coordinated the submission of fraudulent information to lenders on behalf of straw buyers, obtained more than 80 home mortgages and/or equity loans valued at over $20 million. In some instances, the defendants failed to make even one payment on the loans, causing the loans to default immediately; in nearly every other case, they eventually failed to make the payments and defaulted on the loans, thereby “cashing out” on the properties. As a result, the distressed homeowners lost the titles to their homes and faced eviction, the straw buyers owed the lenders hundreds of thousands of dollars that they were unable to repay, and the lenders suffered losses from the defaulted loans.

DUBIN served as the settlement agent for the vast majority of the fraudulent loans obtained in the course of the scheme. In that capacity, she organized closings, prepared documents, and disbursed the fraudulently obtained proceeds to various defendants.

McDOWALL was previously sentenced by United States District Judge ROBERT P. PATTERSON to 120 months in prison and three years of supervised release, with 100 hours of community service to be performed in the first year after release. In addition, Judge PATTERSON ordered McDOWALL to forfeit $2.5 million.

Of the three other defendants charged in this case, one pleaded guilty and the other two were found guilty on charges of conspiracy, wire fraud, and bank fraud, following a 12-day jury trial in Manhattan federal court.

LIPKIN was sentenced by Judge HOLWELL for his role in both the mortgage fraud scheme and the foreclosure rescue scheme (United States v. Maurice McDowall, et al.) on June 4, 2009, to 110 months in prison, five years of supervised release, and was ordered to forfeit $7 million and pay approximately $11.6 million in restitution.

In addition to the 36-month prison term, DUBIN was sentenced to three years of supervised release. Judge HOLWELL also ordered DUBIN to forfeit $7 million and pay approximately $11.6 million in restitution.

Mr. BHARARA praised the work of the Federal Bureau of Investigation, the New York City Police Department, and the Department of Homeland Security’s U.S. Immigration and Customs Enforcement. He also thanked the New York State Attorney General’s Office for its role in the investigation.

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 prosecuted by the Office’s Organized Crime Unit. Assistant United States Attorneys JONATHAN B. NEW, AVI WEITZMAN, JULIAN J. MOORE, and JOHN T. ZACH are in charge of the prosecutions.

The Federal Bank Fraud Statute, 18 U.S.C. 1344, generally provides that whoever knowingly executes, or attempts to execute, a scheme or artifice to defraud a financial institution or to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises, shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

Dwayne A. McKay, 45, has been employed by the police department for eight years, spokeswoman Anne E. Schwartz said. He is assigned to the Prisoner Processing Section and is currently suspended, she said.

According to the 26-page complaint: Dwayne McKay operates a real estate financing business called Yenom Services, LLC. His wife, Lisa McKay, is a property sale closing agent at Summit Guaranty Title and Closing Services in West Allis.

Here is how their scam worked: When a homebuyer could only obtain partial financing, usually 90%, Dwayne McKay would provide the additional 10%. The 10% payment was a sham, however, according to the complaint. It overstated the sale price by 10%, and that tricked the lender into actually providing the buyer with 100% of the financing, instead of only 90%.

At the closing, Lisa McKay would return the 10% to Dwayne McKay, plus a “funding fee.” Lisa falsified property sale settlement statements to cover up the payments, the complaint said.

Dwayne and Lisa are charged with one count of conspiracy to commit fraud against a financial institution and two counts of being party to the crime of fraud against a financial institution.

Lisa, 45, also is charged with seven counts of fraudulent writings, one count of misconduct in public office and one count of attempted fraud against a financial institution.

Dwayne McKay was in custody Tuesday at the Waukesha County Jail, and Lisa McKay was at the Milwaukee County Jail.

BOSTON, MA—A Sharon man convicted of conspiracy, wire fraud, and money laundering was sentenced today for the role he played in a mortgage fraud ring that involved 21 fraudulent property transactions in the Greater Boston area, which defrauded 10 mortgage lenders of more than $10.6 million in loan proceeds.
United States Attorney Carmen M. Ortiz, Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Robert Bethel, Postal Inspector in Charge of the United States Postal Inspection Service, Boston Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, Boston Field Division; Boston Mayor Thomas M. Menino; and Boston Police Commissioner Edward Davis, announced that ANDRE JUNIOR LAMERIQUE, 28, formerly of Sharon, was sentenced by U.S. District Judge George A. O’Toole, Jr. to a term of 60 months’ imprisonment, to be followed by three years of supervised release.
A total of 11 defendants were indicted in May of 2008. Five defendants were convicted of Conspiracy and Wire Fraud counts by a federal jury following a seven-week trial in June 2010. LAMERIQUE and four other defendants pleaded guilty before the trial, and one defendant is awaiting trial on February 2011. On March 11, 2011, LAMERIQUE pleaded guilty to a charge of conspiracy and 33 counts of wire fraud.
The government’s evidence showed that between May 2005 and June 2006, the defendants participated in a conspiracy to obtain $10.6 million in mortgage loan proceeds by fraud. The scheme involved the use “straw” buyers, inflated purchase prices and documents containing numerous false representations, including false information about the purchase price, borrower income, employment, and intent to reside in the property. The difference between actual purchase prices negotiated with sellers and the inflated purchase prices submitted to lenders ranged as high as $255,000 on properties in South Boston, Dorchester, Jamaica Plain, Quincy, Hyde Park, and Cohasset. These fraudulent “mark-ups” added up to over $1.9 million. From this $1.9 million, the defendants pocketed more than $1.7 million in illegal proceeds. The mortgages on all of the properties were defaulted upon and nearly all went into foreclosure. LAMERIQUE participated in the scheme by recruiting straw buyers for the fraudulent loans, creating and sending bogus loan applications to mortgage lenders, and sharing in the illegal proceeds.
LAMERIQUE is the ninth defendant sentenced to date. On October 18, 2010, Judge O’Toole sentenced DANIEL APPOLON to 42 month in prison and ordered co-defendant SAMUEL JEAN-LOUIS to serve a prison term of 22 months. On October 20, 2010, ERNST APPOLON was sentenced to prison for 120 months and on October 21st JERMAINE BLAKE was ordered to serve a prison term of 30 months. On October 28, 2010, the court sentenced WIDNER LAMARRE to prison for 60 months. LATOYA HALTIWANGER was also sentenced on October 28, 2010 and received a prison sentence of 30 months. On November 1, 2010, JEAN NORISCAT was sentenced to a prison term of 87 months. On November 10, 2011, attorney J. DANIEL LINDLEY was sentenced to serve 72 months in prison. ERIC LEVINE, a suspended attorney, is scheduled for sentencing on January 20, 2011. Defendant RALPH APPOLON is scheduled for trial on February 7, 2011.
The case is being prosecuted by Assistant U. S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz’s Economic Crimes Unit and Mary B. Murrane, Chief of Ortiz’s Asset Forfeiture Unit.