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June 1, 2011

Former Loan Officer Pleads Guilty to 13 Felony Offenses in Two Federal Cases

PHOENIX—Phoenix resident Paige Kinney, aka Jaime Lee Lawler, 42, pleaded guilty in two separate cases in federal district court on Friday. In one case, Kinney admitted to her leadership role in a $40 million mortgage fraud involving Countrywide Home Loans, and in the second case, she admitted to committing bankruptcy fraud, bank fraud, and mail fraud.

“This defendant’s fraudulent activities were pervasive—she targeted financial institutions, she undermined the integrity of the bankruptcy court, and she stole from an insurance company,” said U.S. Attorney Dennis K. Burke. “For those in the real estate and mortgage industry: If you engage in fraud to line your pockets at the expense of others, we will come after you with everything we have. I congratulate the IRS and FBI on a thorough investigation.”

“Today’s guilty plea signifies the continued commitment by the FBI, the Arizona Mortgage Fraud Task Force, and the United States Attorney’s Office in targeting mortgage and bankruptcy fraud,” said John Strong, Federal Bureau of Investigation Acting Special Agent in Charge, Phoenix Division. “The FBI and its law enforcement partners will continue to aggressively pursue those who are involved in these types of fraudulent schemes. Mortgage fraud has greatly impacted the citizens of Arizona over the past few years and will continue to remain a top criminal priority of the FBI.”

Kinney admitted that from January of 2005 through December of 2007, she and others recruited straw buyers to purchase homes the buyers never intended to live in by obtaining mortgage loans the buyers never should have received. Kinney arranged for the loan applications to be submitted with false information about the employment, income, and assets of the buyers so they would qualify for the loans. The loans, totaling almost $40 million, were obtained based on inflated property appraisals. The excess cash totaling $9 million was then diverted to Kinney and her co-conspirators.

Kinney further admitted that she continued her illicit activities while she was pending trial on the mortgage fraud charges. She declared bankruptcy and then attempted to hide assets and liabilities by changing her name. She committed additional financial fraud by arranging for friends to fraudulently obtain a loan to purchase a Mercedes. And she committed insurance fraud by staging a phony burglary of her residence and then collecting $130,000 from Allstate Insurance Company.

Kinney pleaded guilty to a total of 13 felony offenses, many of which each carry a maximum prison sentence of 30 years and a maximum fine of $1 million. In determining an actual sentence, the federal district court judge will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

Sentencing is set before Judge Neil V. Wake on September 12, 2011. The investigation in this case was conducted by the IRS and FBI. The prosecution is being handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

May 30, 2011

Three Indicted in Multiple Mortgage Fraud Schemes Involving 13 Properties

PROVIDENCE, RI—A federal grand jury in Providence on Tuesday returned indictments against a loan officer and a loan processor employed at the same mortgage company, and a former Rhode Island attorney currently involved in the real estate industry in an alleged “straw borrowing” scheme that netted more than $3.5 million dollars in fraudulently obtained mortgages on 13 properties in five Rhode Island communities, it was announced by United States Attorney Peter F. Neronha.

The grand jury returned a 13-count indictment charging Juan Carlos Hernandez, 41, of West Warwick, R.I., a loan officer with National City Mortgage Company; Miguel Valerio, 51, of Providence, R.I., a loan processor with National City Mortgage Company; and James D. Levitt, 65, of Pawtucket, R.I., a former attorney who controlled two companies formed for the purpose of engaging in real estate transactions. The properties are located in Cranston, Central Falls, Coventry, Pawtucket, and Providence.

In addition, Levitt is named in a separate eight-count indictment alleging three counts of bank fraud, three counts of wire fraud, and two counts of tax fraud in connection with mortgage transactions in Providence separate from the conspiracies outlined in the indictment naming Levitt, Juan Carlos Hernandez, and Miguel Valerio.

The indictments allege that Juan Carlos Hernandez and Miguel Valerio conspired to recruit and pay “straw purchasers” to purchase properties they would not normally qualify to purchase, with the intent of taking control of the properties to collect rent on and to sell within a short period of time, and divide the profits among them. The “straw-borrowers” were paid various fees and were regularly advised by the defendants that they would not be responsible for the mortgages for which they were applying.

In addition, the indictment alleges that Hernandez, Valerio, and Levitt conspired to obtain “straw purchasers” to apply for and obtain mortgages on four properties in which the three had a financial interest.

A separate indictment alleges that James Levitt schemed to commit mail and wire fraud by obtaining mortgages on three properties which he expected to control, two of which were obtained in the name of an associate based on false and fraudulent information.

The cases are being prosecuted by Assistant U.S. Attorney Luis M. Matos.

The matters were investigated by the Federal Bureau of Investigation, U.S. Department of Housing and Urban Development Office of Inspector General, and Internal Revenue Service, Criminal Investigations.

An indictment is merely an allegation 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.

May 29, 2011

Idaho Couple Sentenced for Mortgage Fraud

Former Treasure Valley residents Shane M. Hymas and Laurie Kreschelle Hymas, both age 32, now of American Fork, Utah, were sentenced today in district court in Boise for bank fraud, announced U.S. Attorney Wendy J. Olson.

U.S. District Judge Edward J. Lodge sentenced Shane Hymas to five months in prison followed by three years of supervised release. Laurie Hymas was sentenced to one month in prison and will also serve three years of supervision. While on supervised release they will each be required to serve five months of home detention and perform 100 hours of community service. Restitution will be determined at a later date.

The two pleaded guilty to bank fraud on April 1, 2010. According to court documents, they admitted to submitting a false and fraudulent residential loan application to obtain a mortgage from a lender.

The case is related to the ongoing Crestwood mortgage fraud, which involved multiple defendants who bought and sold real estate in order to “flip” it, or gain profits from the sales.

To date, six people have been sentenced in related cases, including Michael J. Hymas, Shauntee K. Ferguson, Christopher R. Georgeson, Stanley J. Ferguson, Brent Bethers, and Paul Redondo. Paul Redondo’s wife Melody pleaded guilty in February to making a false statement to a financial institution. She is scheduled to be sentenced in federal court in Boise on June 13.

The case was investigated by the Federal Bureau of Investigation with assistance from the Idaho Attorney General’s Office and the Idaho Department of Finance.

May 28, 2011

Mortgage Fraud Defendant Sentenced to Prison

TAMPA, FL—U.S. Attorney Robert E. O’Neill announces that U.S. District Judge Susan C. Bucklew today sentenced Sang Min Kim, a/k/a Sonny Kim (37, Tampa) to 41 months in federal prison for conspiracy to commit wire, mail, and bank fraud and money laundering in connection with a mortgage fraud scheme. As part of his sentence, the court entered a money judgment in the amount of $5,826,778.65, the proceeds of the charged criminal conduct.

Kim pleaded guilty on June 29, 2010. According to court documents, from about January 2005 through October 2008, Kim engaged in numerous residential real estate transactions in the Middle District of Florida, primarily in Hillsborough County, at least 48 of which involved fraud and resulted in losses of approximately $5,826,778.65.

Kim purchased residential properties as an “investor” with the intention of “flipping” the properties in subsequent sales. Kim’s co-conspirators identified the properties he purchased, usually at market value, by accepting quit claim deeds from the sellers. Frequently, Kim’s co-conspirators also identified the “buyers” to whom he flipped the properties. Kim’s buyers’ mortgage loan applications typically included the false claim that they intended to occupy the properties they were purchasing, when in fact they never intended to purchase Kim’s properties as places to live. Moreover, Kim’s buyers made no genuine financial commitment of funds to their purchase transactions. The buyers’ stated down payments were fictitious because the funds used to make the down payments were either provided by Kim or another, or the buyer used his or her own money and was subsequently reimbursed by Kim who used loan proceeds to do so. The “buyers” were motivated to participate in these transactions by the fact that they were being paid to assume the role of “purchaser.”

As a part of the fraud scheme, Kim used appraisers whom he knew would “come in higher” on appraised values. He also regularly provided a title agent with additional compensation in the form of “side commissions” in exchange for expediting closings. Kim was aware that at least one mortgage broker created false W-2 forms to document a prospective borrower’s stated income. Kim was also aware that his company, SK Investment Group, LLC, was used to provide false employment verifications for other fraudulent transactions from which he did not directly benefit. Kim was also aware that one or more mortgage brokers, through whom he conducted his purchase/sales transactions, made up fictitious income and false assets that were inserted on prospective buyers’ loan applications. Kim was assisted in his fraudulent purchase/sales transactions by persons employed by federally insured financial institutions. Those persons were aware that Kim, as the seller, received a portion of funds derived from equity lines of credit acquired by his buyers.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Rachelle DesVaux Bedke.

Central Coast Man Sentenced Two Years in Federal Prison in Mortgage Fraud Scheme

LOS ANGELES—A Buellton man was sentenced today to 21 months in federal prison for defrauding banks by nearly simultaneously seeking home equity lines of credit from four different federally insured financial institutions.

Larry P. Corbi Jr., 36, who resided in Marina del Rey during the course of the scheme and has since relocated to the Central Coast, was sentenced by United States District Judge Dale S. Fischer. In addition to the prison term, Judge Fischer ordered Corbi to pay $356,644 in restitution.

Corbi pleaded guilty in November to one count of bank fraud, admitting that he fraudulently filed four applications for home equity lines of credit (HELOCs) over a two-week period in 2008. According to a plea agreement filed in this case, Corbi bought a $620,000 home in the Granada Hills district of Los Angeles in November 2007. In March 2008, Corbi applied for four HELOCs in amounts ranging from $122,000 to $191,000 from Washington Mutual Bank, GMAC ResCap, Countrywide Bank F.S.B., and Metlife Bank/PHH Mortgage Corporation. Corbi concealed from each financial institution that he was concurrently applying for other HELOCs that would also be secured by the Granada Hills home. Three of the four HELOCs were approved and funded.

In total, Corbi obtained $672,144 in loan proceeds, which included $200,000 he borrowed to purchase the Granada Hills home. When the home went into foreclosure, the banks that had loaned money to Corbi suffered losses totaling $356,644.

The case against Corbi was investigated by the Federal Bureau of Investigation.

May 25, 2011

Central Coast Man Sentenced to Nearly Two Years in Federal Prison in Mortgage Fraud Scheme

LOS ANGELES—A Buellton man was sentenced today to 21 months in federal prison for defrauding banks by nearly simultaneously seeking home equity lines of credit from four different federally insured financial institutions.

Larry P. Corbi Jr., 36, who resided in Marina del Rey during the course of the scheme and has since relocated to the Central Coast, was sentenced by United States District Judge Dale S. Fischer. In addition to the prison term, Judge Fischer ordered Corbi to pay $356,644 in restitution.

Corbi pleaded guilty in November to one count of bank fraud, admitting that he fraudulently filed four applications for home equity lines of credit (HELOCs) over a two-week period in 2008. According to a plea agreement filed in this case, Corbi bought a $620,000 home in the Granada Hills district of Los Angeles in November 2007. In March 2008, Corbi applied for four HELOCs in amounts ranging from $122,000 to $191,000 from Washington Mutual Bank, GMAC ResCap, Countrywide Bank F.S.B., and Metlife Bank/PHH Mortgage Corporation. Corbi concealed from each financial institution that he was concurrently applying for other HELOCs that would also be secured by the Granada Hills home. Three of the four HELOCs were approved and funded.

In total, Corbi obtained $672,144 in loan proceeds, which included $200,000 he borrowed to purchase the Granada Hills home. When the home went into foreclosure, the banks that had loaned money to Corbi suffered losses totaling $356,644.

The case against Corbi was investigated by the Federal Bureau of Investigation.

May 24, 2011

Former Title and Escrow Agent Pleads Guilty to Mortgage Fraud Case Involves More Than $1.8 Million in Loans

WASHINGTON—Ronald Johannes Sneijder, 48, a former owner of a title and escrow company based in the District of Columbia, pled guilty today to the lead count in a recently filed indictment, bank fraud, announced U.S. Attorney Ronald C. Machen Jr. and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Sneijder, of Herndon, Virginia, entered his guilty plea today before the Honorable Alan Kay in the U.S. District Court for the District of Columbia. He also agreed to forfeiture of $1,256,000. He is to be sentenced later this summer or fall by the Honorable Emmet G. Sullivan. Sneijder faces a probable sentence under the sentencing guidelines of 30 to 37 months of incarceration, restitution in the amount of $1,256,000, a fine, and other conditions.

The indictment against Sneijder was returned by a grand jury on May 13, 2011 and unsealed last week.

According to the statement of offense, signed by the defendant, Sneijder was the manager and majority owner of a title and escrow company known as Red Box Settlements, located in the 1600 block of U Street NW, Washington, D.C. On about January 13, 2004, Sneijder purchased a residence at 1325 Independence Avenue SE. About a month later, he refinanced the loan through Wells Fargo Bank, obtaining a home equity line of credit with a maximum credit limit of up to $575,000.

In February 2005, the defendant sought a $581,000 refinance loan from First Savings Mortgage Corporation, using as collateral his house at 1325 Independence Avenue SE, which was already encumbered with the home equity line of credit from Wells Fargo. First Savings Mortgage Corporation approved the loan on the condition that the Wells Fargo line of credit would be paid off and closed and the lien in the public record be “released” so that no additional money could be borrowed on the Wells Fargo line of credit, and so that there would be no other loans that would take precedence over the First Savings Mortgage Corporation loan.

After settlement, Sneijder paid off the Wells Fargo line of credit but did not close it. Thereafter, from March 2005 to November 2006, he again borrowed money against the Wells Fargo line of credit. He obtained cash advances up to approximately $558,000 by the end of November 2006.

In May 2006, Red Box Settlements handled a real estate closing for a client identified in these proceedings as R.K. As part of the settlement, Red Box received approximately $396,000 as the sales proceeds into its escrow exchange account held in trust for R.K. However, from May 2006 to November 2006, the defendant took approximately $216,000 from the escrow exchange account to pay his personal and business expenses without permission and authority of R.K. Then, in November 2006, R.K. purchased another home and asked for the release of his money from the escrow exchange account; however, Red Box Settlements did not have sufficient funds in its escrow exchange account to honor the full demand and was unable to remit R.K.’s portion, that is, about $313,000, directly to him.

Later in November 2006, Sneijder sought a $675,000 loan from Wachovia Bank using as collateral 1325 Independence Avenue SE, which was already encumbered with the Wells Fargo home equity line of credit and the First Savings Mortgage Corporation loan. Wachovia approved the loan on the condition that the Wells Fargo line of credit would be paid, closed, and the Recorder of Deeds be notified of the closure so that no additional money could be borrowed on the Wells Fargo line of credit. The defendant paid down less than half of the line of credit, and again failed to close the Wells Fargo account. From January to August 2007, Sneijder again continued to borrow money against the Wells Fargo line of credit for a total amount due and owing of approximately $573,000.

Sneijder failed to repay the approximate $573,000 Wells Fargo line of credit, the $581,000 First Savings Mortgage Corporation loan, and the $675,000 Wachovia loan, resulting in foreclosure of 1325 Independence Avenue SE, the proceeds of which were insufficient in value to repay the approximate $1,829,000 loaned to the defendant.

In announcing the plea, U.S. Attorney Machen and Assistant Director in Charge McJunkin commended the work of those who investigated the matter for the FBI’s Washington Field Office, including Special Agents and Forensic Accountants. They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Diane Hayes and Sarah Reis, and Assistant U.S. Attorney Daniel Friedman. Finally they acknowledged the work of Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case along with the office’s Asset Forfeiture and Money Laundering Section.

Posted By: Ralph Roberts @ 9:19 pm | | Comments Off | Trackback |
Filed under: Bank Fraud,Escrow Fraud,Money Laundering,Mortgage Fraud,Mortgage Loan Fraud,Title Agent

May 22, 2011

Six Indicted as Part of a Multi-Million-Dollar Mortgage Fraud Scheme

Defendants Targeted Low-Income Buyers, Falsely Inflated Buyer Assets In Loan Applications

SAN JOSE—A federal grand jury in San Jose indicted Norma Valdovinos, Claudia Valdovinos, Linda Dung Tran, Elaine “Queenie” Ly, and Pablo Curiel, of San Jose, California, and Jesus Chavez, of Gilroy, California on May 11, 2011, with conspiracy to commit bank fraud, bank fraud, and making a false statement to a bank, United States Attorney Melinda Haag announced yesterday. Norma Valdovinos and Linda Tran were also charged with conspiracy to commit money laundering and money laundering. According to the indictment, the defendants ran a multi-million-dollar mortgage fraud scheme, fraudulently inducing banks to extend millions of dollars in loans to unqualified buyers, while the defendants pocketed over one million dollars in real-estate and mortgage commissions for themselves.

According to the 32-count indictment, from 2004 through August 2007, Ms. Norma Valdovinos, age 45, and Chavez, age 52, were real estate agents with Century 21 Golden Hills Real Estate and solicited primarily low-income home buyers to purchase homes, typically single-family residences, usually priced in excess of $500,000. They knew that the borrowers they solicited had insufficient incomes and assets to qualify for the mortgages they needed in order to buy the properties.

The indictment further alleges that Norma Valdovinos and Chavez referred their clients to Palacio Mortgage, owned by Linda Tran, age 33, knowing that Palacio Mortgage would falsely inflate and misrepresent the borrowers’ income, assets, and employment information so as to enable the borrowers to qualify for the loan or loans needed to buy a property. Linda Tran and “Queenie” Ly, age 32, with the assistance of Claudia Valdovinos, age 27, falsified the borrowers’ income, assets, employment, and the source of the borrowers’ down payments in the Uniform Residential Loan Applications (“URLAs”) they submitted to the banks. Tran and Ly also submitted false documents such as fake bank statements and letters from tax preparers falsely stating that the buyer owned his or her own business. The Palacio Mortgage defendants also made many of the same misrepresentations on behalf of borrowers seeking to refinance existing mortgages.

According to the indictment, Linda Tran also arranged for Pablo Curiel, age 71, to secretly provide funds for the down payment required on the borrowers’ loans, without the banks’ knowledge. This scheme resulted in upwards of $40 million in loans being provided to buyers that, but for the defendants’ fraud, would not have been loaned.

This indictment is the fifth indictment brought in this investigation, resulting in a total of 10 defendants that have been charged to date. In late 2010, the United States separately charged Lita Delara, 10-00465 JF, Guadalupe Perez Nieto, 10-00842 JF, John Nguyen, 10-00467 JF, and Zosimo Reyes, 10-00468 JF, for conspiracy to commit bank fraud, in violation of 18 U.S.C. § 849.

Norma Valdovinos, Claudia Valdovinos, and “Queenie” Ly were arrested on May 18, 2011, in San Jose, California, and made their initial appearances in federal court in San Jose that same day. Each was released on bond. Norma Valdovinos’ bond was set at $125,000, Claudia Valdovinos’ bond at $50,000, and Ly’s bond at $75,000. Chavez, Tran, and Curiel are expected to make their initial appearances before The Honorable Howard Lloyd, United States Magistrate Judge, on May 26, 2011, at 1:30 a.m.

The maximum statutory penalty for count one, conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, and counts two through 11, bank fraud, in violation of 18 U.S.C. § 1344, is 30 years’ imprisonment, a $1 million fine, and restitution; for counts 12 through 21, making a false statement to a bank, in violation of 18 U.S.C. § 1014, is 30 years’ imprisonment, a $1 million fine, and restitution; count 22, conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), is 20 years’ imprisonment, a fine of $500,000 fine (or twice the gross gain or gross loss), and restitution; counts 23 through 28, engaging in monetary transactions using criminally derived property, in violation of 18 U.S.C. § 1957, is 10 years’ imprisonment, a $250,000 fine (or twice the amount of the criminally derived property involved in the transaction), and restitution; and counts 29 through 32, money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i) and (B)(i), is 20 years’ imprisonment, $500,000 fine (or twice the gross gain or gross loss), and restitution. The United States is also seeking the forfeiture of defendants’ real property and other assets derived from their fraudulent scheme. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Grant Fondo and David Callaway are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kamille Singh and Jeanne Carstensen. The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Norma Valdovinos, Claudia Valdovinos, Jesus Chavez, Linda Dung Tran, Elaine “Queenie” Ly, and Pablo Curiel must be presumed innocent unless and until proven guilty.

May 19, 2011

Six Indicted as Part of a Multi-Million-Dollar Mortgage Fraud Scheme

Defendants Targeted Low-Income Buyers, Falsely Inflated Buyer Assets In Loan Applications

SAN JOSE—A federal grand jury in San Jose indicted Norma Valdovinos, Claudia Valdovinos, Linda Dung Tran, Elaine “Queenie” Ly, and Pablo Curiel, of San Jose, California, and Jesus Chavez, of Gilroy, California on May 11, 2011, with conspiracy to commit bank fraud, bank fraud, and making a false statement to a bank, United States Attorney Melinda Haag announced yesterday. Norma Valdovinos and Linda Tran were also charged with conspiracy to commit money laundering and money laundering. According to the indictment, the defendants ran a multi-million-dollar mortgage fraud scheme, fraudulently inducing banks to extend millions of dollars in loans to unqualified buyers, while the defendants pocketed over one million dollars in real-estate and mortgage commissions for themselves.

According to the 32-count indictment, from 2004 through August 2007, Ms. Norma Valdovinos, age 45, and Chavez, age 52, were real estate agents with Century 21 Golden Hills Real Estate and solicited primarily low-income home buyers to purchase homes, typically single-family residences, usually priced in excess of $500,000. They knew that the borrowers they solicited had insufficient incomes and assets to qualify for the mortgages they needed in order to buy the properties.

The indictment further alleges that Norma Valdovinos and Chavez referred their clients to Palacio Mortgage, owned by Linda Tran, age 33, knowing that Palacio Mortgage would falsely inflate and misrepresent the borrowers’ income, assets, and employment information so as to enable the borrowers to qualify for the loan or loans needed to buy a property. Linda Tran and “Queenie” Ly, age 32, with the assistance of Claudia Valdovinos, age 27, falsified the borrowers’ income, assets, employment, and the source of the borrowers’ down payments in the Uniform Residential Loan Applications (“URLAs”) they submitted to the banks. Tran and Ly also submitted false documents such as fake bank statements and letters from tax preparers falsely stating that the buyer owned his or her own business. The Palacio Mortgage defendants also made many of the same misrepresentations on behalf of borrowers seeking to refinance existing mortgages.

According to the indictment, Linda Tran also arranged for Pablo Curiel, age 71, to secretly provide funds for the down payment required on the borrowers’ loans, without the banks’ knowledge. This scheme resulted in upwards of $40 million in loans being provided to buyers that, but for the defendants’ fraud, would not have been loaned.

This indictment is the fifth indictment brought in this investigation, resulting in a total of 10 defendants that have been charged to date. In late 2010, the United States separately charged Lita Delara, 10-00465 JF, Guadalupe Perez Nieto, 10-00842 JF, John Nguyen, 10-00467 JF, and Zosimo Reyes, 10-00468 JF, for conspiracy to commit bank fraud, in violation of 18 U.S.C. § 849.

Norma Valdovinos, Claudia Valdovinos, and “Queenie” Ly were arrested on May 18, 2011, in San Jose, California, and made their initial appearances in federal court in San Jose that same day. Each was released on bond. Norma Valdovinos’ bond was set at $125,000, Claudia Valdovinos’ bond at $50,000, and Ly’s bond at $75,000. Chavez, Tran, and Curiel are expected to make their initial appearances before The Honorable Howard Lloyd, United States Magistrate Judge, on May 26, 2011, at 1:30 a.m.

The maximum statutory penalty for count one, conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, and counts two through 11, bank fraud, in violation of 18 U.S.C. § 1344, is 30 years’ imprisonment, a $1 million fine, and restitution; for counts 12 through 21, making a false statement to a bank, in violation of 18 U.S.C. § 1014, is 30 years’ imprisonment, a $1 million fine, and restitution; count 22, conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), is 20 years’ imprisonment, a fine of $500,000 fine (or twice the gross gain or gross loss), and restitution; counts 23 through 28, engaging in monetary transactions using criminally derived property, in violation of 18 U.S.C. § 1957, is 10 years’ imprisonment, a $250,000 fine (or twice the amount of the criminally derived property involved in the transaction), and restitution; and counts 29 through 32, money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i) and (B)(i), is 20 years’ imprisonment, $500,000 fine (or twice the gross gain or gross loss), and restitution. The United States is also seeking the forfeiture of defendants’ real property and other assets derived from their fraudulent scheme. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Grant Fondo and David Callaway are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kamille Singh and Jeanne Carstensen. The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Norma Valdovinos, Claudia Valdovinos, Jesus Chavez, Linda Dung Tran, Elaine “Queenie” Ly, and Pablo Curiel must be presumed innocent unless and until proven guilty.

May 18, 2011

Chico Couple Pleads Guilty to Mortgage Fraud Charges

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today that Garret Griffith Gililland III, 29, and Nicole Magpusao, 31, both formerly of Chico and now in federal custody, pleaded guilty this afternoon before Senior United States District Judge Edward J. Garcia. Gililland pleaded guilty to one count of mail fraud and one count of money laundering. Magpusao pleaded guilty to one count of mail fraud.

According to court documents, Gililland and Magpusao were originally charged in 2008 on mail fraud and other charges relating to a multi-million-dollar “builder bailout” mortgage fraud scheme in Chico. They were successfully extradited back to the United States following their flight to Spain. Sentencing for Gililland is scheduled for October 28, 2011. Sentencing for Magpusao is scheduled for July 22, 2011. Both remain in federal custody pending sentencing.

This case is the product of a joint investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Butte County District Attorney’s Office. Assistant United States Attorney Russell L. Carlberg is prosecuting the case.

In his plea hearing today in district court, Gililland admitted that he and others originated approximately $21 million in fraudulent loans, causing losses to lenders of more than $4 million. Gililland also admitted that he recruited buyers to buy homes at artificially inflated prices. He admitted to falsifying documents to qualify the buyers for the loans. Gililland admitted to scheming with Chico builders Tony Symmes, William Baker, and others, to execute the fraud scheme. He also admitted to coordinating loan application fraud with employees of a mortgage brokerage in Sylmar and with co-defendant Leonard Williams, a licensed real estate agent. The loan application fraud included falsifying employment history, inflating income, and providing false verifications of income and employment to lenders.

“This is a very significant plea in an ongoing investigation of mortgage fraud involving subjects located throughout California and other states,” said U.S. Attorney Wagner. “We are very pleased with the dedication and skillful work of the FBI and IRS-CI case agents as well as the investigators from Butte County. Cases of this magnitude require a team effort, and that is what we have seen here.”

Butte County District Attorney Michael Ramsey said, “We are very pleased to hear that Gililland has finally admitted his guilt in this long, complex, and torturous investigation. It was a model of state-federal cooperation in investigating fraud and bringing this man to justice. The U.S. Attorney, FBI, IRS-CI, and my investigators worked shoulder-to-shoulder on all aspects of this case for several years.” Ramsey added, “Gililland and others in his organization did incalculable damage to the mortgage industry and the housing market. He and others like him contributed to the largest downturn in our country’s economy since the Great Depression.”

Other significant pleas in this investigation include those of Anthony G. Symmes, 60, of Paradise; Shane Burreson, 38, of Orland, the president of Nor Cal Innovative Investments Inc.; Carlos Chamorro, 39, of Southern California, an unlicensed mortgage broker; and Christopher Chiavola, 32, of Chico. Remaining defendants include William Baker, 65 of Chico; Leonard Williams, 49, of Sacramento; Brandon Resendez, 32, of Chico; Kesha Haynie, 39, of Chico, a licensed real estate professional; and Remy Heng, 31, of Elk Grove. Trial of the remaining defendants is scheduled for September 12, 2011. The remaining defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The maximum statutory penalty for mail fraud is 20 years in prison, a $250,000 fine, and three years of supervised release. The maximum statutory penalty for money laundering is 10 years in prison, a $250,000 fine, and three years of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). 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. One component of the FFETF is the national Mortgage Fraud Working Group, co-chaired by U.S. Attorney Wagner. For more information on the task force, visit StopFraud.gov.

Former Title and Escrow Agent Indicted for Mortgage Fraud

Case Involves More Than $1.8 Million in Loans

WASHINGTON—Ronald Johannes Sneijder, 48, a former owner of a title and escrow company based in the District of Columbia, has been indicted on federal charges relating to mortgage fraud. The total amount of loans was approximately $1,829,000.

The indictment, which was unsealed today, was returned May 13, 2011 in the U.S. District Court for the District of Columbia. It was announced by U.S. Attorney Ronald C. Machen Jr. and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Sneijder, of Herndon, Va., was indicted on charges of bank fraud, wire fraud, first degree fraud, and theft. The indictment also includes a forfeiture count seeking all proceeds from the defendant’s crimes. If convicted, under the federal sentencing guidelines, he faces a potential sentence of between 46 and 57 months of incarceration.

According to the indictment, Sneijder was the manager and majority owner of a title and escrow company known as Red Box Settlements, located in the 1600 block of U Street NW, Washington, D.C.

On about January 13, 2004, Sneijder purchased a residence at 1325 Independence Avenue SE. About a month later, he refinanced the loan through Wells Fargo Bank, obtaining a home equity line of credit with a maximum credit limit of up to $575,000.

In February 2005, the defendant sought a $581,000 refinance loan from First Savings Mortgage Corporation, using as collateral his house at 1325 Independence Avenue SE, which was already encumbered with the home equity line of credit from Wells Fargo. First Savings Mortgage Corporation approved the loan on the condition that the Wells Fargo line of credit would be paid off and closed and the lien in the public record be “released” so that no additional money could be borrowed on the Wells Fargo line of credit, and so that there would be no other loans that would take precedence over the First Savings Mortgage Corporation loan.

After settlement, Sneijder paid off the Wells Fargo line of credit but did not close it. Thereafter, from March 2005 to November 2006, he again borrowed money against the Wells Fargo line of credit. He obtained cash advances up to approximately $558,000 by the end of November 2006.

The indictment further alleges that in November 2006, Sneijder sought a $675,000 loan from Wachovia Bank using as collateral 1325 Independence Avenue SE, which was already encumbered with the Wells Fargo home equity line of credit and the First Savings Mortgage Corporation loan. Wachovia approved the loan on the condition that the Wells Fargo line of credit would be paid, closed, and the Recorder of Deeds be notified of the closure so that no additional money could be borrowed on the Wells Fargo line of credit. The defendant paid down less than half of the line of credit, and again failed to close the Wells Fargo account. From January to August 2007, Sneijder again continued to borrow money against the Wells Fargo line of credit for a total amount due and owing of approximately $573,000.

According to the indictment, Sneijder failed to repay the approximate $573,000 Wells Fargo line of credit, the $581,000 First Savings Mortgage Corporation loan, and the $675,000 Wachovia loan, resulting in foreclosure of 1325 Independence Avenue SE, the proceeds of which were insufficient in value to repay the approximate $1,829,000 loaned to the defendant.

The indictment further alleges that the defendant took about $216,000 from client escrowed money from May to November 2006.

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.

In announcing the indictment, U.S. Attorney Machen and Assistant Director in Charge McJunkin commended the work of those who investigated the matter for the FBI’s Washington Field Office, including special agents and forensic accountants. They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Diane Hayes and Sarah Reis, and Assistant U.S. Attorney Daniel Friedman. Finally they acknowledged the work of Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case along with the office’s Asset Forfeiture and Money Laundering Section.

May 17, 2011

Seven Northland Residents Indicted in Parkville Mortgage Fraud Scheme

KANSAS CITY, MO—Matt J. Whitworth, United States Attorney for the Western District of Missouri, announced today that seven Kansas City, Mo., residents have been indicted by a federal grand jury for their roles in a mortgage fraud scheme that involved the purchase of a $605,000 house in Parkville, Mo.

Lloyd Claerhout, 26, Scott J. Schirmer, 32, William R. Wonder III, 31, David E. Twitty, 27, Cameron D. Bennett, 34, Jennifer R. Hernandez, 37, and Katherine S. Sartain, 53, all of Kansas City-North, were charged in a two-count indictment returned by a federal grand jury in Kansas City.

The federal indictment alleges that each of the defendants participated in a conspiracy to commit bank fraud from July to October 2007. In addition to the conspiracy, each defendant is charged with one count of bank fraud. According to the indictment, the defendants planned to purchase the property for $605,000 then immediately re-sell it at a profit.

Schirmer allegedly located a residential property at 8118 Clearwater Pointe in Parkville, with the understanding that it would be purchased and then resold at a profit to everyone involved. Schirmer paid Wonder $3,000, the indictment says, in order to use his name for the initial purchase of the property.

Wonder completed a loan application, with the assistance of Bennett and Twitty, which contained false financial information. Wonder allegedly signed two loan applications for Bank of America, totaling $605,000, which each contained false information regarding his monthly income, employment and bank account balances.

Schirmer then arranged to have Claerhout purchase the property from Wonder at a profit. Schirmer allegedly arranged the collection of the necessary down payment from Bennett, Wonder, Twitty and ot! hers to assist Claerhout in the purchase of the property. Co-defendants allegedly submitted loan applications and supporting documentation containing material false representations to North American Savings Bank, the mortgage lender.

Claerhout allegedly signed a Uniform Residential Loan Application for $637,600, which contained false and fraudulent information regarding his monthly income, employment, and bank account balances, in order to obtain a loan for a portion of the purchase.

Hernandez, who was employed as a teller at Mazuma, allegedly signed a “Request for Verification of Deposit” which stated that Claerhout had a current balance of $127,131 in his savings account, and an average balance for the previous two months of $127,882. Hernandez allegedly manipulated the records by transferring funds from other Mazuma accounts into Claerhout’s account to falsely reflect a substantial savings account balance, then later voiding the transfers.

Sartain, a real estate agent, allegedly signed a “Request for Verification of Rent or Mortgage Account” which falsely indicated that Claerhout was paying $4,300 rent.

Whitworth cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney David M. Ketchmark. It was investigated by the FBI.

May 14, 2011

Two Men Charged in Mortgage Fraud Scheme

David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury in Bridgeport has returned an indictment charging DOMINGOS DIAS, 41, of Trumbull, and HECTOR NATERA, 39, formerly of Bridgeport, with conspiracy, wire fraud, and bank fraud offenses stemming from their alleged involvement in a mortgage fraud scheme that has caused more than $3 million in losses to lenders. The indictment was returned on November 18, 2010, and was unsealed on May 11, 2011.

The indictment alleges that from approximately January 2006 to April 2008, DIAS, NATERA, and others conspired to obtain millions of dollars of fraudulent real estate loans from banks and real estate lenders for properties that were purchased in Bridgeport and New Haven. Working from offices located at 1944 Boston Avenue in Bridgeport, DIAS and NATERA held themselves out as real estate agents and mortgage brokers and recruited “straw buyers,” found sellers, and orchestrated and directed the creation and flow of fictitious documentation and information that were needed to obtain the fraudulent loans from lenders. After a loan for a property had been fraudulently obtained and a closing had occurred, DIAS and NATERA kept some of the fraud proceeds and distributed proceeds to other members of the conspiracy.

It is alleged that losses to mortgage lenders from this scheme total in excess of $3 million.

The indictment charges DIAS and NATERA with one count of conspiracy to commit wire fraud and bank fraud and one count of bank fraud. The indictment also charges DIAS with six counts and NATERA with four counts of wire fraud. Each of the charges carries a maximum term of imprisonment of 30 years and a fine of up to $1 million

DIAS was arrested on November 23, 2010. He had been released on bond until May 11 when U.S. Magistrate Judge Holly B. Fitzsimmons found that DIAS had violated the terms and conditions of his release and ordered the bond revoked and DIAS detained. The indictment was unsealed on that date.

NATERA is currently being sought by law enforcement. Citizens with information about this case, or any other suspected mortgage fraud activity, are encouraged to contact the Connecticut Mortgage Fraud Task Force at 203-333-3512, or by e-mail to ctmortgagefraud@ic.fbi.gov.

U.S. Attorney Fein stressed that 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.

This matter is being investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Ann M. Nevins.

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 is focusing on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes and short sale schemes.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; 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.

May 12, 2011

Former Davenport Mortgage Broker Arrested for Mortgage Fraud

DAVENPORT, IOWA—On November 22, 2010, following her arrest by agents of the Federal Bureau of Investigation, Winnifer Elvidge, age 56, of LeClaire, Iowa, appeared in United States District Court to answer an indictment charging three counts of mail fraud, four counts of bank fraud, 15 counts of wire fraud, and one count of conspiracy. The indictment alleges that Elvidge, a former mortgage broker, participated in a scheme to defraud banks and mortgage lenders during 2005 and 2006 in connection with the purchase of over 20 real properties in Davenport.

Chief United States Magistrate Judge Thomas J. Shields ordered Elvidge released on bond pending arraignment on November 30, 2010.

Each count of wire fraud and mail fraud is punishable by up to 20 years of imprisonment, a fine of up to $250,000, up to three years of supervised release, and a $100 special assessment to the Crime Victim’s Fund. Each count of bank fraud is punishable by up to 30 years of imprisonment, a fine of up to $1,000,000, up to five years of supervised release, and a $100 special assessment. The single count of conspiracy is punishable by up to five years of imprisonment, a fine of up to $250,000, up to three years of supervised release, and a $100 special assessment.

As in any criminal case, a charge is merely an accusation, and a defendant is presumed innocent unless and until proven guilty.

Posted By: Ralph Roberts @ 11:51 pm | | Comments Off | Trackback |
Filed under: Bank Fraud,Mail fraud,Mortgage Fraud,Mortgage Fraud Conspiracy,Mortgage Fraud Scheme,Wire Fraud

May 11, 2011

Kentuckiana Men Charged with Mortgage Fraud 19 Properties Totaling Nearly $5 Million

LOUISVILLE, KY—David J. Hale, United States Attorney for the Western District of Kentucky, announced today that a federal grand jury in Louisville returned a superseding indictment against six Kentuckiana men charging them with one count of engaging in a conspiracy to commit bank and wire fraud by intentionally devising a scheme to defraud various banks and mortgage lenders by submitting fraudulent mortgage loan information in the purchase of 19 properties in Louisville, Kentucky and Jeffersonville, Indiana totaling nearly $5 million dollars.

The Indictment alleges that between November 1, 2006 and August 30, 2008, Shawn Bramlett, Billy D. McDaniels, Dane Little, Kyle Kark, and Mark Hack, all of Jeffersonville, Indiana, and Stephen C. Netherton of Louisville, Kentucky, perpetrated a fraudulent scheme against various banks and commercial lending companies, including Wells Fargo Bank, Bank of America (formerly Countrywide Home Loans), Accredited Home Lenders, Primary Residential Mortgage Company, and First Franklin Financial Company by submitting applications and other documents for loans which contained false and fraudulent information, including false employment information, false and fraudulent bank account balances, and false representations that down payments were being made toward purchases of properties.

According to court records, after loan applications were approved for funding, the loan proceeds were wire transferred in interstate commerce to designated accounts with various banks in Louisville, Kentucky, whereby the defendants and other unnamed co-conspirators appropriated, for their personal benefit and gain, portions of the fraudulently obtained loan proceeds.

The Louisville grand jury returned a second count in the superseding indictment against Little and Netherton charging them with conspiracy to commit bank fraud in a separate but similar fraudulent scheme against various banks and commercial lending companies, by submitting applications and other documents for automobile loans which contained false and fraudulent information, including borrower’s employment, income and assets, and identity of the seller of the vehicle.

According to court records, between October 22, 2010 and December 31, 2010, the defendants caused fraudulent loans to be funded in the amount of $118,000, purportedly to purchase four vehicles, and in at least one instance, no car was purchased. After obtaining the loans, the defendants and other unnamed co-conspirators appropriated for their personal benefit and gain portions of fraudulently obtained loan proceeds.

In the event of a conviction, the maximum potential penalties are 40 years’ imprisonment, a $500,000 fine, and supervised release for a period of three years.

The case is being prosecuted by Assistant United States Attorney Jim Lesousky, and it was investigated by the Federal Bureau of Investigation and the Kentucky Department of Financial Institutions.

May 10, 2011

Second Indiana Defendant Sentenced in Mortgage Fraud Scheme

INDIANAPOLIS—Beverly A. Ross, 51, Noblesville, Indiana, was sentenced to 63 months in prison today by U.S. District Judge Larry J. McKinney following her guilty plea to wire fraud and bankruptcy fraud. This case was the result of a several month investigation by the Hamilton County Sheriff’s Office, Hamilton County Prosecutor’s Office, Indiana Attorney General’s Office – Homeowner Protection Unit, United States Trustee, Region 10, and the Federal Bureau of Investigation. Donella Locke, a co-defendant charged with Ross, was sentenced to 71 months in prison on January 27, 2010, following her conviction for wire fraud by a jury guilty verdict in September, 2009.

Ross engaged in a mortgage fraud scheme involving 34 properties ranging in value from $300,000 to $1.4 million. The homes were located in Noblesville, McCordsville, Carmel, Indianapolis, Brownsburg, Zionsville, Westfield, Fishers, Nineveh, and Fortville. Numerous lenders suffered a loss of about $5.6 million dollars as a result of the fraud.

The investigation began in 2005 after a relative of Ross reported that she had used his credit information without his permission. This relative’s credit report showed that properties and vehicles had been purchased and leased using his credit information. The scheme used a false social security number to the lender, and generated false verifications of employment, false verifications of rent, used false business names, and submitted false income amounts. For other properties, Ross represented that repair and rehabilitation work would be done to the properties. No such work was ever done. The false statements to the lenders resulted in them lending money they would not have otherwise loaned. Few payments were made on any of the mortgages obtained on the 34 properties.

Ross also filed five bankruptcy petitions between 2005-2006, the same time period she was engaging in her mortgage fraud scheme. The bankruptcy petitions were designed to immediately stop the foreclosure proceedings on the properties she purchased without permission. Ross never followed up by filing supporting paperwork for the petitions. Victim lenders trying to foreclose had to expend extra time and resources working through the foreclosure proceedings and the bankruptcy filings.

“It is essential that the citizens of this country have confidence that our bankruptcy system works fairly,” stated Nancy J. Gargula, the United States Trustee for Indiana and the Central and Southern District of Illinois (Region 10), “and I am gratified by the actions taken by United States Attorney Morrison and the members of the Bankruptcy Fraud Working Group for Southern Indiana to prosecute those who engage in fraudulent conduct. Today’s sentence sends a strong message that abusing the bankruptcy system will not be tolerated.” Members of the Southern Indiana Bankruptcy Fraud Working Group include representatives of the United States Attorney’s Office for the Southern District of Indiana; Office of the United States Trustee for Indiana and Southern and Central Illinois (Region 10); Federal Bureau of Investigation; Internal Revenue Service; United States Postal Inspection Service; Social Security Administration; and Department of Health and Human Services, among others. The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

“This individual engaged in a brazen pattern of deceit to mislead victims out of millions of dollars, and now she is being held accountable for her actions. Protecting the home-buying public from mortgage fraudsters is a high priority for the Indiana Attorney General’s Office, and so we are pleased that the close collaboration with our federal and state colleagues produced a successful outcome in this case,” said Deputy Attorney General Gabrielle Owens, section chief of the Homeowner Protection Unit (HPU) of the Attorney General’s Office.

According to Assistant U.S. Attorney Gayle L. Helart and Bradley P. Shepard , who prosecuted the case for the government, Judge McKinney also imposed three years supervised release following Ross’s release from prison. Ross was ordered to make restitution in the amount of $5.6 million dollars to 21 different victim

April 25, 2011

Former Las Vegas Resident Charged with Committing Mortgage Fraud in Nevada

LAS VEGAS—A former Las Vegas resident has been charged with federal conspiracy and fraud charges for his involvement in a Nevada mortgage fraud scheme involving straw buyers and falsified mortgage loan documents, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Brian K. Jackson, 38, currently of Anaheim, California, was indicted by the Federal Grand Jury in Las Vegas on October 21, 2009, and charged with Conspiracy to Commit Bank Fraud, Mail Fraud, and Wire Fraud. On Tuesday, November 10, 2009, Jackson was arrested in the Los Angeles area, and appeared before a U.S. Magistrate Judge there and was released on a $50,000 surety bond. Jackson is scheduled to be arraigned by U.S. Magistrate Judge George W. Foley in Las Vegas on Friday, November 20, 2009, at 8:30 a.m.

The Indictment alleges that from about 2002 to May 14, 2008, Jackson, owner of Unlimited Properties, a now-revoked Nevada limited liability corporation, participated in a conspiracy to defraud financial institutions by causing money from mortgage loans to be diverted to his own use and benefit. Jackson solicited and paid persons (straw buyers) to apply for mortgage loans in their name. The loans were processed through Sapphire Mortgage, located in Henderson, Nevada. Jackson caused false and fraudulent information to be placed in the straw buyers’ mortgage loan applications concerning their employment, income, assets, intent to occupy property, etc. Jackson caused the same home to be purchased multiple times by different straw buyers at ever increasing prices. Jackson caused the “equity” to be diverted to himself personally or his company, Unlimited Properties. Jackson also placed renters in the properties, and caused the mortgages to default.

The Indictment specifically discusses several transactions involving a home located at 2061 Scenic Sunrise Drive in Las Vegas. Between March 2002 and late 2004, Jackson twice orchestrated the sale of the property using two straw buyers and the placement of false information in their loan applications. In June 2004, Jackson also orchestrated the sale of the Scenic Sunrise property to himself and falsely stated in his loan application that he intended to reside in the property when he knew he did not. During this period, Jackson also leased the Scenic Sunrise property to another individual and accepted money from the individual as guarantee that he would purchase it in the future, even though Jackson knew that the property at the time was owned by the first straw buyer and was in the process of being sold to the second straw buyer. The indictment alleges that Jackson or his company received about $179,000 from these fraudulent transactions.

In May 2008, the owner of Sapphire Mortgage, Cindy Birkland, was arrested and charged in state court in Las Vegas with mortgage fraud related offenses. If convicted, Jackson faces up to 30 years in prison and a $1,000,000 fine.

This investigation is being led by IRS Criminal Investigation and the FBI, and other agencies of the Southern Nevada Mortgage Fraud Task Force, including the Las Vegas Metropolitan Police Department, the Nevada Attorney General’s Office, Office of the Inspector General for the Social Security Administration, Office of the Inspector General for the Department of Housing and Urban Development, the U.S. Postal Inspection Service, and the U.S. Secret Service. The case is being prosecuted by Assistant United States Attorney Brian Pugh. Persons who have information concerning potential mortgage fraud may contact the Southern Nevada Mortgage Fraud Hotline at (702) 584-5555.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

April 23, 2011

Five Indicted on Mortgage Fraud Charges

Bay Area Mortgage Broker and Real Estate Agent Among Those Charged with Conspiring to Defraud Four Different Banks of More Than One Million Dollars

SACRAMENTO, Calif.—Acting United States Attorney Lawrence G. Brown announced today that a federal grand jury has returned an eight-count indictment charging DENNIS AARON MOORE, 50, of Hillsborough, Calif., VERONIKA WRIGHT, 33, of San Ramon, Calif., MITCHELL WRIGHT, 36, of San Ramon, Calif., HAIYING FAN, 42, of Millbrae, Calif., and GARY LORENZO GEORGE, 50, of Olivehurst, Calif., with various crimes in connection with their participation in a mortgage fraud scheme with respect to the purchase of a series of homes in South Lake Tahoe and Nevada City, Calif. Each defendant is charged with one count of conspiring to commit bank fraud and mail fraud; defendants MOORE, VERONIKA WRIGHT, MITCHELL WRIGHT, and FAN are further charged with two counts of bank fraud; and MOORE, VERONIKA WRIGHT and GEORGE are each charged with making false statements on loan applications. MOORE and FAN are also charged with two counts of money laundering. The indictment alleges that the victim lending institutions suffered over $1,000,000 in losses as a result of the defendants’ conduct.

This case is the product of a joint investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.

“Aggressive pursuit of those who engaged in mortgage fraud during the boom and bust of the region’s housing market remains a top priority for federal law enforcement. These scams hurt not just the lending institutions, but area homeowners and taxpayers alike,” said acting U.S. Attorney Brown.

According to Assistant United States Attorney Sean C. Flynn, who is prosecuting the case, the indictment alleges that between June 2005 and April 2007, the defendants conspired to defraud Washington Mutual Bank, doing business as Long Beach Mortgage, Countrywide Bank, FSB, and other lenders through a “cash-back-to-buyer” mortgage fraud scheme. MOORE purchased five separate properties in South Lake Tahoe and Nevada City, each of which was funded with large primary loans or first mortgages from various lending institutions. It is alleged that as part of each purchase agreement, MOORE insisted that each seller agree that a substantial “commission” – sometimes in excess of 20 percent of the purchase price – be paid from the sale proceeds to MOORE’s real estate agent, defendant FAN. In order to induce the seller to agree to such a commission, MOORE often offered to purchase the properties at prices above the respective list prices.

MOORE further collaborated with his mortgage broker, VERONIKA WRIGHT, and his other co-conspirators to submit to the lending institutions home mortgage loan applications that contained various false statements with respect to MOORE’s income, employment, liquid assets, and compliance with tax obligations. MITCHELL WRIGHT is alleged to have created a bogus Web site to substantiate MOORE’s false employment claims, and GEORGE, a tax professional, created false letters to support MOORE’s false financial claims. The banks relied on these false statements in disbursing funds pursuant to the loans. It is further alleged that once the funds were disbursed, FAN kicked back the majority of her “commission” to MOORE, completing the cashback-to-buyer mortgage fraud scheme.

The maximum statutory penalty on the conspiracy charge is five years in prison, while the bank fraud and false statement charges carry a 30-year maximum sentence. The maximum sentence that can be imposed with respect to the money laundering charges against MOORE and FAN is 10 years in prison. However, the actual sentence will be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and will be imposed at the discretion of the court.

The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Michigan Investment Adviser Pleads Guilty to Bank and Wire Fraud Ponzi Charges

Dante DeMiro, 43, of Milford, pled guilty today to five counts of bank and wire fraud, United States Attorney Barbara McQuade announced. Joining in the announcement was Special Agent in Charge Andrew Arena, Federal Bureau of Investigation (FBI).

According to court documents, DeMiro was an investment adviser to various municipalities, credit unions, school districts, and trade unions through his Southfield-based companies MuniVest Financial Group and MuniVest Services LLC. From August 2007 to September 2010, DeMiro used the MuniVest entities to operate a bank and wire fraud Ponzi scheme. DeMiro falsely promised investor clients that he would invest their funds in various certificates of deposit. He did not invest their funds as promised, but instead, used their funds to purchase personal items and real property, to gamble, to make payments to other investors in the same scheme, and to make loans to several individuals and a local jewelry store. DeMiro stipulated that the loss caused by his fraud exceeds $7 million, and that he abused a position of trust in his fiduciary capacity as an investment adviser.

“We have seen more and more of these investment schemes, which prey upon school districts, municipalities, and unions,” McQuade said. “Our hope is that cases like this one will deter other investment advisors from stealing from these vulnerable investors.”

Special Agent in Charge Arena stated, “Today’s swindlers artfully conceal their greed with sophisticated marketing and numerous misrepresentations. Investors and pension plan participants must remain diligent in following their money.”

Sentencing is scheduled for July 12, 2011 at 10:00 am before the Honorable Lawrence P. Zatkoff in Port Huron.

The case is being prosecuted by Assistant United States Attorney Erin Shaw.

Posted By: Ralph Roberts @ 10:54 am | | Comments Off | Trackback |
Filed under: Bank Fraud,Investment Fraud,Ponzi Scheme,Wire Fraud

April 22, 2011

Weston Man Admits Participating in Mortgage Fraud Conspiracies

David B. Fein, United States Attorney for the District of Connecticut, announced that STEVEN J. KOTTAGE, 45, of Weston, pleaded guilty today before United States District Judge Mark R. Kravitz in New Haven to two counts of conspiracy stemming from mortgage fraud schemes in which KOTTAGE participated.

According to court documents and statements made in court, KOTTAGE conspired with others to commit wire fraud by making materially false statements to H&R Block Home Mortgage, Inc., including a false loan application, W-2, employment verification, and pay stub, in connection with a mortgage on a home on Fire Island, New York. In addition, KOTTAGE admitted that he conspired with others to commit bank fraud by submitting a materially false loan application to Washington Mutual to refinance a condominium in Hillsboro Beach, Florida. A co-defendant, Mary Ellen Durso, served as the straw owner for the condo in order to obtain the fraudulent loan proceeds for the benefit of KOTTAGE and another co-conspirator. Through both schemes, KOTTAGE and others defrauded Wells Fargo and Freddie Mac of more than $600,000.

Judge Kravitz has scheduled sentencing for July 11, 2011, at which time KOTTAGE faces a maximum term of imprisonment of 30 years on each count. He also will be ordered to pay restitution in the amount of at least $616,547.93.

KOTTAGE is currently detained.

On December 14, 2010, Durso pleaded guilty to one count of conspiracy and five counts of filing false tax returns. On March 9, 2011, she was sentenced to three years of probation, the first six months of which she must serve in home confinement.

This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney David T. Huang and Senior Litigation Counsel Richard J. Schechter.

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. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, 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; 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.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

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