Two 35-year-old loan processors from Pembroke Pines and Hollywood recruited a 33-year-old North Lauderdale man as a straw buyer in a $2.5 million mortgage fraud scheme, according to William Ferrer, U.S. District Attorney for Southern Florida. On August 18, the trio pleaded guilty to one count of making false statements on a HUD-1 Real Estate Settlement Form.

Ferrer said Tracey Balli, Justina Bryan and Delano McLennon, along with a fourth defendant from Jupiter, sought to enrich themselves by fraudulently causing real property in Fort Lauderdale, Jupiter, Cape Coral, and Royal Palm Beach, Florida, to be bought and sold through straw buyers who obtained high value mortgages.

Records filed with the court and statements made during the plea hearing show that in order to obtain mortgages on these properties, the defendants and other co-conspirators submitted fraudulent documents to various mortgage lenders across the United States. Based on these false documents, the mortgage lenders issued approximately $2,500,000 in loans to the defendants and their co-conspirators.

Sentencing has been scheduled for November 19, 2010 before U.S. District Judge Ursula Ungaro.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office; and J. Thomas Cardwell, Commissioner, State of Florida Office of Financial Regulation, announced that defendant John Fisher, 35, of Jupiter, Florida, pled guilty this morning in federal court to one count of conspiracy to commit mail and wire fraud and to one count of substantive mail fraud.

Also pleading guilty today were defendants Tracey Balli, 35, of Pembroke Pines, Florida, Justina Bryan, 35, of Hollywood, Florida, and Delano McLennon, 33, of North Lauderdale, Florida. These defendants pled guilty to one count of making false statements on a HUD-1 Real Estate Settlement Form in connection with a mortgage fraud scheme. Sentencing has been scheduled for November 19, 2010 before U.S. District Judge Ursula Ungaro.

According to records filed with the court and statements made during the plea hearing, the defendants and other conspirators engaged in a scheme to enrich themselves by fraudulently causing real property in Fort Lauderdale, Jupiter, Cape Coral, and Royal Palm Beach, Florida, to be bought and sold through straw buyers who obtained high value mortgages based upon fraudulent mortgage loan applications.

A co-conspirator orchestrated the scheme, in which defendant John Fisher, a licensed mortgage broker, Tracey Balli and Justina Bryan, both loan processors, joined. Balli and Bryan, along with other conspirators, recruited straw buyers, including Delano McLennon, to join the scheme.

In order to obtain mortgages on these properties, the defendants and other co-conspirators submitted and caused to be submitted fraudulent documents to various mortgage lenders across the United States. Based on these false documents, the mortgage lenders issued approximately $2,500,000 in loans to the defendants and their co-conspirators.

“South Florida continues to be a hot spot for mortgage fraud,” said Special Agent in Charge John V. Gillies of the FBI Miami Division. “It affects all of us, making homes artificially overpriced and then eventually losing value through neglect. The housing industry is a key component of our economy and combating mortgage fraud will remain a top priority for the FBI.”

Mr. Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, the FBI, and the State of Florida Office of Financial Regulation. This case is being prosecuted by Assistant U.S. Attorneys Randy D. Katz and Jeffrey H. Kay.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, Michael K. Fithen, Special Agent in Charge, U.S. Secret Service, and J. Thomas Cardwell, Commissioner, State of Florida Office of Financial Regulation announced that on Friday, August 6, 2010, a federal jury in Miami convicted Mayelin Salas, 36, of Miami Springs, and Lucy Segurola, 51, of Miami, for their participation in a mortgage fraud scheme that resulted in approximately $21 million in fraudulent loans. Salas and Segurola were found guilty of conspiracy to commit mail and wire fraud. Salas was also found guilty of mail fraud.

According to the evidence presented at trial, Salas was an employee of State Mortgage Lending, a mortgage lending company in Doral, which was owned and operated by Magile Cruz. Cruz previously pled guilty and was sentenced in January 2009 to 120 months’ imprisonment for her participation in this scheme. Cruz’s other companies included Star Lending Mortgage, Sherley Title Services, Doral Title Services, and Professional Title Express, all in Miami-Dade County.

According to the trial evidence, in 2005, Salas participated in a double HUD scheme through which the defendants created and submitted to Fremont Investment and Loan, a lending institution, false duplicate HUD-Settlement Statement Forms, which grossly inflated the true *purchase price of a property that Salas was purchasing. Salas received a $5,000 payment from Cruz for her participation in the scheme.

The evidence at trial established that Lucy Segurola acted as a straw borrower on at least three loans totaling more than one million dollars. Segurola allowed her credit information to be used to apply for these loans knowing that she was not the true borrower and that Cruz would be making the monthly mortgage payments. The loan applications also included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2. Segurola was paid a total of $15,000 for her participation in the scheme.

The defendants face a maximum term of imprisonment of twenty years as well as fines and mandatory restitution. Sentencing has been scheduled for October 22, 2010.

Mr. Ferrer commended the investigative efforts of the Federal-State Mortgage Fraud Strike Force, with special commendation to the U.S. Postal Inspection Service, U.S. Secret Service, and the State of Florida Office of Financial Regulation.

A former attorney and three mortgage brokers are among a group of South Floridians charged in a $6 million scam that could land them behind bars for up to 20 years.

Jerry Velazquez, 38, of Miramar; Guillermo Moran, 38, of Miami Beach; Carolina Visbal, 32, of Miami Beach; and Rodolfo Landires, 37, of Miami, allegedly submitted fraudulent loan applications and closing documents to purchase several properties, mostly condos, in Miami-Dade County, according to a news release from the U.S. attorney for the Southern District of Florida.

Moran, Landires and Visbal, all mortgage brokers, allegedly recruited straw buyers to purchase the properties at an inflated price.

Velazquez, who was disbarred in 2007, allegedly handled the closings on the fraudulent loans. It is alleged he would, among other things, create two sets of closing documents – one that was given to the seller and reflected the true closing price, and another that was sent to the lender and reflected the inflated sale price.

As a result, lenders issued more than $6 million in mortgage loans.

A former Cape Coral police sergeant has received three years probation in federal count for his participation in a $4.2 million mortgage fraud scheme.

U.S. District Judge John E. Steele sentenced James J. O’Brien, 37, to the probation, plus $468,750 in restitution and 180 days on detention, Monday. O’Brien had pleaded guilty to one count of loan and credit application fraud.

The charge carried a maximum sentence of 30 years in federal prison.

“As for his sentence, we know that he had a severe medical situation, so obviously that was taken into account,” Steve Cole, the spokesman for the U.S. Attorney’s Office, Middle District of Florida, said Tuesday.

Cole would not comment further on the case.

O’Brien participated in the “cash-out” mortgage fraud conspiracy with a group of individuals that included Stephen Petrovich, 35, a former detective with the CCPD and the son of former Cape Coral Police Chief Rob Petrovich. The scheme took place from 2007-08 and involved eight Cape properties.

The group reported “inflated sales prices to lenders and falsified applications for loans based on the higher prices, then pocketed the excess loan proceeds at closing,” according to court documents. O’Brien pocketed about $95,000, which he used to refinance his residence, pay bills and loans, and buy a car.

Attorney Peter D. Aiken, of Fort Myers, represented O’Brien. Aiken was unavailable for comment Tuesday, according to his office staff.

Assistant U.S. Attorney Nicole Waid prosecuted the case.

O’Brien submitted his voluntarily resignation with the CCPD in May. Hired in August 1999, his annual salary was $71,448. Prior to resigning, O’Brien had been on administrative duty pending an outcome in the federal investigation.

O’Brien is the last defendant connected to the case to be sentenced.

Stephen Petrovich of Cape Coral was sentenced July 6 to 24 months for one count of conspiracy to commit bank fraud and wire fraud and 24 months for one count of money laundering by U.S. District Judge Charlene Honeywell. The sentences will run concurrently, according to the U.S. Clerk’s Office.

The charges of one count of conspiracy to commit bank fraud and wire fraud and one count of money laundering carried a maximum sentence of 30 years.

Tyler Forrey, 28, of Cape Coral, was sentenced July 26 on the same two counts. He received 18 months for each count, to be served concurrently. Honeywell handed down the same sentence on the same two counts to Troy Bossert, 32, of San Antonio, Texas, on July 19. They also run concurrently.

On June 21, Honeywell sentenced Steven Reese, 32, of Cape Coral to the same 18 months each for the two counts, to be served concurrently. Ryan O’Brien, 34, also of Cape Coral, received 15 months each for the same two counts on June 28. Again, Ryan O’Brien’s sentences will run concurrently.

By TIFFANY REPECKI

Steve Stoll, a politically connected Republican attorney in Fort Lauderdale arrested last month in a mortgage fraud case, is now under investigation by the Florida Bar.

Florida Bar spokeswoman Karen Kirksey declined to provide specifics except to confirm that Stoll and fellow lawyer Stephen Orchard, also indicted in the fraud case, are under investigation.

In June, a federal indictment detailed how a group of attorneys, police officers and mortgage brokers falsified documents to obtain $16.5 million in loans they used to buy and flip properties.

Stoll’s attorney, Robert Nicholson, who has said his client is innocent, was unaware the Bar was investigating but wasn’t surprised. “The Bar as a matter of course opens an investigation anytime a licensed attorney is charged with a criminal offense.”

Stoll and his wife, Rebecca Stoll, a former North Broward Hospital District commissioner, are familiar names in Broward political circles. They have supported candidates in recent years, including Gov. Charlie Crist in 2006 and in 2009 and Bill McCollum in 2009, and raise money for the Fort Lauderdale Museum of Discovery and Science.

– AMY SHERMAN

Read more: http://www.miamiherald.com/2010/07/25/1745631/gop-lawyer-steve-stoll-under-inquiry.html#ixzz0v2arBQq2

Dr. Fred Bloom unwittingly sold this house into what may have been a mortgage-fraud ring.

I may be on the losing end of a $200 million mortgage-fraud scheme.

Earlier this year, my colleagues and I bought a tiny slice of a toxic asset, a bond backed by a bunch of bad mortgages. We’ve been using the asset as a window into the housing boom and bust.

Recently, a group of reporters at the Sarasota Herald-Tribune told us that one of the mortgages in our asset was part of a real-estate scheme being investigated by the FBI.

That told me that, to understand how the scheme worked, I should learn the story of the house on Cove Terrace.

The house is a nice Florida place — red-tile roof, pool, boat dock. In 1999, it was owned by Dr. Fred Bloom, a doctor who unwittingly sold the house into what may have been a mortgage-fraud ring.

Bloom spent a happy decade raising kids here. In 2000, he sold the house for $600,000 — much less than he’d hoped. The buyer was represented by Craig Adams, a real-estate agent known in Sarasota as a guy who could make deals happen.

Two weeks later, Adams re-sold the house for $725,000.

“I was really upset!” Bloom says. He thought his real-estate agent had misled him about the value of the house. But there was more to the picture than he knew.

According to Matthew Doig, an investigative reporter who has written about mortgage fraud for Sarasota Herald-Tribune, this is what happened:

Adams had a group of friends and associates. One would buy a house. Then he’d sell it to another, for a higher price. Then it would get sold again, at a price that was still higher. The sales often wouldn’t get listed publicly and Adams would set the prices.

With each sale, someone would take out a loan that was more than big enough pay off the previous loan. The players would split the remaining cash.

“After Dr Bloom is out of the picture, that house is completely controlled by Craig Adams,” Doig says. “Every time it is, sold Adams is representing both the buyer and seller.”

I called Adams seeking comment, but he didn’t return my calls.

In four years, Bloom’s house had six owners — and the sale price went from $600,000 to more than $2 million.

Dr. Bloom became more and more confused by the escalating price. The house didn’t look better. In fact it looked worse:

“The yard was really in disrepair,” he said. “It looked like it was vacant.”

This kind of scheme is common during housing booms, according to Guy Cecala, of the trade magazine Inside Mortgage Finance. But passing a house back and forth, and taking out ever bigger loans, has to end badly for someone.

By 2007, Bloom’s old house was owned by yet another associate of Craig Adams — a guy who wound up defaulting on more than $2 million in loans. The bank foreclosed on the house.

The banks clearly lost big time. They kept handing out the loans because they were caught up in the bubble too.

At the height of the bubble, a third of the people buying houses were never planning to live there. That doesn’t mean all those loans were all fraudulent.

At the same time, mortgage fraud can be something as simple as saying you’re going to live in a house you never plan to set foot in.

The FBI is looking into more than 3,000 cases of mortgage fraud. And in Sarasota they’re doing it with help of Craig Adams: The Sarasota Herald-Tribune has reported that he’s gone from real estate genius to FBI informant.

By Fred Bloom, Chana Joffe-Walt/NPR

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office; Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service; J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulations; Amos Rojas, Jr., Special Agent in Charge, Florida Department of Law Enforcement; and Alex Sink, Chief Financial Officer, Florida Department of Financial Services, announce the July 6, 2010 filing of a criminal information against defendant Stanley Gabart, 29, of Miami, FL. The defendant surrendered on Thursday, July 8, 2010, and made his initial appearance in West Palm Beach federal court.

The two-count information charges defendant Gabart with conspiracy to commit bank fraud and making false statements on loan applications to Bank of America and JP Morgan Chase Bank, N.A., in connection with the purchase of various properties. If convicted, the defendant faces a maximum statutory term of imprisonment of 30 years on each count.

Among the properties listed in the information are 3586 Royalle Terrace, Wellington, Florida; 10475 Trianon Place, Lake Worth, Florida, and 540 West Avenue, #1414, Miami Beach, Florida. According to the allegations in the information, Gabart conspired with others to submit loan applications for the properties that contained false information about the applicants’ employment, income, assets and intention to live in the homes. In addition, Gabart allegedly recruited straw purchasers and paid the straw purchasers a fee for participating in the scheme. The fraud scheme resulted in more than $7 million in losses to several banks.

This case is the result of the investigative efforts of the multi-agency Palm Beach Mortgage Fraud Task Force. Mr. Ferrer commended the investigative efforts of the FBI, U.S. Postal Service, State of Florida’s Office of Financial Regulation, FDLE, and State of Florida’s Department of Financial Services. The case is being prosecuted by Assistant U.S. Attorney Ellen Cohen.

An information is merely an accusation and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.

Douglas Lee Carter Sr. has been linked to $30 million in mortgage foreclosures since the 1980s

A Marco Island businessman arrested on state and federal charges involving numerous shady mortgage deals was sentenced today to 2½ years in a federal prison for mortgage fraud.

U.S. District Judge John Steele also ordered Douglas Lee Carter Sr., 64, to serve three years of supervised release for filing a false mortgage application, prohibited him from entering into any financial dealings over $500 without his probation officer’s permission, ordered him to undergo a mental health treatment program and debt management counseling.

Random drug tests also are part of his probation and he must provide a DNA sample.

Carter, who had since moved to East Naples, faced 33 months under federal sentencing guidelines, which consider his past criminal history.

At sentencing this morning in Fort Myers, Chief Assistant U.S. Attorney Douglas Molloy argued for 2½ years, while Assistant U.S. Public Defender Russell K. Rosenthal asked for leniency, citing Carter’s numerous health problems and declining health. As a result, the judge agreed to allow him to serve his term at a federal penitentiary close to Collier County.

Law enforcement authorities don’t expect him to live past his prison term.

None of Carter’s many victims spoke at the hearing in Fort Myers, which was attended by his two grandsons and son, Douglas Carter Jr.; none spoke at sentencing. The victims could not be immediately reached for comment by the Daily News.

Molloy referred comments to Steve Cole, the office spokesman, who could not be reached for comment. Rosenthal declined comment.

The judge will hold a restitution hearing on Sept. 20. Since the fraudulent deals, the bank Carter obtained loans through has been purchased four times.

Carter was among hundreds of people, including police officers, brokers, title agents, bankers and others, who were part of a large-scale federal investigation into mortgage fraud throughout the state.

A week before he was to go to trial in April, he pleaded guilty as part of a plea agreement that dropped two counts of wire fraud. He’d faced up to 30 years in a federal prison without parole, up to five years of supervised release afterward, and a $1 million fine.

Carter served time in federal prison from 1992 to 1996 for a marijuana dealing conviction. When he was arrested by Collier County Sheriff’s economic crimes investigators and federal agents, he was serving seven years of probation out of Georgia for interstate forgery.

Carter’s record of land deals in Collier Circuit Court is six pages long, filled with more than $30 million in mortgage foreclosures, judgments, and dissatisfied sellers and buyers dating back to 1984. That prompted Collier County Sheriff’s Economic Crimes Unit investigators to ask the FBI to investigate the huge case.

Of 84 civil cases naming him as a defendant, there are judgments for mortgage foreclosures, non-payment of contracts, breach of contract, and specific performance - for reneging on deals and payments.

In most, Carter would sign promissory notes to sellers and then stop paying after financing homes for more than they were worth and pocketing the difference. Although some sellers were indicted for their involvement, many were innocent victims who lost millions.

Robbie and Jennie Gaude of Minnesota, who sold Carter their Marco Island home on Bald Eagle Drive, lost $300,000 in the $719,000 sale in 2005. They said Carter financed the purchase by adding $50,000 more to the mortgage, then pocketed $50,000.

“He would always give us a song and dance,” Gaude said in an interview last year with the Daily News. “He never intended to pay anybody. … He’s the biggest scam artist. Not as big as Bernie Madoff, but that’s who he’d love to be. Many people were bilked.”

In 2007, Carter was involved in several Marco Island real estate deals that led to an indictment against 31 people, but he wasn’t named in that case. Two years later, in September, a federal grand jury handed up an indictment against Carter, after he’d been arrested by Sheriff’s deputies on other fraud charges involving fraudulent land deals.

After he pleaded guilty in April in the federal case, the State Attorney’s Office in Naples dropped its charges.

The federal plea agreement says Carter admits that on March 2, 2006, he closed on a home at 728 102nd Ave. N. in Naples Park, agreeing to pay Alan and Jane Lantieri $600,000. When he applied for a $540,000 loan, he lied on a Housing and Urban Development (HUD) statement, saying there was only a $60,000 second mortgage loan on the property, although there was a third mortgage from the Lantieris for $90,000.

The mortgage was filed on March 23, 2006, in Collier County.

The federal investigation showed that on March 2, 2006, he’d signed a mortgage agreement with the Lantieris for $150,000, which represented the $60,000 mortgage he’d listed and the $90,000 mortgage he’d neglected to mention. He never satisfied the mortgage with the lender, the house went into foreclosure and is now valued at $207,000.

The consent agreement shows he received a $540,000 loan from Long Beach Mortgage Co., funded by Washington Mutual Bank.

The indictment also had accused Carter of posing as a lender called Unlimited Expectations LLC and asking for $54,000 up-front in March 2, 2006, from a California broker who was trying to purchase a home for another man on 102nd Avenue North in Naples Park. Carter never applied for the loan, the indictment says, and used the money wired to his bank account.

In September 2006, he had $572,000 wired to him from Lender’s Direct Capital Corp. in California for an alleged sale of a home on Kings Lake Boulevard in East Naples.

The indictment alleges that on the HUD statement, Carter purposely omitted a $147,766.47 mortgage already listed against the property. After he received the loan, the indictment says, he defaulted.

In May 2009, the indictment says, a Washington man wired him $24,000 and a California man wired him $30,000, which was placed in his bank account.

By Aisling Swift

A new mortgage fraud indictment stands out because it accuses seven current and former police officers and an FBI agent — along with lawyers and brokers — of conspiring to obtain millions in illegal loans.

A network of Broward County attorneys, law enforcement officers and mortgage brokers are accused of falsifying a slew of documents to obtain $16.5 million in loans that they used to buy and flip properties during the real estate boom, according to an indictment unsealed Wednesday.

Federal prosecutors said the Broward-based group was organized by ex-Plantation police officer Joseph Guaracino, who recruited five other current and former cops in that city as well as a Lauderhill officer and an FBI agent. They allegedly posed as “straw” buyers who pledged to buy and live in 38 condos and homes in Broward and Palm Beach counties.

The defendants, arrested Wednesday, are accused of conspiring to submit false income records, job descriptions, bank statements and loan applications to dupe lenders in South Florida and elsewhere from 2004 to 2007.

But their real goal — disguised by the false paperwork — was to rent the properties and then sell them, thereby “realizing substantial profit,” according to the indictment.

Without working together as “straw” buyers looking for primary residences, the individuals would never have been able to quality for so many mortgages and generate handsome profits, the indictment says. Some of the profits were used to purchase even more homes.

The real estate closings were handled by prominent Fort Lauderdale attorney Steven Stoll, who owned a title company, and Boca Raton lawyer Stephen Orchard, who worked with Stoll. The title attorneys falsely represented to the mortgage lenders the source of the down payments from borrowers needed to close the transactions, according to the indictment returned Tuesday by a federal grand jury in Fort Lauderdale.

Stoll’s attorney Robert Nicholson on Wednesday defended his client, saying, “Steve Stoll is very disappointed the government has decided to ignore the substantial evidence of his innocence.”

Two other mortgage brokers and a processor who worked for Stoll were also charged.

Although the law enforcement officers didn’t use their positions to carry out the alleged mortgage scheme, their case stands out amid a recent flurry of federal loan fraud prosecutions because it involves eight current and former law enforcement officers. The 13 defendants named in the indictment will have their first appearances in federal court Thursday.

`BETRAYED’

“This indictment charges a group of individuals who conspired to enrich themselves by committing mortgage fraud,” said U.S. Attorney Wifredo Ferrer. “It includes a number of professionals who betrayed their profession for greed, and in the process, undermined the integrity of the mortgage marketplace on which we all rely.”

Among others named in the indictment: Joseph Guaracino’s brother, Dennis Guaracino Jr., and John Velez, both former Plantation police officers. Velez, a former SWAT team and Street Crimes Unit member, was named Plantation Police Department officer of the year in December 2004.

Also charged: current Plantation officers Daryl Radziwon, Casey Mittauer and Joseph DeRosa, along with Lauderhill officer Joseph LaGrasta.

FBI agent Robert DePriest, of Plantation, was also arrested. An FBI spokeswoman declined to comment.

In a statement, the Plantation Police Department said that in June 2007 it became aware that several of its officers were possibly involved in mortgage fraud and requested the assistance of the Florida Department of Law Enforcement to investigate.

FDLE, along with the U.S. attorney’s office, notified the department in January that three of its officers were targets of a probe. They were immediately placed on administrative leave with pay. On Wednesday, their status was changed to unpaid leave.

One of the officers, Mittauer, used to be a volunteer assistant baseball pitching coach at Dade Christian School, his alma mater.

Lauderhill Police said Wednesday that LaGrasta was placed on paid administrative leave, but declined further comment.

The two mortgage brokers charged in the indictment were Matthew Gulla and Rene Rodriguez Jr.

Jacqueline Trumbore, who worked for Stoll’s company, TurnKey Title Corp., was also named in the indictment. She handled real estate closings and later became another straw buyer in the alleged real estate scam, the charges state.

WELL-KNOWN

Steven Stoll and wife Rebecca are well known in Republican and philanthropic circles in Broward.

Stoll let Republican activists use his mortgage company office to phone bank for Republican candidates, and the Stolls sometimes attended fundraisers, said Bob Wolfe, a Broward Republican activist.

Stoll was one of the lawyers who fought with Broward’s canvassing board about the 2000 presidential recount.

He has given to a handful of federal Republican candidates since 2000 — including $4,800 to Gov. Charlie Crist, who is running for U.S. Senate.

BY JAY WEAVER, JAMES H. BURNETT III AND AMY SHERMAN
jweaver@MiamiHerald.com

For the third time in two weeks, investigators announced 10 arrests in a multimillion-dollar mortgage fraud scheme in South Florida. Five others are being sought.

Continuing a crackdown on mortgage fraud in South Florida, authorities said Friday they arrested 10 people who orchestrated a web of deceit by stealing identities, ripping off banks and cheating homeowners.

The scheme, law enforcement said, enriched the culprits to the tune of $8 million.

Five others who took part in the scheme remain at large, and warrants for their arrests have been issued.

The group is accused of using straw buyers, mortgage brokers and title agents to buy, sell and refinance homes, law enforcement said.

The announcement Friday is the third major prosecution of mortgage profiteers in the past two weeks, including one this week involving seven current and former police officers and an FBI agent.

“Again, this is not new here in South Florida, unfortunately,” said Amos Rojas Jr., of the Florida Department of Law Enforcement.

So far, a total of 20 people have been charged in a scheme in which at least 14 properties were fraudulently purchased or sold. Of those, five were arrested earlier.

Mortgage fraud triggers a domino effect of pain for consumers — degrading neighborhoods with foreclosures, and often making it more difficult to get loans, experts say.

During Friday’s press conference, statewide prosecutor William Shepherd said mortgage fraud victimizes everyone who owns a home in Florida. Agents with the Florida Department of Law Enforcement spent four years investigating the case.

Straw buyers, sometimes using stolen identities including some of people who had died, were used to get loans and purchase properties. Some of the properties were flipped.

In some instances, FDLE says, the group bought homes from legitimate sellers, but using documents faked by the title company reported a higher sale price to the bank than what was paid to the seller. The ring pocketed the difference.

In other cases, they stole properties by forging deeds, transferring them to others involved, and then taking the proceeds.

The straw buyers either were promised money for their role in the scheme, or in some cases, told some profits would be given to a religious organization known as the Rock of Ages Crusades.

That company was formed by Jahi Hasanati, 51, who said the money would be used to provide “relief to underdeveloped countries and impoverished children.”

A warrant identifies Hasanati as a recruiter who was involved in falsifying documents, and forgery.

The warrant goes on to say another man named Elijah Cupid, 52, was a recruiter and involved in distributing the money and money laundering.

Both remain at large and are wanted on charges of racketeering, conspiracy to commit racketeering and grand theft.

On Thursday, agents arrested Hollywood resident Michelle Mediavilla-Camacho, identified as the closing title agent, on charges that she falsified documents, laundered money and forged papers.

Also arrested: Donald Lee, 55, of Deerfield Beach; Stephnine Jean, 28, of Hialeah; Judith Clemow, 48, of Miami; Lise Bessette, 56, of Deerfield Beach; Brandi Brown, 26, of Miramar; Wesley Grant, 46, of Miramar; Wonder Ragin Knowles, 52, of Coconut Creek; Magaly Rosa, 42, of Miami, and Ofelia Torres, 51, Hialeah Gardens.

Authorities still are looking for Cupid; Hasanati; Daisy Rubio, 54, of Miami; Eileen Andy Hill, 60, of Plantation, and Fitzroy Clarke, 49, of Brooklyn, N.Y.

By TIM CHAPMAN & JENNIFER LEBOVICH - Miami Herald

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office; Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service; J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulations; Amos Rojas, Jr., Special Agent in charge, Florida Department of Law Enforcement; and Alex Sink, Chief Financial Officer, State of Florida’s Office of Financial Services, announce fraud charges against a defendant Marie Decosta Quintana, 40, of North Miami, Florida, as a result of an investigation led by the Palm Beach County Mortgage Fraud Task Force. The defendant was arrested Tuesday, June 29, 2010, and made her initial appearance in West Palm Beach this morning.

The two-count indictment charges defendant Quintana with making false statements on loan applications to Bank of America and National City Bank, to purchase property in the Versailles Development at 10475 Trianon Place, Lake Worth, Florida, in 2007. According to the indictment, Quintana lied about her employment, income, assets and intention to live in the house to persuade the banks to provide money through two separate mortgages to buy the home. Quintana was recruited to be the straw purchaser of the home and received payment for allowing the use of her name, credit score and for signing documents containing false information. The fraud scheme resulted in more than $1.1 million in losses to two banks.

The charges announced today are the result of the investigative efforts of the multi-agency Palm Beach Mortgage Fraud Strike Force. Mr. Ferrer commended the investigative efforts of the FBI, the State of Florida’s Office of Financial Regulation, the U.S. Postal Inspection Service, FDLE and Florida’s Office of Financial Services. The case is being prosecuted by Assistant U.S. Attorney Ellen Cohen.

An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Amos Rojas, Special Agent in Charge, Florida Department of Law Enforcement; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office; Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service; and J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulation, announced today that an Indictment was unsealed at the Fort Lauderdale Federal Courthouse against:

* Joseph Guaracino, 32, Plantation, Florida
* Steven Stoll, 43, Fort Lauderdale, Florida
* Stephen Orchard, 34, Boca Raton, Florida
* Matthew Gulla, 35, Davie, Florida
* Rene Rodriguez, Jr., 37, Plantation, Florida
* Dennis Guaracino, Jr., 34, Plantation, Florida
* Jacqueline Trumbore, 39, Margate, Florida
* John Velez, 37, Plantation, Florida
* Daryl Radziwon, 39, Plantation, Florida
* Casey Mittauer, 37, Cooper City, Florida
* Joseph DeRosa, 35, Coral Springs, Florida
* Robert DePriest, 41, Plantation, Florida
* Joseph LaGrasta, 31, Tamarac, Florida

The Indictment charges the defendants with one count of conspiracy, in violation of Title 18, United States Code, Section 1349; 11 counts of mail fraud, in violation of Title 18, United States Code, Section 1341; 13 counts of wire fraud, in violation of Title 18, United States Code, Section 1343; and eight counts of making a false statement to a government agency, in violation of Title 18, United States Code, Section 1001. Two defendants are charged with obstructing justice, in violation of Title 18, United States Code, Section 1512. Not all defendants are charged in all counts. The conspiracy, mail fraud, wire fraud, and obstruction of justice counts each carry a maximum penalty of up to 20 years’ imprisonment. The false statement counts each carry a maximum penalty of five years’ imprisonment.

According to the Indictment, the defendants engaged in a scheme to enrich themselves by fraudulently causing real property in Broward and Palm Beach Counties to be bought and sold by submitting, and causing to be submitted, false and fraudulent documents to mortgage lenders in order to obtain the loans. The title attorneys falsely represented to the mortgage lenders the source of the deposits/down payments and/or the cash from borrowers needed to close the transactions. The total dollar amount of the loans secured under the scheme was in excess of $16,000,000 dollars.

More specifically, at times relevant to the Indictment, Joseph Guaracino would locate properties to be purchased and negotiated sale contracts along with co-defendants. In order to qualify for mortgage loans, Guaracino and others caused false information to be submitted to lenders, including forged lease agreements, false bank account balances, and inflated income or salary levels. Dennis Guaracino, Jr., Jacqueline Trumbore, John Velez, Daryl Radziwon, Casey Mittauer, Joseph DeRosa, Robert DePriest, and Joseph Lagrasta were investors in the fraudulent real estate investment scheme, who along with others, purchased the properties that Guaracino controlled.

Steven Stoll, a licensed mortgage broker and a licensed attorney, and Stephen Orchard, also a licensed attorney, participated in the scheme by handling the closings of the fraudulently procured loans, along with licensed mortgage brokers Matthew Gulla and Rene Rodriguez, Jr.

U.S. Attorney Wifredo Ferrer stated, “This indictment charges a group of individuals who conspired to enrich themselves by committing mortgage fraud. It includes a number of professionals who betrayed their profession for greed, and in the process, undermined the integrity of the mortgage marketplace on which we all rely. Our office is determined to continue to bring to justice those who engage in such pervasive criminal schemes.”

Special Agent in Charge John V. Gillies of the FBI Miami Division stated, “The FBI will continue to work with our law enforcement partners to investigate allegations of fraud.”

“Once again, a complex mortgage fraud scheme in South Florida has resulted in additional arrests on serious charges,” said Amos Rojas, Jr., Special Agent in Charge of the Florida Department of Law Enforcement’s Miami Regional Operations Center. “Those accused of mortgage fraud—no matter what their role—have left a path of destruction with far too many victims in South Florida, and we will continue to aggressively target, arrest and prosecute those involved in this crime. Justice will be served.”

Commissioner Tom Cardwell of the Florida Office of Financial Regulation stated, “This is an example of how unlawful practices have blemished the mortgage industry and caused damage to Florida’s economy. The Office of Financial Regulation is implementing new rules and regulations regarding qualifications and enforcement that we believe will help protect consumers and create a more sound and stable industry for the benefit of our citizens and economy.”

Mr. Ferrer commended the investigators for their hard work and dedication in this long term investigation by the Florida Department of Law Enforcement, Federal Bureau of Investigation, U.S. Postal Inspection Service, and State of Florida’s Office of Financial Regulation. This case is being prosecuted by Assistant U.S. Attorneys Laurie E. Rucoba, Jeffrey Kay and Michael Patrick Sullivan.

An Indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, and J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulation, announced that defendants Monique Mitchell, 29, of Pembroke Pines, and Sheldon Martin, 34, of Plantation, pled guilty this morning in West Palm Beach federal court to one count of making false statements on a HUD-1 Real Estate Settlement Form in connection with a mortgage fraud scheme. Sentencing has been scheduled for July 21, 2010 before U.S. District Judge Donald Middlebrooks.

According to records filed with the court and statements made during the plea hearing, defendant Monique Mitchell was employed by Attorneys Title Center, in Pembroke Pines. Defendant Sheldon Martin was a self-employed licensed mortgage broker in Plantation. At the plea, Mitchell and Martin admitted that they knowingly prepared a false HUD-1 Settlement Statement Form in connection with the January 2008 sale of a $1,250,000 home in Fort Lauderdale. The HUD-1 Form included false information to Regions Bank, the lender, about the down payment, the cash on hand at closing, and the amount repaid to the previous lender. In addition, the defendants concealed from Regions Bank money paid to The Pines Law Center at the closing.

At sentencing, the defendants face a maximum statutory sentence of up to five years in prison. Co-defendant, attorney Michael Samuda, is scheduled for trial in June 2010.

“This is a wake-up call to those in the mortgage industry who think they can get away with mortgage fraud,” said Special Agent in Charge John V. Gillies of the FBI’s Miami Division. “Submitting false information on loan documents is a crime and the FBI and its partners will investigate and prosecute those that break the law.”

Mr. Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, FBI, and State of Florida’s Office of Financial Regulation. This case is being prosecuted by Assistant U.S. Attorney Jeffrey Kay.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (“FBI”), Miami Field Office, Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, Michael K. Fithen, Special Agent in Charge, U.S. Secret Service, and James K. Loftus, Director, Miami-Dade Police Department, announced today the unsealing of an indictment charging Gelasio Alberto Diaz, 63, of Miami, Claudia Glaser, 41, of North Bay Village, Nereida Ramos, 45, of Miami, Antonio Pinto, 39, of Miami Beach, Emilia Fortes, 63, of West Palm Beach, Pura Machado Aguila, 40, of Miami, and Carlos Orellana, 45, of Miami Gardens, with one count of conspiracy to commit wire and bank fraud, in violation of Title 18, United States Code, Section 1349, and ten counts of substantive wire fraud, in violation of Title 18, United States Code, Section 1343. The defendants are alleged to have engaged in a mortgage fraud scheme that defrauded three financial institutions of approximately $5 million in fraudulent loans.

According to the indictment, defendants Gelasio Alberto Diaz and Nereida Ramos were employed at in Miami, Florida. According to the indictment, the defendants were involved in the fraudulent financing of mortgages for at least eight residential properties in Miami-Dade County. More specifically, Diaz and Ramos would allegedly identify properties that could be used to defraud lenders and then recruited individuals to pose as purchasers of the properties. Throughout the duration of the conspiracy, Diaz used co-defendant Claudia Glaser’s mortgage brokerage license to operate Infinity Mortgage. During this time, defendant Claudia Glaser signed-off on the mortgage loans without performing the necessary verifications. As well, defendant Nereida Ramos acted as the main loan processor for Infinity Mortgage, and was the main contact for the financial institutions and the borrowers.

Among the individuals who were recruited as straw purchasers were co-defendants Antonio Pinto, an employee at Infinity Mortgage, Emilia Fortes, Pura Machado Aguila and Carlos Orellana. Once a property was purchased, Diaz and Ramos would make the mortgage payments until the property could be flipped at an inflated price. The defendants used the profits made from “flipping” the properties to other straw purchasers to buy additional properties and make payments on the mortgages. Eventually, the defendants stopped making the loan payments and the properties went into foreclosure, resulting in significant losses to Countrywide Home Loans, Fremont Investment & Loan, WMC Mortgage and other lenders.

Special Agent in Charge John V. Gillies stated, “The FBI views mortgage fraud as a significant crime problem. The mortgage lending and housing market have a considerable overall effect on the nation’s economy and combating mortgage fraud will remain a top priority for the FBI.”

If convicted, the defendants face a maximum statutory sentence of 20 years in prison on each count of conspiracy and substantive wire fraud.

Mr. Ferrer commended the efforts of the FBI, the U.S. Postal Service, the U.S. Secret Service and the Miami-Dade Police Department. This case is being prosecuted by Assistant U.S. Attorney Cristina Pérez Soto.

An indictment is only an accusation, and the defendants are presumed innocent unless and until proven guilty.

ORLANDO, FL—United States Attorney A. Brian Albritton announces that U.S. District Judge Anne C. Conway today sentenced Ramon Cendana (age 48, of Orlando) to more than six years in federal prison for his role in a mortgage fraud scheme. The court also ordered Cendana to pay in excess of $240,000 in restitution to his victims. Cendana had pleaded guilty on January 27, 2010.

According to court documents, Cendana owned and operated a title company, a mortgage company, and two investment companies. Through those companies, Cendana operated a Ponzi-type scheme soliciting investors (who were often refinancing their own homes to obtain investment proceeds), promising high rates of return on their investments, and then paying early investors with the investments of later investors. The proposed investments, however, never generated any revenue. When investor funds ran low, Cendana used the identification information of his investors to apply fraudulently for loans and lines of credit in the names of those investors. Further, near the end of his scheme, as both investor funds and the proceeds from the fraudulently-obtained loans and lines of credit ran low, Cendana used his mortgage and title companies to create fictitious mortgage closings, directing the customers who trusted him to refinance their homes to wire him funds to facilitate closings that never occurred.

The court sentenced the defendant based upon over $1.7 million in fraud loss.

This case was investigated by the United States Secret Service, the United States Postal Inspection Service, and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Daniel C. Irick.

This case is part of the Middle District of Florida’s Mortgage Fraud Surge, a joint effort by the U.S. Attorney’s Office for the Middle District of Florida, the investigative agencies named above, and numerous other federal, state, and local law enforcement agencies. The surge focused intensive investigative and prosecutorial resources on the mortgage fraud crisis that plagues middle Florida and has contributed to the current economic situation nationwide. The surge accelerated mortgage fraud cases to bring perpetrators to justice quickly and provide maximum deterrence. It was the first step in the Middle District of Florida’s Mortgage Fraud Initiative, an ongoing effort to prosecute mortgage fraud of all types throughout the district. For more information on the Middle District of Florida’s mortgage fraud prosecutions, please contact Steve Cole, Public Affairs Officer for the United States Attorney’s Office.

Jeffrey H. Sloman, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office; Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service; and J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulation, announced the unsealing of an indictment against defendants Michael Samuda, 37, of Pembroke Pines and Weston, Monique Mitchell, 29, of Pembroke Pines, Florida, and Sheldon Martin, 34, of Plantation. Both Mitchell and Martin appeared at the Federal Courthouse in West Palm Beach this morning before U.S. Magistrate Judge Linnea Johnson. Samuda is scheduled to appear on April 21, 2010.

Michael Samuda, an attorney, was charged in one count of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 371, one count of substantive mail fraud, in violation of Title 18, United States Code, Section 1341, four counts of substantive wire fraud, in violation of Title 18, United States Code, Section 1343. and one count of making false statements on a HUD-1 Form, in violation of Title 18, United States Code, Section 1001. If convicted, Samuda faces a maximum statutory sentence of five years in prison on each of the conspiracy and the false statement counts, up to 30 years on each count of mail fraud and wire fraud count, and up to five years in prison on the false statement count. Defendants Monique Mitchell and Sheldon Martin, a mortgage broker, are charged with one count of making false statements on a HUD-1 Form, in violation of Title 18, United States Code, Section 1001, and face up to five years in prison on that count.

According to the indictment, Samuda operated a title escrow company called Attorney Title Center, in Pembroke Pines. In January 2008, Samuda’s company closed on the purchase of real estate at 4010 Bayview Drive in Fort Lauderdale. The indictment alleges that Samuda, along with his employee Mitchell and the seller Sheldon Martin engaged in a scheme to defraud Regions Bank, the mortgage lender, by preparing and submitting false closing documents, including a HUD-1 Settlement Statement Form on the $1,250,000 property sale.

Special Agent in Charge John V. Gillies stated, “The FBI views mortgage fraud as a significant crime problem. The mortgage lending and housing market have a considerable overall effect on the nation’s economy and combating mortgage fraud will remain a top priority for the FBI.”

Mr. Sloman commended the investigative efforts of the Federal Bureau of Investigation, the State of Florida’s Office of Financial Regulation, and the U.S. Postal Inspection Service. This case is being prosecuted by Assistant U.S. Attorney Jeffrey Kay.

An indictment is merely an accusation and a defendant is presumed innocent unless and until proven.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.

Federal officials have charged 13 individuals in an alleged elaborate $16.9 million mortgage fraud scheme targeting sales of luxury condominium units in downtown Miami and single-family homes in Coral Gables, according to an unsealed superseding indictment.

According to court documents, the fraud ring – which included a real estate broker and a Wells Fargo Bank loan officer – recruited “straw” buyers to make fraudulent loan applications to Wells Fargo, inflating their salary and deposit figures so they could qualify for loans in excess of $1 million. At closing, those charged then diverted millions by skimming the difference between the inflated purchase price and what actually was paid to the seller, officials said.

The straw buyers ultimately defaulted on the loans, sending the properties into foreclosure and costing Wells Fargo $9.7 million, federal officials said. The case is being prosecuted by the U.S. Attorney’s Office in the Southern District of Florida.

Those charged include: Greta Medina, Ricardo Estrada, Dania Arguelles, Fernanda Abrea, Obed Hernandez, Martin Mere, Nestor Collantes, Alfonso Velasco, Adan Vasquez, Yohamel Caballero, Ana Aviles, Leismy Barcia and Christina Roberts. Real estate broker Margaret Roberts, who negotiated the sales, pleaded guilty earlier.

Jeffrey H. Sloman, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office; Daniel W. Auer, Special Agent in Charge, Internal Revenue Service, Criminal Investigation; Miguel A. Exposito, Chief, City of Miami Police Department; and James K. Loftus, Director, Miami-Dade Police Department, announced the sentencing of defendants Garry Souffrant, 33, a licensed real estate broker in the State of Florida, and Yvonne Souffrant, 33, husband and wife, both of Davie, FL. Today, U.S. District Court Judge Paul C. Huck sentenced the defendants to 240 months and 54 months in prison, respectively.

In November 2009, Garry Souffrant was convicted after a five-week jury trial of 46 counts, including conspiracy to commit mortgage fraud, conspiracy to commit drug money laundering, mail fraud, making false statements to mortgage lenders, bank fraud, bank theft, and receipt of stolen bank funds. At the same trial, Yvonne Souffrant was convicted of count of fraud conspiracy and one count of making a false statement to mortgage lenders.

According to the Indictment and evidence presented during the trial, from 2002 to 2008, defendants Garry and Yvonne Souffrant used their family business, called Progressive Real Estate of Broward, Inc., to launder millions of dollars in drug proceeds through an extensive mortgage fraud scheme. The defendants assisted drug traffickers in purchasing homes and luxury automobiles, including a 2004 Rolls Royce Phantom. To execute the scheme, the defendants arranged for and/or acted as straw buyers on behalf of the drug traffickers. This allowed the traffickers to use their drug proceeds to purchase homes and lease automobiles, while concealing the source of the income. The defendants also diverted several million dollars of mortgage loan proceeds to continue to fund the scheme and for their personal use.

This investigation and prosecution was the culmination of a five-year Organized Crime Drug Enforcement Task Force (OCDETF) Operation, named Operation KOMPA, which focused on drug trafficking and violent crimes in north Miami-Dade County. As part of this Operation, numerous individuals were prosecuted, convicted, and sentenced to lengthy prison terms (Case No. 07-20577-CR-Huck). Among those prosecuted and sentenced were Ali Adam and Graylin Kelly. In March 2008, Adam and Kelly were both sentenced to 360 months’ imprisonment, after having pled guilty to drug conspiracy and money laundering conspiracy charges for their participation in a scheme to launder millions of dollars of drug proceeds through the purchase of real estate and luxury automobiles. The Souffrants were involved in this aspect of the conspiracy.

U.S. Attorney Jeffrey H. Sloman stated, “These defendants engaged in mortgage fraud as a means to launder drug proceeds. We will continue to use our expertise in financial cases to deprive drug dealers of their ill-gotten gains.”

“As we’ve seen in this case, drug trafficking organizations routinely commit so called white collar crimes such as mortgage fraud and bank fraud to launder their proceeds, said FBI Special Agent in Charge John V. Gillies.“These types of crimes should not be taken lightly given that they fuel violent, criminal activity. We will continue to work with our partners to disrupt and dismantle drug trafficking organizations.”

IRS Special Agent in Charge Daniel W. Auer stated, “These defendants used what appeared to be a legitimate real estate company as a method to launder the proceeds of illegal narcotics activities and to defraud financial institutions and mortgage lenders. In this case, IRS Special Agents were able to follow the money, track and document the flow of funds, and prove that the defendants laundered millions of dollars through an extensive mortgage fraud scheme.”

A Florida man convicted in Collin County of scamming thousands of dollars from McKinney homeowners is now facing a federal indictment.

John Barry, the owner and operated of the TKI Group and JAB Consulting in Winter Garden, Fla. is one of 32 defendants named in an indictment in the U.S. Eastern District of Texas court that includes 16 counts of mail and wire fraud and money laundering. 366th District Judge Greg Brewer handed down a 25-year sentence to Barry last year on a first-degree felony charge of money laundering for his role in a mortgage fraud scheme involving homes in the Stonebridge subdivision.

Barry is accused of using 10 homes on Hills Creek Drive sometime before December 2006 to dupe homeowners into paying more than the home’s actual worth. Investigators believe he would purchase the property near the actual market value and use fraudulent appraisals to sell the home at an inflated price.

He would obtain the fraudulent prices from home appraisers who investigators believe were also in on the scam. Elizabeth Tava Altizer and Pamela Sue Ford have each been indicted for their alleged role in Barry’s deals.

They each received a first-degree felony indictment of using false statements to obtain property/credit last May, according to Collin County court records.

Once Barry had an interested buyer willing to give them the money for the false price, he would take the money under the agreement he would use the proceeds to repair the property and perform upkeep on the home.

Federal investigators also believed at the time that Barry has committed similar home scams across the city and the state that involve at least 50 other homes, but could not confirm or deny the existence of any additional investigations.

The new indictment consists of the same scam but on a statewide scale. The indictment identifies 114 homes located in Allen, Arlington, Cedar Hill, Coppell, Corinth, Cypress, Dallas, Flower Mound, Fort Worth, Frisco, Granbury, Heath, Highland Village, Houston, Keller, Lantana, Lewisville, Little Elm, Lubbock, Magnolia, McKinney, Plano, Roanoke, Southlake, Spring, The Woodlands, and Willis.

Barry again stands accused of defrauding lending institutions by convincing them to approve loans for mortgages for homes with inflated property values, according to the indictment.

If Barry and his fellow defendants are convicted of the federal charges, he could face up to two 20 year terms in a federal prison for the conspiracy and mail fraud charges and a possible additional 10 years for each money laundering charge.

U.S. Attorney John Bales said he hopes Barry’s case will prevent other mortgage and financial scams from increasing in scope.

“This indictment brings to light a criminal scheme that is quite breathtaking in its scope and beyond disturbing as far as the boldness of the fraud,” Bales said in a released statement. “The agents have done a remarkable job putting together this investigation and we look forward to presenting all of the evidence in court. Hopefully, others involved in mortgage fraud will be taking notice – we will be relentless in discovering, exposing and holding accountable those who have committed similar crimes.”