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.

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.

PHOENIX—Dustin Thompson, 32, of Phoenix, was sentenced on Monday to 27 months in prison for his involvement in a $4 million mortgage fraud scheme. Thompson pleaded guilty to one count of conspiracy to commit wire fraud, a felony, related to his participation in a two-year conspiracy involving the purchase of 24 properties in Phoenix using fraudulent loan documents. One other co-conspirator was also charged and has pleaded guilty.

“Driven by greed, this defendant schemed the system and engaged in the type of mortgage fraud that has destroyed property values, lending institutions, and entire neighborhoods in our community,” said U.S. Attorney Dennis K. Burke. “This office, along with our partners in the FBI and IRS, is committed to prosecuting those who engage in mortgage fraud and putting them in prison.”

The case against Thompson was based on an investigation by the Internal Revenue Service and Federal Bureau of Investigation. Investigators discovered that from 2005 through June of 2007 Thompson conspired to commit mortgage fraud by submitting fraudulent mortgage loan applications on behalf of straw buyers, under false pretenses. He obtained and disbursed the proceeds of the fraudulently obtained loans, including directing $1.2 million of the proceeds to a bank account under his control. Thompson used the proceeds from the fraud for personal expenses and to finance other “get rich” schemes. Thompson received a reduced sentence due to his early guilty plea and cooperation. The entire conspiracy resulted in a loss to lending institutions of approximately $4 million.

The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution is being handled by Kevin M. Rapp, Assistant U.S. Attorney, District of Arizona, Phoenix.

Earlier today in federal court in Minneapolis, a former loan officer for Wells Fargo Bank pleaded guilty to participating in a $4.3 million mortgage fraud scheme. Larry Gene Hillard, age 56, of Maple Grove, pleaded guilty to one count of conspiracy to commit wire fraud. Hillard, who was charged on March 10, 2011, entered his plea before United States District Court Judge Ann D. Montgomery.

In his plea agreement, Hillard admitted that between 2007 and August 21, 2008, he participated in 12 fraudulent transactions with Truang Quang Tran and Thanh Van Ngo, owners of Invescorp. Hillard admitted that in his capacity as a loan officer, he received from Tran and Ngo personal information regarding several people for the purpose of running run credit reports on them. He then gave those reports to Tran and Ngo. He subsequently received a loan application in the name of one of the individuals who had a good credit score. In addition, he provided Tran and Ngo with specific information about the assets and income required to qualify for a particular loan. Then, a short time later, he received loan applications that contained the information he previously provided. Hillard also admittedly completed fraudulent loan applications. The loan amounts for the 12 properties involved in this fraud scheme totaled more than $4.3 million. The loss amount was more than $1.4 million.

For his crime, Hillard faces a potential maximum penalty of five years in prison. Judge Montgomery will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Christian S. Wilton.

Tran was earlier sentenced to 24 months in federal prison for his role in the scheme. On April 20, 2011, Ngo was sentenced to 12 months and one day in prison. Three co-defendants also have been sentenced.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

MADISON, WI—Stephen P. Sinnott, United States Attorney for the Western District of Wisconsin, announced the filing of informations charging five individuals with submitting false loan applications to banks and mortgage lenders to obtain home mortgages. Specifically, the informations charged:
1. Brian Bowling, 44, of Sun Prairie, Wisconsin, with wire fraud;
2. Jason Khodadad, 29, of Madison, Wisconsin, with conspiracy to submit a false loan application;
3. Joseph Bowman, 59, of Black Earth, Wisconsin, with conspiracy to submit a false loan application;
4. Joshua Hughes, 28, of Madison, with conspiracy to submit a false loan application; and
5. Richard Hurkman, 62, of Oshkosh, Wisconsin, with conspiracy to submit a false loan application.
If convicted of wire fraud, Bowling faces a maximum penalty of 30 years in prison. If convicted of conspiracy to submit a false loan application, Khodadad, Bowman, Hughes, and Hurkman each face five years in prison.
The informations charged that the defendants defrauded banks and mortgage lenders by submitting loan applications for home loans that, among other things, inflated the borrowers’ income amounts, exaggerated assets and understated liabilities, falsified employment information, misrepresented the source of downpayment funds, and omitted secondary financing information.
Hughes and Bowman pleaded guilty on Wednesday May 19, 2010, in U.S. District Court in Madison before Judge Barbara Crabb. Sentencing for Bowman is scheduled for July 22, 2010, at 1:20 p.m. Sentencing for Hughes is set for July 29, 2010, at 1:20 p.m.
Khodadad is scheduled to plead guilty on Tuesday May 25, 2010, at 1:40 p.m. Bowling is scheduled to plead guilty on Friday May 28, 2010, at 1:20 p.m. Hurkman’s plea hearing has not yet been set.
These cases are part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The charges are the result of an investigation conducted by the Madison office of the Federal Bureau of Investigation. The prosecution of this case has been assigned to members of the Financial Fraud Enforcement Task Force in the U.S. Attorney’s Office in Madison.

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.

Defendant Apprehended on a Shrimp Boat in Caribbean Sea

DALLAS—James Ragnauth, a defendant charged in a mortgage fraud case, who was on the lam for about six weeks and apprehended on a shrimp boat in the Caribbean Sea by the U.S. Coast Guard in March 2009, was sentenced today by U.S. District Judge Sidney Fitzwater to 37 months in federal prison, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Judge Fitzwater also ordered Ragnauth to pay approximately $205,000 in restitution.

Ragnauth pleaded guilty in September 2009 to one count of causing false entries to deceive the U.S. Department of Housing and Urban Development (HUD). According to the indictment, Ragnauth incorporated J.R. Mortgage, located in Dallas, and was in charge of the company’s day-to-day loan operations and supervised several loan officers, including co-defendant Rosa Irene Galvan and Ignacio Juan Jasso, charged in a related case.

Ragnauth admitted in documents filed in court that in 1997 and 1998, he and loan officer Jasso knowingly and willfully made false entries in HUD statements in connection with several residential loans. As part of their scheme to defraud HUD, Ragnauth and Jasso created, and caused others to create and later submit to HUD, several false and fraudulent documents, such as a Uniform Residential Loan Application which contained false information, a fraudulent W-2 form and a fraudulent credit report. At the sentencing hearing today, Ragnauth was found to be the organizer leader of a mortgage fraud scheme that caused the fraudulent funding of 30 residential loans, totaling more than $1.8 million.

Both Galvan and Jasso have pleaded guilty to their roles and are scheduled to be sentenced on February 26, 2010.

While Ragnauth was a fugitive in the Beaumont, Texas area, the U.S. Marshals Service in Beaumont featured Ragnauth’s photo on local newscasts along with information that he might be leaving the U.S. on a boat from Port Arthur, Texas. Ragnauth, a naturalized citizen, was captured by the U.S. Coast Guard when he was attempting to flee to his native Guyana. Guyana is located just east of Venezuela on the northern coast of South America. Ragnauth made it about half way to Guyana, being arrested in international waters between Cuba and Haiti.

The case was investigated by the FBI and HUD-Office of Inspector General. Assistant U.S. Attorney David Jarvis was in charge of the prosecution.

Receives 18 Months in Prison and Ordered to Pay Over $337,000 in Restitution

TYLER, TX—U.S. Attorney John M. Bales announced today that a 47-year-old Tyler, Texas woman has been sentenced to federal prison for a mortgage fraud scheme in the Eastern District of Texas.

TAHMEANE ELROD pleaded guilty on Nov. 4, 2009, to conspiracy to commit wire fraud and was sentenced to 18 months in federal prison on Mar 24, 2010 by U.S. District Judge Michael H. Schneider. Elrod was also ordered to pay restitution in the amount of $337,709.58.

According to information presented in court, in September 2007, Elrod devised a scheme to defraud mortgage financing companies by submitting false documents in order to qualify for mortgages for the purchase of a residential property. Elrod falsely inflated levels of earned income and forged signatures on a Request for Verification of Employment form as part of a loan application package. A federal grand jury returned an indictment on May 6, 2009, charging Elrod with conspiracy to commit wire fraud.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Frank Coan.

NEWARK, NJ—A New Jersey real estate investor was sentenced today to 50 months in prison in connection with a mortgage fraud and property-flipping scheme involving rental properties in Paterson, N.J., U.S. Attorney Paul J. Fishman announced.

Frederick Ugwu, 54, of Upper Saddle River, N.J., was convicted in December 2009 after a five-week jury trial on counts of wire fraud, money laundering, and conspiracy to commit those offenses before U.S. District Judge Jose L. Linares. Judge Linares also imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

Ugwu conspired with several others to sell two- and three-family rental properties to borrowers whose mortgage loans were obtained by fraud. Ugwu acquired distressed rental properties in Paterson cheaply, made basic or minimal repairs to them, and then sold them for several times more than he paid for them just weeks or months earlier. When selling these properties, he signed documents before and at the closings falsely representing that the borrowers had paid him tens of thousands in down payments and at the closings. In fact, the borrowers made no such payments. Ugwu also allowed hundreds of thousands of dollars in proceeds from some of the sales to go to his coconspirators while hiding many of those payments from the mortgage lenders.

In addition to the prison term, Judge Linares sentenced Ugwu to three years of supervised release and ordered him to pay $1,602,958.62 in restitution. Ugwu is also required to forfeit $1,753,212.06 in proceeds of the scheme, plus the contents of three different bank accounts that he used to deposit those proceeds.

Ugwu’s case is part of an ongoing investigation by the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG), the FBI, the U.S. Postal Inspection Service, and IRS-Criminal Investigation into fraudulent Federal Housing Administration-insured and conventional mortgage loans originated by various New Jersey mortgage companies. The investigation has resulted in more than a dozen guilty pleas from current or former New Jersey residents, including:

* Michael Eliasof, a former Paramus, N.J., real estate agent;
* Gerald Carti, a former loan officer and shareholder of U.S. Mortgage Corp.;
* Amer Mir, a former loan officer of United Home Mortgage Co.;
* Norman Barna, who, like Ugwu, sold numerous Paterson properties through the scheme;
* William Ottaviano, an appraiser;
* Renford Davis and Hopeton Bradley (now deceased), who jointly managed many of the Paterson properties involved in the scheme;
* Claribel Morrobel, a recruiter for the scheme; and
* Melanie Gebbia, the former legal assistant of William Colacino (now deceased), a former Garfield attorney and municipal court judge.

Mir was convicted at the 2009 trial for his role in the mortgage fraud scheme; his sentencing is scheduled for April 20, 2011. In addition, Judge Linares recently sentenced Corallo, Eliasof, Carti, and Ottaviano to 51 months, 40 months, 27 months, 15 months, and six months in prison, respectively, for their roles in the scheme, while Barna, Gebbia, and Morrobel each received probation.

U.S. Attorney Fishman credited special agents of HUD-OIG, under the direction of Special Agent in Charge Joseph W. Clarke for the Mid-Atlantic region; special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Postal Inspector In Charge Thomas E. Boyle; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Mark E. Coyne, Chief of the U.S. Attorney’s Office Appeals Division, and Assistant U.S. Attorney Matthew E. Beck of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Defense counsel: Henry E. Klingeman, Esq., Newark, N.J.

Failed Stockbridge Bank Allegedly Fleeced Before Being Seized By Feds

ATLANTA—An indictment unsealed today charges two former top officers of FirstCity Bank of Stockbridge, Georgia—MARK A. CONNER, 44, formerly of Canton, Georgia, and CLAYTON A. COE, 44, of McDonough, Georgia—with a variety of offenses, including conspiracy to commit bank fraud and bank fraud in connection with misconduct at FirstCity Bank in the years before the bank’s seizure by state and federal authorities on March 20, 2009. In addition to the conspiracy and bank fraud charges, the indictment charges CONNER with conducting a continuing financial crimes enterprise at the bank between February 2006 and February 2008, during which CONNER’s and his co-conspirators’ crimes allegedly generated over $5 million in unlawful gross proceeds.

A federal grand jury in Atlanta returned the sealed indictment against CONNER and COE on March 16, 2011. CONNER was arrested on the charges and taken into custody by federal agents at Miami International Airport yesterday morning, the two-year anniversary of FirstCity Bank’s failure, upon his arrival in Miami from the Turks and Caicos Islands in the West Indies. CONNER made his initial appearance today before a federal magistrate judge in Miami, who preliminarily ordered CONNER to be detained as a flight risk pending his transfer by Deputy U.S. Marshals from Miami to Atlanta for trial. A formal detention hearing will take place in Miami on Thursday, March 24, 2011, at 1:30 p.m. COE’s initial appearance on the indictment in the Northern District of Georgia has not yet been scheduled.

United States Attorney Sally Quillian Yates said, “The entire country has felt the deep economic impact of failed banks. At the heart of this indictment is an abuse of power by key insiders, who are charged with tricking their own colleagues into approving millions of dollars in commercial loans to fund the defendants’ own personal business activities, and to enrich themselves at the bank’s expense. Along the way, these defendants also allegedly defrauded state and federal bank regulators and examiners, and at least 10 other federally insured banks in Florida and Georgia that invested in the fraudulent multi-million-dollar loans.”

FDIC Inspector General Jon Rymer said, “The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) is pleased to join the United States Attorney’s Office for the Northern District of Georgia and our law enforcement colleagues in announcing this indictment. We are particularly concerned when former senior bank officials, who have held positions of trust within their institutions, are alleged to have been involved in criminal activity. We will continue to aggressively pursue bank officials and others who victimize financial institutions.”

Neil Barofsky, SIGTARP Special Inspector General for the Troubled Asset Relief Program said, “Today’s indictment marks yet another occasion where bank executives are alleged to have turned to criminal fraud in the midst of the financial crisis, including an attempt to obtain millions of dollars from the American taxpayer through the Troubled Asset Relief Program. SIGTARP will continue to work with our law enforcement partners to bring those who engage in such crimes to justice.”

IRS-Criminal Investigation Special Agent in Charge Reginael McDaniel said of the case, “Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money. Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable.”

According to United States Attorney Yates, the charges, and other information presented in court: CONNER served in a variety of top positions at FirstCity Bank between 2004 and 2009, including as vice-chairman of the board of directors, as a member of the banks’ loan committee, as president, and later as acting chairman and chief executive officer. COE served as a vice-president and as FirstCity Bank’s senior commercial loan officer. While serving in these positions, CONNER, COE, and their co-conspirators allegedly conspired to defraud FirstCity Bank’s loan committee and board of directors into approving multiple multi-million-dollar commercial loans to borrowers who, unbeknownst to FirstCity Bank, were actually purchasing property owned by CONNER or COE personally.

The indictment charges that CONNER, COE, and their co-conspirators misrepresented the essential nature, terms, and underlying purpose of the loans and falsified documents and information presented to the loan committee and the Board of Directors. CONNER, COE, and their co-conspirators then allegedly caused at least 10 other federally insured banks to invest in, or “participate in” the fraudulent loans based on these and other fraudulent misrepresentations, shifting all or part of the risk of default to the other banks. COE’s bonus compensation was tied to the origination of FirstCity Bank loans, including the fraudulent loans with which he and CONNER allegedly assisted each other.

In the process of defrauding FirstCity Bank and the “participating” banks, CONNER, COE, and their co-conspirators allegedly routinely misled federal and state bank regulators and examiners to conceal their unlawful scheme. They also unsuccessfully sought federal government assistance through the U.S. Treasury Department’s Troubled Asset Relief Program (“TARP”) and engaged in other misconduct in an attempt to avoid seizure by regulators and prevent the discovery of their fraud.

The charge against CONNER for conducting a continuing financial crimes enterprise carries a mandatory minimum sentence of 10 years in federal prison, a maximum sentence of life in prison, and a potential fine of up to $10 million. The conspiracy and bank fraud charges against CONNER and COE, and a remaining charge against COE for fraudulently influencing the actions of a federally insured bank, carry a maximum sentence of 30 years in prison and a potential fine of up to $1 million on each count. In determining the actual sentences for each defendant, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being investigated by special agents of the FDIC, Office of Inspector General; the Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”), the Federal Bureau of Investigation, and Internal Revenue Service-Criminal Investigation.

Assistant United States Attorneys Douglas W. Gilfillan and David M. Chaiken are prosecuting the case.

For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.

SPRINGFIELD, IL—A Springfield, Illinois real estate agent, Darlene M. Adkins, 65, today entered pleas of guilty to concealing assets in a bankruptcy proceeding and making a false statement to a bank, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois. Sentencing is scheduled for July 18, 2011.

In court documents and during today’s hearing before U.S. Magistrate Judge Byron G. Cudmore, Adkins, of the 1700 block of Iles Ave., admitted that on May 15, 2006, she submitted false income information on a loan application to a local bank to increase her home equity line of credit. To influence the bank to approve a $40,000 loan extension, Adkins falsely stated that her gross monthly wages, salary, and commissions were $7,000, when Adkins had no income for February, March, April, or May of 2006, and her total income to date for 2006 was $1,610. In a Chapter 7 Bankruptcy Petition, filed on May 10, 2006, five days prior to the loan application, Adkins stated that her income to date was $1,610. Adkins further admitted that when she filed the Chapter 7 Bankruptcy Petition, she concealed her receipt of $166,884.51, the amount paid by an insurance company to replace the contents of her house which were damaged by fire in June 2005.

The charges resulted from a referral by the U.S. Trustee for Indiana and Central and Southern Illinois (Region 10) and an investigation by the Federal Bureau of Investigation in coordination with the Central Illinois Bankruptcy Fraud Working Group. The Bankruptcy Fraud Working Group includes representatives of the U.S. Attorney’s Office for the Central District of Illinois, U.S. Trustee’s Office for Region 10, Federal Bureau of Investigation, Secret Service, U.S. Postal Inspection Service, the Criminal Investigation Division of the Internal Revenue Service, the Department of Health and Human Services, and the Department of Housing and Urban Development. Assistant U.S. Attorney Gregory K. Harris is prosecuting the case.

The statutory penalty for making a false statement on a loan application is up to 30 years in prison and fines up to $1,000,000; for concealing assets, the maximum statutory penalty is five years in prison and fines of up to $250,000. Final sentences are determined by the court. In imposing sentence, the court may consider federal sentencing guidelines, which include a defendant’s criminal history, the amount of loss, and other applicable factors.

The U.S. 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. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Ind., and Peoria, Ill.

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.

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today that United States District Judge William B. Shubb sentenced Iftikhar Ahmad, 40, of Stockton, to 21 months in prison, to be followed by three years of supervised release, and restitution in the amount of $382,750 for multiple counts of mail fraud relating to a scheme involving the fraudulent submission of mortgage loan applications. Ahmad pleaded guilty on April 28, 2008.

This case was the product of a joint investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Laurel Lomis Rimon prosecuted the case.

Ahmad admitted that through his company I&R Investment Properties LLC, he bought and sold numerous properties that were funded with loan proceeds fraudulently obtained from Long Beach Mortgage Company. Specifically, Ahmad secretly provided down payments to many of the buyers of the homes he was selling and aided the buyers in submitting loan applications that he knew contained false information about their income and employment. He also inflated the sales price of the properties.

Other participants in this mortgage fraud scheme have already pleaded guilty and been sentenced. John Ngo, a loan processor with Long Beach Mortgage Company, pleaded guilty on December 17, 2007 to perjury and was sentenced to nine months in prison. William Bridge, a loan broker operating The Loan Center in San Francisco, pleaded guilty on June 16, 2008 to tax charges and was sentenced to 21 months in prison, and Paul Bridge, also a loan broker at The Loan Center, pleaded guilty on June 16, 2008 to paying kickbacks and was sentenced to three years of probation.

Joel Blanford, a former account executive at Long Beach Mortgage, is charged in this investigation with mail fraud in connection with the submission of fraudulent loan applications and is awaiting trial.

U.S. Attorney Wagner stated, “This case revealed a chain of fraud running from home buyers through loan brokers and an employee of the mortgage lender. This office will continue to work with our law enforcement partners to investigate and prosecute those industry insiders who manipulated the mortgage loan process for their own financial gain.”

This law enforcement action is part of the work being done by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. One component of the FFETF is the national Mortgage Fraud Working Group, co-chaired by U.S. Attorney Wagner, which is tasked with combating mortgage fraud schemes. For more information on the task force, visit StopFraud.gov.

Melody C. Redondo, 32, and Paul G. Redondo, 33, both of Meridian, Idaho, entered guilty pleas today in U.S. District Court in Boise, U.S. Attorney Wendy J. Olson announced. Melody Redondo pleaded guilty to making a false statement to a financial institution, a felony. Paul Redondo pleaded guilty to misdemeanor theft from a financial institution.

Melody Redondo admitted that in July 2007, she submitted a false application to obtain financing from Washington Mutual Bank on a $200,000 loan. Redondo represented on the loan application that she had monthly gross income of $13,000; however, her total income in 2007 was substantially less. Redondo submitted the loan application to Washington Mutual Bank to obtain a home equity line of credit. The bank relied upon the loan application, which contained the defendant’s materially false statement, and authorized funding of the loan. The charge of making a false statement to a financial institution is punishable by a term of imprisonment of 30 years, a term of supervised release of up to five years, and a maximum fine of $1 million.

Paul Redondo admitted that in August 2007, he submitted a consumer loan application to obtain financing on a $100,000 home equity line of credit on a home in Eagle, Idaho. He also admitted to falsely represented his monthly gross income on the loan application that was submitted to Washington Trust Bank. Misdemeanor theft from a financial institution carries a maximum punishment of one year in prison, a $100,000 fine, and a term of supervised release of not more than one year.

Sentencing for Melody Redondo is scheduled for May 3, 2011, before Chief U.S. District Judge B. Lynn Winmill in Boise. Sentencing for Paul Redondo is scheduled for May 4, 2011, before U.S. Magistrate Judge Ronald E. Bush.

The case is part of the ongoing Crestwood mortgage fraud case, which involved multiple defendants who bought and sold real estate in order to “flip” it, or gain profits from the sales. The financial institutions and mortgage lenders incurred losses of approximately $1.6 million dollars.

To date, eight other people have been sentenced or pleaded guilty in the case: Michael J. Hymas, formerly of Boise, was sentenced to 21 months in federal prison for wire fraud and ordered to pay $544,647 in restitution; Shauntee K. Ferguson, of Boise, was sentenced to probation for five years, 80 hours of community service, and ordered to pay $365,829.69 in restitution for making a false statement to a financial institution; Christopher R. Georgeson, formerly of Boise, currently of Phoenix, Arizona, was sentenced to one month in federal prison for wire fraud and ordered to pay $103,356.64 in restitution; Stanley J. Ferguson, of Boise, was sentenced to 12 months plus one day in federal prison and ordered to pay $676,826 in restitution; and Brent Bethers, of Eagle, Idaho, was sentenced to one month in federal prison for wire fraud, ordered to pay $23,913 in restitution, and fined $6,000.

Travis Hymas, formerly of the Boise area, currently of Cedar Hills, Utah, pleaded guilty to false statement to a bank in March 2010. Shane Hymas and Laurie Krechelle Hymas, both formerly of the Boise area, currently of American Fork, Utah, pleaded guilty to bank fraud in April 2010. Sentencings for all three have been rescheduled to April 11, 2011, in Boise before U.S. District Judge Edward J. Lodge. Each faces a maximum sentence of 30 years in federal prison, a fine of up to $1 million, and supervised release of up to five years.

“Homeowners, the economy and financial institutions all suffer from fraudulent housing transactions,” said Olson. “The Crestwood mortgage fraud cases demonstrate federal and state law enforcement agencies’ commitment to aggressively investigate and prosecute fraud in the housing finance industry.”

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

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; and J. Thomas Cardwell, Commissioner, State of Florida Office of Financial Regulation, announced that defendant Anson Joachin, 39, of Parkland, Florida, was sentenced today to 41 months’ imprisonment, to be followed by three years of supervised release for his role in a multi-million-dollar mortgage fraud scheme. In addition, U.S. District Judge Ursula Ungaro ordered Joachin to pay $2,352,310 in restitution.

Four other defendants were previously sentenced in the case. John Fisher, 35, of Jupiter, Florida, a licensed mortgage broker, was sentenced to 20 months’ imprisonment and was ordered to pay $1,614,927 in restitution. In addition, Fisher agreed to surrender his mortgage broker license. Tracey Balli, 35, of Pembroke Pines, Florida, a loan processor, was sentenced to three years’ probation, one year of home detention, and was ordered to pay $1,187,082 in restitution; Justina Bryan, 35, of Hollywood, Florida, a loan processor, was sentenced to three years’ probation, one year of home detention, and was ordered to pay $1,165,227 in restitution; and Delano McLennon, 33, of North Lauderdale, Florida, a straw buyer, who was sentenced to three years’ probation, six months home detention, and was ordered to pay $489,405 in restitution.

Defendants Anson Joachin and John Fisher previously pled guilty to conspiracy to commit mail and wire fraud and to one count of mail fraud, respectively, in violation of Title 18, United States Code, Sections 1349 and 1341 in connection with a mortgage fraud scheme. Defendants Tracey Balli, Justina Bryan, and Delano McLennon previously pled guilty to one count of making false statements on a HUD-1 Real Estate Settlement Form in connection with a mortgage fraud scheme, in violation of Title 18, United States Code, Section 1001.

According to records filed with the court and statements made during court hearings, the defendants and other conspirators engaged in a scheme to enrich themselves by fraudulently causing houses 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. Defendant Anson Joachin 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 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 $2,350,000 in loans to the defendants and their co-conspirators.

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

DALLAS—James Ragnauth, a defendant charged in a mortgage fraud case, who was on the lam for about six weeks and apprehended on a shrimp boat in the Caribbean Sea by the U.S. Coast Guard in March 2009, was sentenced today by U.S. District Judge Sidney Fitzwater to 37 months in federal prison, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Judge Fitzwater also ordered Ragnauth to pay approximately $205,000 in restitution.

Ragnauth pleaded guilty in September 2009 to one count of causing false entries to deceive the U.S. Department of Housing and Urban Development (HUD). According to the indictment, Ragnauth incorporated J.R. Mortgage, located in Dallas, and was in charge of the company’s day-to-day loan operations and supervised several loan officers, including co-defendant Rosa Irene Galvan and Ignacio Juan Jasso, charged in a related case.

Ragnauth admitted in documents filed in court that in 1997 and 1998, he and loan officer Jasso knowingly and willfully made false entries in HUD statements in connection with several residential loans. As part of their scheme to defraud HUD, Ragnauth and Jasso created, and caused others to create and later submit to HUD, several false and fraudulent documents, such as a Uniform Residential Loan Application which contained false information, a fraudulent W-2 form and a fraudulent credit report. At the sentencing hearing today, Ragnauth was found to be the organizer leader of a mortgage fraud scheme that caused the fraudulent funding of 30 residential loans, totaling more than $1.8 million.

Both Galvan and Jasso have pleaded guilty to their roles and are scheduled to be sentenced on February 26, 2010.

While Ragnauth was a fugitive in the Beaumont, Texas area, the U.S. Marshals Service in Beaumont featured Ragnauth’s photo on local newscasts along with information that he might be leaving the U.S. on a boat from Port Arthur, Texas. Ragnauth, a naturalized citizen, was captured by the U.S. Coast Guard when he was attempting to flee to his native Guyana. Guyana is located just east of Venezuela on the northern coast of South America. Ragnauth made it about half way to Guyana, being arrested in international waters between Cuba and Haiti.
The case was investigated by the FBI and HUD-Office of Inspector General. Assistant U.S. Attorney David Jarvis was in charge of the prosecution.

BIRMINGHAM—A federal grand jury today indicted a Brookwood man on wire fraud and false statement charges related to a more than $1 million mortgage fraud scheme in the Birmingham area, announced U.S. Attorney Joyce White Vance.

A 34-count indictment filed in U.S. District Court charges SCOTT ERIC PERRY, 34, with 17 counts of wire fraud and 17 counts of making false statements to lending institutions in connection to real estate transactions between February and December, 2006.

“Mortgage fraud damages our banks and lending institutions, but it also hits hard at our neighborhoods and communities,” Vance said. “When a property goes into foreclosure, surrounding homes tend to be harmed by lowered property values. Often the foreclosed properties are abandoned and the vacant houses become a source of vandalism or drug-related activities,” she said. “We are committed to seeking out mortgage fraud and prosecuting the perpetrators.”

According to the indictment, PERRY’s scheme was carried out as follows:

PERRY, doing business as Master Industries, bought houses in Jefferson County for the purpose of reselling them. From about Feb. 22 through Dec. 21, 2006, he sold numerous properties to various buyers throughout the Birmingham area. In each of these transactions, a federal Department of Housing and Urban Development form, a HUD-1 Settlement Statement, was issued that is required to accurately and truthfully disclose the payment of all monies associated with the transaction, and which parties made the payments.

Perry signed and submitted the statements as true and accurate, but failed to disclose that he both made the down-payments for the purchase of the homes and paid the purchasers at least $3,000 as an incentive to buy the properties.

The indictment charges that the submission of the false documents prompted lending institutions to authorize mortgage loans they would not, otherwise, have approved.

Those loan approvals resulted in the electronic wiring of fraudulently obtained money from the lending institutions, through a Federal Reserve Bank outside of Alabama, to a trust account PERRY had at Central Alabama Title in Birmingham, according to the indictment. Amounts of the 17 wire transactions charged as fraud range from $54,400 to $67,200.

The maximum sentence for the wire fraud counts is 20 years in prison and a $250,000 fine. The maximum sentence for the false statements counts is five years in prison and a $100,000 fine.

The indictment seeks forfeiture of $1,062,300, as the amount of the loans fraudulently obtained as a result of Perry’s fraud.

The FBI investigated the case. Assistant U.S. Attorney Patrick Carney is prosecuting it.

Members of the public are reminded that the indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

CINCINNATI—A jury in U.S. District Court found Bernard J. Kurlemann, 57, of Mason, guilty of conspiracy and fraud.

Kurlemann participated in a mortgage fraud scheme to deceive lending institutions by agreeing to sell high-end luxury properties to “straw buyers” and submitting false information on purchase contracts and other loan documents regarding down payments that were never made to the defendant’s companies. The defendant benefitted from the fraud by walking away from approximately $3.5 million in mortgage debt and receiving approximately $500,000 in seller’s proceeds.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Richard Cordray; Warren County Prosecuting Attorney Rachel Hutzel; Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation (FBI); Daniel M. McDermott, U.S. Trustee, Region 9; and other task force participants announced the verdict returned today at the conclusion of a trial that began with jury selection on October 20, 2010 before U.S. District Judge Timothy S. Black.

The jury convicted Kurlemann of all counts against him in an indictment returned in January 2010 including one count of conspiracy to commit loan fraud, punishable by up to five years’ imprisonment, and two counts of loan fraud, each punishable by up to 30 years’ imprisonment. The law also requires restitution to the lenders.

The scheme involved “straw buyers”—individuals who would purchase properties in name only. According to testimony presented at the trial, Kurlemann was a homebuilder who was part of the scheme. Kurlemann owned and operated a number of residential development construction businesses, two of which were known as Kurlemann Homes of Long Cove and Long Cove Management, LLC, Mason, Ohio.

The jury also convicted Kurlemann of one count each of bankruptcy fraud, concealment of assets, and making false oaths, for hiding an asset from the bankruptcy trustee and his creditors when his company, Kurlemann Builders, Inc., filed for bankruptcy in 2008. Those crimes are each punishable by five years’ imprisonment. Three others charged with Kurlemann in January 2010 have pleaded guilty.

Eric D. Duke, 36, Newport, Kentucky pleaded guilty on September 14, 2010 to three counts of conspiracy, and four counts of fraud. Duke is a self-employed tax preparer and interior designer. He also owned a property management company called Rivendale Property Management Group, L.P., in Maineville, Ohio.

Terrence J. Monahan Jr., 36, Cincinnati, formerly with Huntington National Bank, pleaded guilty on October 18, 2010 to one count of making a false statement to the U.S. Department of Housing and Urban Development.

Bryan Sanneman, 38, of Mason, owner of Sanneman Homes, Inc. pleaded guilty on September 3, 2010 to two counts of conspiracy to commit loan fraud. All three are awaiting sentencing.

The charges were the result of a two-year investigation by the Greater Cincinnati Mortgage Fraud Task Force. Judge Black has set sentencing for February 9, 2011.

Two of the straw buyers also pleaded guilty to charges connected with their roles in the scheme. Francisca Webster, 46, of Cincinnati, pleaded guilty to conspiracy to commit wire fraud. Christopher Gagnon, 37, of Florence, Kentucky pleaded guilty to loan fraud.

Stewart commended the investigation by the Greater Cincinnati Mortgage Fraud Task Force. The Greater Cincinnati Mortgage Fraud Task Force is a multi-agency, multi-jurisdictional initiative dedicated to combating the mortgage fraud problem in the Southern District of Ohio.

The case was prosecuted by Assistant United States Attorney Jennifer C. Barry and Special Assistant United States Attorney Bruce A. McGary of the Warren County Prosecutor’s Office.

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that CHEDDI GOBERDHAN, a real estate attorney, pled guilty yesterday before U.S. District Judge SHIRA A. SCHEINDLIN in Manhattan federal court to a seven-count Indictment charging him with conspiracy to commit bank and wire fraud, and six counts of bank fraud, in connection with a scheme that defrauded banks out of more than $23 million in home mortgage loans. GOBERDHAN made hundreds of thousands of dollars in illicit profits from the scheme, in which he worked closely with corrupt loan officers of GuyAmerican Funding, a mortgage brokerage firm in Queens, New York. GOBERDAN is the ninth defendant convicted of participating in this mortgage fraud scheme.
Manhattan U.S. Attorney PREET BHARARA said: “Cheddi Goberdhan carried out an elaborate subterfuge designed to steal millions of dollars in home mortgage loans. Instead of serving as the gatekeeper whom the banks relied upon to prevent fraud, he abused his position of trust to line his own pockets. We will continue working with our law enforcement partners to prosecute those who commit mortgage fraud and jeopardize the stability of our financial institutions.”
According to the Superseding Indictment and statements made during the proceedings in this case:
GOBERDHAN participated in a massive mortgage fraud scheme operated through a branch office of GuyAmerican Funding located on Liberty Avenue, in Jamaica, New York. GOBERDHAN’s coconspirators in the scheme included, among others, the president of GuyAmerican Funding (DAVID RAMNAUTH), GuyAmerican loan officers (PEGGY PERSAUD, ORETTE KILLIKELLY, GEORGE ESSO), individuals who recruited homeowners and “straw buyers” (ELTON LORD, RAFICK BAKSH, MAHAMOOD HUSSAIN), and another real estate lawyer (RAVI PERSAUD). As part of the scheme, the coconspirators arranged home sales between “straw buyers”—persons who posed as home buyers, but who had no intention of living in the mortgaged properties—and homeowners in financial distress who were willing to sell their homes. The GuyAmerican loan officers obtained mortgage loans for the sham deals by submitting fraudulent applications to banks and lenders, and using fraudulent representations about the supposed buyers’ net worth, employment, income, and plans to live in the properties. Frequently, the co-conspirators used the same straw buyer to obtain multiple mortgage loans. The co-conspirators kept some or most of mortgage proceeds for themselves, while the “straw buyers” ultimately defaulted on the mortgages, causing millions in losses to the banks and lenders.
GOBERDHAN acted as the closing attorney and the straw buyers’ attorney on numerous mortgage loans originated through GuyAmerican Funding, including loans in which the same straw buyer was used to purchase multiple properties within a short period of time. GOBERDHAN sent false documents to the banks, received the loan money from the banks into his attorney account, and made illicit payments from the sales proceeds to himself and his co-conspirators. GOBERDAN’s wife also owned the title company that was used for many of the transactions, in violation of New York disciplinary rules, which allowed him to further profit from the scheme.
GOBERDHAN, 57, of Elmont, New York, faces a maximum sentence of 210 years in prison. He will also be required to pay restitution to the victims of his offense and to forfeit the proceeds of his crimes. GOBERDHAN is scheduled to be sentenced by Judge SCHEINDLIN on April 13, 2011.
DAVID RAMNAUTH, PEGGY PERSAUD, ORETTE KILLIKELLY, RAJNARINE SINGH, ELTON LORD, and TARAMATEE SINGH previously pled guilty, and RAVI PERSAUD and GEORGE ESSO were convicted after trial. Two charged defendants, RAFICK BAKSH and MAHAMOOD HUSSAIN are fugitives.
Manhattan U.S. Attorney PREET BHARARA praised the investigative work of the Federal Bureau of Investigation and thanked it for its assistance in this case.
This case was part of the coordinated takedown of “Operation Bad Deeds,” a joint federal, state, and local law enforcement operation targeting mortgage fraud crimes, announced on October 15, 2009, in which 41 defendants were charged in various mortgage fraud scams in New York, Pennsylvania, Ohio, and North Carolina.
This case was brought in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The prosecution of the cases arising from “Operation Bad Deeds” is being overseen by the Office’s Complex Frauds Unit. The prosecution of this case is being handled by Assistant U.S. Attorneys REBECCA ROHR, NICOLE FRIEDLANDER, and ANTONIA APPS.

The United States Attorney’s Office for the Middle District of Pennsylvania announced that an Atlanta, Georgia resident was sentenced to 18 months in federal prison by Senior U.S. District Court Judge William J. Nealon for her role in a Luzerne County mortgage fraud scheme in 2005 and 2006.

According to United States Attorney Peter J. Smith, Nancy Barlet, age 52, previously pleaded guilty to a charge of mail fraud as an aider and abettor. Barlet admitted to providing false employment and income information on mortgage applications for numerous properties in the Wilkes-Barre area in 2005 and 2006. The fraud involved mortgages worth more than $400,000.

Barlet was charged in a criminal information filed by the United States Attorney’s Office in October 2008. The charge resulted from an investigation by the Federal Bureau of Investigation and Wilkes-Barre Police.

Judge Nealon also ordered Barlet to serve three years of supervised release following her prison sentence, and pay a special assessment of $100. The amount of restitution will be determined within 90 days.

U.S. Attorney Smith noted that the case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.