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

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

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

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

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

PITTSBURGH—A resident of Richland Township, Pennsylvania has been sentenced in federal court to 27 months in prison and two years of supervised release on his conviction of wire fraud conspiracy, United States Attorney David J. Hickton announced today.

United States District Judge Nora Barry Fischer imposed the sentence on Daniel Sporrer, 47, of Gibsonia, Pennsylvania. Judge Fischer also ordered Sporrer to pay approximately $575,000 in restitution.

According to information presented to the court, Sporrer participated in a mortgage fraud scheme with Robert Arakelian, who was a mortgage broker associated with Pittsburgh Home Loans; Karen Atkison, who was a closing agent who worked with Sporrer; and others. As part of the conspiracy, Arakelian submitted false loan applications to lenders that falsely reported that the borrowers had sufficient funds in their own accounts to make the down payments associated with the purchases of real estate and to otherwise qualify for the loans to finance the purchases of the real estate. The closing documents, which were prepared and executed by Sporrer and Atkison, falsely reported to the lenders that the borrowers made down payments from their own funds at the closings, when, in fact, they did not make any payments at the closings. In addition, Sporrer advanced money to Arakelian in advance of the closings so that Arakelian could purchase certified checks, copies of which were made to present to the lenders to falsely verify that the borrowers had made the down payments.

Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Mortgage Fraud Task Force who conducted the investigation that led to the conviction of Sporrer. The Mortgage Fraud Task Force is comprised of investigators from federal, state, and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the United States Secret Service; Federal Bureau of Investigation; the Internal Revenue Service – Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; and the United States Postal Inspection Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894-7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General’s Consumer Protection Hotline at (800) 441-2555.

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

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

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

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

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

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

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

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

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

PITTSBURGH—A resident of Allegheny County has been sentenced in federal court to 21 months of incarceration followed by two years of supervised release on his conviction of wire fraud conspiracy, United States Attorney David J. Hickton announced today.

United States District Judge Joy Flowers Conti imposed the sentence yesterday on Constantino Papastergous, 40, of Allison Park, Pa. Judge Conti’s sentencing order also requires Papastergous to repay more than $1,000,000 in restitution.

According to information presented to the court, Papastergous was a loan officer for Steel City Mortgage, which was a mortgage broker company. Papastergous and other individuals associated with Steel City Mortgage used Kenneth Cowden, an unlicensed appraiser who submitted fraudulent appraisals using the names of licensed appraisers, to prepare more than $85 million of fraudulent appraisals for Steel City Mortgage. The appraisals were fraudulent in that they falsely represented that they were prepared by a licensed appraiser and because they overstated the value of the property serving as collateral for the loans. Papastergous and other individuals associated with Steel City also submitted loan applications and supporting documents that misrepresented the financial status of the borrowers, including their income and assets.

Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of Papastergous. The Mortgage Fraud Task Force is comprised of investigators from federal, state, and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service – Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894-7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General’s Consumer Protection Hotline at (800) 441-2555.

INDIANAPOLIS—Kathy Puckett, 47, of Richmond, Ind., was sentenced today to 51 months upon her guilty plea to mail fraud and obstructing justice announced Joseph H. Hogsett, U.S. Attorney, Southern District of Indiana. This followed an investigation by the Richmond Police Department, Indiana Secretary of State Todd Rokita’s Prosecution Assistance Unit, and the Federal Bureau of Investigation, Muncie Office.

Kathy Puckett was a co-owner of Richmond Mortgage and served as its sole mortgage originator. Puckett’s job was to prepare loan documents including loan applications and other documents supporting buyers’ income and ability to pay. Between March 2006 and February 2008, Puckett submitted false information to the lenders including inflated bank account balances, false verifications of employment, false verifications of rent, misrepresenting one borrower’s name to reflect a better credit score, and false gift letters. These actions resulted in fraudulent loans exceeding $200,000. In addition to her mortgage broker fee, Puckett received a yield spread premium fee that was not disclosed to the borrower which represented a fee for a higher interest loan given to the borrower. During the investigation of her mortgage fraud activities, in January 2008, Puckett directed an acquaintance to remove documents from files that were to be turned over to the FBI.

According to Assistant U.S. Attorney Gayle L. Helart, who is prosecuting the case for the government, U.S. District Judge Larry J. McKinney also ordered three years of supervised release following her release from prison.

This week, Mary Lee Reinking of Clinton, IA, a former mortgage broker with Crow Valley Mortgage in Bettendorf, Iowa, was sentenced by United States District Judge John A. Jarvey to five years’ probation, including one-year home confinement, in connection with Reinking’s previous guilty plea to one count of wire fraud. Reinking also was ordered to pay $97,343 in restitution.

Reinking and Natalie Long, another broker employed at Crow Valley Mortgage, assisted Darryl Hannken and Robert Herdrich in a scheme to defraud mortgage lenders Argent Mortgage and New Century Mortgage in connection with loans to purchase two rental properties in Davenport, Iowa. Reinking and Long, aware that Hanneken and Herdrich would divert some of the loan proceeds to their own pockets without lender knowledge, facilitated the scheme by acting as broker for Herdrich and Hanneken. Reinking and Long also submitted false information concerning the income and financial assets of Herdrich and Hanneken in order to qualify them for the loans.

This fraud was uncovered as part of a broader FBI investigation of fraudulent mortgage practices in connection with the purchases of dozens of rental properties in Davenport between 2004 and 2006. Thus far, two mortgage brokers, a real estate agent, and two property buyers have pleaded guilty to fraud charges resulting from this investigation. Another mortgage broker and an attorney have been charged and are awaiting trial.

This case was investigated by the FBI and prosecuted by the United States Attorney’s Office, Southern District of Iowa.

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

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

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

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

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

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

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

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

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that DAVID RAMNAUTH, the former president of the Queens mortgage brokerage GuyAmerican Funding Corp. (“GuyAmerican”), was sentenced today to 30 months in prison for his role in a massive mortgage fraud scheme in which over $23 million in fraudulent loans were processed in connection with over 44 properties in the New York metropolitan area. RAMNAUTH pled guilty to his role in the mortgage fraud scheme in August 2010.

Manhattan U.S. Attorney PREET BHARARA said: “As the president of a mortgage brokerage that was little more than a fraud mill, David Ramnauth abdicated his professional responsibility just to make a quick buck. Today’s sentence makes clear that corrupt gatekeepers like Ramnauth who perpetrated these schemes will be punished for their crimes. Along with our law enforcement partners, we will continue to investigate and punish those who perpetrate and profit from mortgage fraud.”

According to the Indictment and other documents previously filed in Manhattan federal court and statements made in court:

RAMNAUTH, the President of GuyAmerican, facilitated a massive mortgage fraud scheme that was conducted through a GuyAmerican branch office located in Jamaica, New York. RAMNAUTH permitted his state-approved mortgage brokerage license to be used by the loan officers of GuyAmerican to submit fraudulent applications for millions of dollars of loans. In return, RAMNAUTH received hundreds of thousands of dollars in commissions from the federally insured financial institutions that were deceived by the fraudulent scheme.

RAMNAUTH was one of eleven defendants charged in connection with the fraudulent scheme that was run through GuyAmerican. Four defendants, PEGGY PERSAUD, ORETTE KILLIKELLY, TARAMATEE SINGH, and GEORGE ESSO, were loan officers at GuyAmerican who collectively submitted dozens of loans containing false statements as to the borrowers’ employment, income, and assets, among other things. The loan officers also each received tens, and in some cases hundreds, of thousands of dollars in commissions based on the fraudulent loans.

Three other defendants charged in the scheme, ELTON LORD, RAFICK BAKSH, and MAHAMOOD HUSSAIN, worked with GuyAmerican loan officers to recruit homeowners in financial distress who were willing to sell their homes. They used “straw buyers” – persons who posed as home buyers in exchange for a fee, but who had no intention of living in the mortgaged properties—to perpetrate the scheme. The defendants arranged home sales between the distressed sellers and these straw buyers, and obtained mortgage loans using fraudulent representations. The defendants re-sold, or flipped, properties multiple times between different straw buyers, stripping the equity from these properties as they were resold with inflated market values.

RAMNAUTH entered into an arrangement with the loan officers submitting the fraudulent loans, such that they could continue to use his mortgage brokerage license provided the “real buyers” of the properties—LORD, BAKSH, and HUSSAIN—held back six months of mortgage payments from the closings, thereby concealing the fraudulent scheme from the banks. RAMNAUTH also submitted his own fraudulent loans to banks, falsifying employment information on the loan applications, including for the purchase of a property by his wife.

* * *

RAMNAUHTH, 55, of Levittown, New York, previously pled guilty to one count of conspiring to commit bank and wire fraud. In addition to the prison term, U.S. District Judge SHIRA A. SCHEINDLIN also sentenced RAMNAUTH to a term of three years of supervised release.

LORD, who pled guilty on August 4, 2010, was sentenced on January 13, 2011, to 46 months in prison. GEORGE ESSO, who was found guilty after a two-week trial on August 26, 2010, was sentenced on February 4, 2011, to one year and one day in prison and three years of supervised release.

PEGGY PERSAUD, KILLIKELLY, TARAMATEE SINGH, CHEDDI GOBERDHAN, and RAJNARINE SINGH previously pled guilty but have not yet been sentenced. RAVI PERSAUD was found guilty after a trial and is awaiting sentencing.

* * *

Mr. BHARARA praised the work of the FBI and thanked them for their assistance in the case.

This case was brought in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys ANTONIA M. APPS and REBECCA ROHR are in charge of the prosecution.

PHILADELPHIA—Frank J. Dattilo, 64, of Holland, Pennsylvania, was sentenced today to 15 months in prison for a scheme to defraud mortgage lenders in an effort to obtain money and property, announced United States Attorney Zane David Memeger. DAttilo was the owner and operator of the mortgage brokerage firm Provident Financial Group (“PFG”), located in Bensalem, PA. He employed Michael Giello as a mortgage broker and loan officer, and Jason Megow as a loan processor. Dattilo marketed to people with poor credit or low incomes. Between January 2004 and February 2007, Dattilo, Giello, and Megos created false documents for use in mortgage applications. The falsified forms, among other things, overstated borrowers’ income, falsely showed that borrowers had rental histories, and showed that a property was an income-producing rental property when, in fact, it was not. These fraudulent documents made borrowers appear more creditworthy than they were, thereby misleading the banks into funding the mortgage loans.
All three defendants pleaded guilty to two counts, each, of mail fraud. Giello was sentenced to one year and one day; Megow was sentenced to one day in prison and five years of supervised release. In addition to the prison term, U.S. District Court Judge Norma Shapiro ordered the three defendants to pay total restitution in the amount of $117,673.66.
This case was investigated by the Federal Bureau of Investigation and Pennsylvania Department of Banking. It was prosecuted by Assistant United States Attorney Maria M. Carrillo.

In the still-developing “mortgagegate” scandal, the Obama White House is pledging its loyalties to the letter of the law, vowing Tuesday to hold “accountable” any bank that engaged in foreclosure fraud.

“As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law,” White House Press Secretary Robert Gibbs told reporters.

“Mortgagegate,” as it’s been dubbed in the media, centers around the use of unqualified workers given jobs as “mortgage experts,” who were then tasked with signing off on thousands of documents required by courts in foreclosure proceedings.

Many times, paperwork was not properly examined. In some cases, according to sworn statements, bribes of jewelry, cars and even houses were offered if an employee would forge documents or notary seals.

And all of it, according to the allegations, happened in an effort to speed up the foreclosure process.

It was enough for attorneys general in all 50 states to initiate investigations. Only 23 states currently require a court approval before a bank may foreclose on a home.

Now, the Obama administration has directed its Financial Fraud Enforcement Task Force to find out whether banks that used so called “robo-signers” actively mislead government housing agencies, or if they committed mail or wire fraud by submitting false paperwork.

“The administration’s Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process,” Gibbs explained Tuesday.

It is possible the investigation will result in criminal charges, The Washington Post noted.

In the wake of the “robo-signing” revelations, several major lenders froze foreclosures temporarily to review paperwork, Bank of America being the largest. The institution said Monday it would be resuming foreclosures this week.

The Obama administration has resisted calls for a national moratorium on foreclosures, with spokesman Robert Gibbs warning of the “unintended consequences” of such an action.

While many House Democrats, including Speaker Nancy Pelosi (D-CA), have called for a congressional investigation into foreclosure fraud, Congress is widely expected to attempt legislation retroactively forgiving the mortgage industry for its abuses.

Up to 1.2 million homes are expected to be foreclosed upon this year, according to data provided by RealtyTrac Inc.

By Stephen C. Webster

Frank J. Dattilo, 64, Holland, Pennsylvania, was sentenced to 15 months in prison for a scheme to defraud mortgage lenders in an effort to obtain money and property.

Dattilo was the owner and operator of the mortgage brokerage firm Provident Financial Group (“PFG“), located in Bensalem, PA. He employed Michael Giello as a mortgage broker and loan officer, and Jason Megow as a loan processor. Dattilo marketed to people with poor credit or low incomes. Between January 2004 and February 2007, Dattilo, Giello, and Megos created false documents for use in mortgage applications. The falsified forms, among other things, overstated borrowers’ income, falsely showed that borrowers had rental histories, and showed that a property was an income-producing rental property when, in fact, it was not. These fraudulent documents made borrowers appear more creditworthy than they were, thereby misleading the banks into funding the mortgage loans.

All three defendants pleaded guilty to two counts, each, of mail fraud. Giello was sentenced to one year and one day; Megow was sentenced to one day in prison and five years of supervised release. In addition to the prison term, U.S. District Court Judge Norma Shapiro ordered the three defendants to pay total restitution in the amount of $ 117,673.66.

United States Attorney Zane David Memeger announced the sentence.

This case was investigated by the Federal Bureau of Investigation and Pennsylvania Department of Banking. It was prosecuted by Assistant United States Attorney Maria M. Carrillo.

By Jimmy

The unfolding foreclosure fraud crisis isn’t easy to understand, but here it is boiled down. Banks need proper documentation to repossess a home from a family. They need documents about everything from the family’s financial situation to its history of missed payments to its assets. And they need to verify that the information in those documents is correct. But they didn’t. They hired individuals to sign thousands of mortgage papers — legal affidavits, swearing to a judge that they had personal knowledge of the information within — without checking a thing.

Only 23 states require a judge to sign off on a foreclosure, but some banks are now stopping foreclosures in all 50 states. Moreover, they are halting the sale of foreclosed properties to new homeowners.

So who stands to gain? And who stands to lose? Let’s go through the possible impacts on major players and markets, one by one.

The winners:

* Homeowners undergoing foreclosure. Borrowers undergoing foreclosure might benefit from the various state moratoriums: The process is stalled for now, meaning some might have a few more months in their homes, and they know they will not be evicted without due process. States and federal agencies might also work with banks to provide principal write-downs and right-to-rent to ameliorate the foreclosure crisis in the meantime.

The losers:

* Recent purchasers of foreclosed homes. A nightmare scenario: Banks probably foreclosed on and evicted families without proper mortgage documentation. It is unclear whether or how courts might overturn those foreclosures. (One expert I spoke with said it would be more likely that the bank would have to offer some sort of restitution to the evicted family, but nobody really knows.) What if you recently bought one of those houses? There’s a whole lot of uncertainty for you, right now.
* The housing market. The fraud crisis looks certain to prolong the foreclosure crisis — dragging out how long families undergoing foreclosure will remain in limbo, and preventing banks from clearing properties off of their books. It seems possible that the foreclosure fraud crisis will weaken an already-weak housing market.
* The banks and investors. This could be a complete catastrophe. For a detailed but clear explanation of the various liabilities, see Mike Konczal’s description of who owns what and who stands to lose — and an explanation of why this might create a new too-big-to-fail scenario. Rep. Brad Miller (D-N.C.) also provided a clear explanation to The Washington Post yesterday:

There is massive potential liability for the securitizers, which are mostly the biggest banks. The contract was that if mortgages didn’t meet certain requirements, then the securitizer would buy them back. The mortgage servicers and trustees have exclusive control over the paperwork. Both the investors, the people who own the mortgage-backed securities, and the homeowners, really depend on them. There’s been lots of litigation where investors try to get securitizers to buy back the bad mortgages because they were flawed, but that litigation has been stymied by procedural objections. If the private investors can break through that defense and require the mortgages that don’t meet the requirements to be bought back, the liabilities for the biggest banks will be enormous.

A little of each:

* Communities with concentrations of homes in foreclosure. Good news and bad news. On the one hand, families should be able to stay in their homes until the banks and Washington work out the foreclosure fraud crisis. That will benefit communities with lots of families undergoing foreclosure. On the other hand, neighborhoods with high concentrations of bank-owned properties for sale will see a lot of homes remain vacant, pulled off of the market.
* The courts. State attorney generals — Beau Biden in Delaware, Richard Cordray in Ohio, Tom Miller in Iowa and many others — are going hard after the banks. This looks to be just the first wave of what might be thousands of cases for judges to handle. Many housing advocates argue that judges should have had a more prominent role in foreclosure decisions before, anyway — and this might give new life to cramdown legislation in Washington. But the scandal certainly has the potential to swamp courts and cost billions in legal fees. In that sense, lawyers might be the clearest winner from the whole thing thus far.

By Annie Lowrey

Mortgage brokers must perform due diligence on clients and their solicitors to combat mortgage fraud, says the Association of Mortgage Intermediaries’ fraud representative.

John Malone, chairman of PMS and the AMI representative on the National Fraud Authority’s mortgage fraud forum, says client due diligence is the key phrase being used by the Financial Services Authority and brokers will be expected to do more.

The NFA forum includes representatives from the Metropolitan Police, Council of Mortgage Lenders, Solicitors Regulation Authority and the FSA. Malone recently joined to represent brokers.

He says: “Brokers have to carry out due diligence on solicitors and find out who they are, how long they have been operating and if they have had any issues with any lenders.”

Malone says brokers have simply not been doing enough to combat fraud and often accept their clients’ solicitors at face value.

Steve Wilmott, director of intelligence and investigations at the SRA, says only a small number of solicitors commit mortgage fraud but it will work with anyone to confront it.

He says: “The relationship with lenders and their representative bodies is excellent and we are working closely with the police, the NFA and other agencies as we are determined to deal with the problem.”

But David Hollingworth, head of communications at London &Country, says: “Obviously, if something doesn’t seem right with solicitors that should set the alarm bells ringing and brokers should do extra checks.

“But it would be difficult for them to perform due diligence on solicitors. Lenders manage the firms they use carefully so if a lender didn’t want to use a solicitor it would not happen anyway.”

Alan Cleary, managing director of Precise Mortgages, says: “We’ve got access to national fraud databases. I don’t expect brokers to have that because it costs a lot of money.

“The main thing for brokers is to verify the source of introduced business and make sure they don’t get duped into accepting dodgy payslips. We’ve all got a sixth sense that tells us when something isn’t right.”

By Samuel Dale

Three members of a mortgage fraud scheme, including a title agent and a mortgage broker, were arrested today on a criminal Complaint charging them with conspiring to commit wire fraud, United States Attorney Paul J. Fishman announced today in the attached Press Release.

Ania Nowak, 43, Zbigniew Cichy, 41, both of Belvidere, New Jersey, and Kim Salvemini, 55, of Wallington, New Jersey were arrested this morning by Special Agents of the Federal Bureau of Investigation (“FBI”). The defendants are charged by Complaint with conspiring to defraud various mortgage lenders of over $2.7 million by conducting at least five fraudulent real estate transactions involving two residential properties in New Jersey. An initial appearance for all three defendants is scheduled before United States Magistrate Judge Esther Salas today at 2:00 p.m. in Newark.

According to the Complaint unsealed today in Newark federal court:

Nowak owned a real estate title company, A.N. Title Agency, LLC, and acted as the title and settlement agent at real estate closings. In that role, Nowak was responsible for, among other things: ensuring that the seller or the borrower in a refinancing transaction actually owned the home that was being used to secure a mortgage loan; paying off any prior mortgages before paying any money to the borrower; and recording certain mortgage documents with the county clerk. Instead of fulfilling these responsibilities in the five transactions described in the Complaint, Nowak allegedly used her position to perpetrate the fraud along with her coconspirators.

From November 2005 to December 2007, in furtherance of their scheme, Nowak and Cichy employed numerous fraudulent techniques – including allowing Cichy to apply and obtain a loan on a property he did not own, failing to pay off prior mortgages with new money lent by lenders, and failing to record mortgage documents with the county clerk. Nowak and Cichy also recruited Salvemini, a mortgage broker, to serve as a straw buyer to purportedly purchase a property that Cichy owned. The transaction was made so Salvemini could apply for fraudulent mortgage loans which Nowak and Cichy then stole. Cichy paid Salvemini approximately $17,500 for his role in the fraud as a straw buyer and in obtaining fraudulent loans.

In total, Nowak and Cichy spent over $1 million of the fraudulent loans they obtained to support Cichy’s construction business and to pay for various personal expenses. Those expenses -2- included a Mercedes Benz and other automobiles, multiple trips to Aruba, a trip to Poland, furniture, clothing, and purchases from QVC and the Home Shopping Network.

The wire fraud conspiracy count with which each of the defendants is charged carries a maximum potential penalty of 30 years in prison and a maximum $1 million fine. In determining an actual sentence, the judge to whom the case is eventually assigned would, upon a conviction, consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the individual defendant’s criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.

Fishman credited the Special Agents of the FBI, under the direction of Special Agent in charge Michael B. Ward, with the investigation leading to the criminal Complaint. Fishman also thanked Stewart Title for their assistance in the investigation.

The Government is represented by Assistant United States Attorney Matthew E. Beck of the Economic Crimes Unit in Newark.

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

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

A former mortgage broker who helped orchestrate a massive mortgage fraud scheme that caused well over $40 million in losses was sentenced today to 78 months in federal prison.

Mark Alan Abrams, 49, of downtown Los Angeles, was sentenced by United States District Judge Dean D. Pregerson. In addition to the prison term, Judge Pregerson ordered Abrams to pay more than $41 million in restitution to two federally insured banks.

In issuing the sentence, Judge Pregerson said it was important to hold fraud artists “accountable for great misdeeds.” The court noted that Abrams’ willingness to defraud banks, utilize credit information belonging to unknowing victims and induce underlings to participate in the scheme was “particularly evil.”

Abrams’ sentencing followed his guilty pleas to conspiracy to commit bank fraud and loan fraud, bank fraud, making a false statement on a tax return and obstruction of justice. Abrams was one of two men who led a massive mortgage fraud that involved properties across California. In addition to being a leader of the scheme, Abrams engaged in active efforts to cover up his role and destroy evidence when the fraud started to come to light. Abrams’ obstruction in a related civil case was so serious that a Judge Pregerson found him in contempt of court and put him in jail for 30 days.

A real estate developer, Charles Elliott Fitzgerald, who along with Abrams ran the fraud scheme, was previously sentenced to 14 years in federal prison (see: http://www.justice.gov/usao/cac/pressroom/pr2008/136.html).

Abrams and Fitzgerald ran a wide-ranging and sophisticated scheme that obtained inflated mortgage loans on homes in some of California’s most expensive neighborhoods, including Beverly Hills, Bel Air, Holmby Hills, Malibu, Carmel, Mill Valley, Pebble Beach and La Jolla. Members of the conspiracy – real estate brokers, appraisers and mortgage bankers, who all shared in the profits from the fraudulent sales – sent false documentation, including bogus purchase contracts and appraisals, to the victim banks to deceive them into funding mortgage loans that were hundreds of thousands of dollars more than the homes actually cost. Lehman Brothers Bank alone was deceived into funding more than 80 such inflated loans from 2000 into 2003, resulting in tens of millions of dollars in losses.

A total of 11 real estate professionals have been convicted of federal charges related to the scheme.

This case is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation.

By Moe Bedard

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.

Yesterday in federal court in St. Paul, the 30-year-old part owner of Legacy Lending pleaded guilty to participating in a mortgage fraud scheme that involved 37 separate real estate transactions and $20 million in loan proceeds. Appearing before United States District Court Judge Richard H. Kyle, Thomas John Hunter, of Maple Grove, pled guilty to one count of wire fraud and one count of money laundering in connection to this crime. He was charged via an information on January 26, 2010.

In his plea agreement, Hunter admitted that from September 2005 through July 2007, he and others carried out a fraud scheme, through which mortgage loans were obtained from unsuspecting lenders by straw purchasers, in amounts far exceeding actual purchase prices, based on inflated property appraisals. Hunter also admitted that during the course of this scheme, he and others failed to inform lenders that funds in excess of the actual property purchase prices were misappropriated by those involved in the fraud scheme, and that concealed payments were made out of loan proceeds to participants in the scheme.

To further the scheme, Hunter and others caused fraudulent loan applications to be provided to potential lenders in which property purchasers were falsely identified and property was falsely described as “owner occupied” when in fact each straw buyer was purchasing multiple properties at the same time. In application materials submitted to lenders, the defendant and others also inflated the income and assets of potential borrowers, and a licensed real estate appraiser involved in the fraud scheme created inflated appraisals of the properties to support the fraudulent loan amounts. The defendant participated in 37 separate fraudulent real estate transactions, worth approximately $20 million in total loan proceeds, from which at least $2.2 million was received by participants in the scheme through illegal, concealed payments.

Specific to the charges filed against him in this case, Hunter admitted that on April 20, 2006, he and others engaged in an illegal wire transaction when they obtained $825,000 in mortgage loan financing for the purchase of a residence in Rogers, Minnesota. Hunter also admitted that from those funds, he and his co-conspirators misappropriated at least $110,000. In addition, Hunter admitted that on April 21, 2006, he engaged in an illegal monetary transaction when a check in the amount of $13,2000, representing proceeds from the fraud, was deposited into a Legacy Lending bank account.

For his crimes, Hunter faces a potential maximum penalty of 20 years in prison on the wire fraud count and 10 years on the money laundering count. Judge Kyle will determine his sentence at a future date. This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It was prosecuted by Assistant U.S. Attorneys Timothy C. Rank and Christian S. Wilton.

One of Hunter’s co-conspirators, Frederick Earle Deen, age 30, of Minneapolis, who also had part ownership interest in Legacy Lending, is scheduled to be sentenced this Friday for his role in the fraud scheme. Another co-defendant, Taylor Trump, was sentenced for his involvement in this crime on August 21, 2008.

DENVER—Gary A. Noble, age 31, of Denver, Colorado, was indicted by a federal grand jury in Denver, which on May 20, 2010, returned a 63-count wire fraud indictment related to a mortgage fraud scheme, United States Attorney David Gaouette and Federal Bureau of Investigation (FBI) Special Agent in Charge James Davis announced. Noble was arrested by FBI special agents without incident on June 3, 2010 in California. He will make his initial appearance in U.S. District Court in Denver on June 18, 2010, where he will be advised of the charges pending against him. He was released yesterday on bond.

According to the indictment, beginning on May 1, 2005 and continuing until March 3, 2006, Noble knowingly devised and intended to devise a scheme to defraud lending companies that funded residential mortgage loans and for obtaining money from them and from buyers who paid cash for a residence by means of materially false and fraudulent representations.

Specifically, it was part of the scheme that Noble allegedly orchestrated the purchase of numerous residential properties by his family members, and in most cases, the resale of those properties shortly thereafter to his and his family’s associates. The defendant used companies he controlled to facilitate and conceal his scheme. Through Noble Mortgage Company, he acted as mortgage broker and arranged to have false and fraudulent documents presented to the lenders to enable the buyers to qualify for loans for the properties. Through Noble Title Agency, he acted as a title insurance agent, and caused commitments for title insurance to be issued which made it appear that the buyers would be purchasing the properties free of prior encumbrances and that the lenders would be guaranteed priority leans, when they would not be. Through Noble Title Agency, the defendant acted as settlement agent for the lenders and received all of the loan proceeds and monies associated with the loans, but failed to use them to pay off the prior loans as directed by the lenders. He also misappropriated a portion of the proceeds for his own use and benefit. Through Equity Builders, Noble diverted proceeds of the fraud and concealed payments he made to facilitate the fraud.

“It is important to prosecute mortgage fraud cases to protect the integrity of the financial markets,” said U.S. Attorney David Gaouette.

“Investigating and prosecuting mortgage fraud cases remains a priority for the Denver Division of the FBI,” said FBI Special Agent in Charge James Davis.

If convicted, the defendant faces not more than 20 years’ imprisonment and/or a fine of not more than $250,000 per count for each of the 63 counts. Noble could also be ordered to pay restitution.

This case was investigated by the FBI.

Noble is being prosecuted by Assistant U.S. Attorney Linda Kaufman.

The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

This case 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.

Acting United States Attorney Robert S. Cessar announced today, May 28, 2010, that during the week beginning May 24, 2010, one attorney pleaded guilty in connection with a mortgage fraud scheme and another attorney was sentenced to two years of imprisonment in connection with a different mortgage fraud scheme.

On May 27, 2010, Daniel Sporrer, a resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court in Pittsburgh to a charge of wire fraud conspiracy in connection with a mortgage fraud scheme.

Sporrer, age 46, pleaded guilty to one count before United States District Judge Nora Barry Fischer.

In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Sporrer participated in a mortgage fraud scheme with Robert Arakelian, who was a mortgage broker associated with Pittsburgh Home Loans, Karen Atkison, who was a closing agent who worked with Sporrer, and others. As part of the conspiracy, Arakelian submitted false loan applications to lenders that falsely reported that the borrowers had sufficient funds in their own accounts to make the down payments associated with the purchases of real estate and to otherwise qualify for the loans to finance the purchases of the real estate. The closing documents, which were prepared and executed by Sporrer and Atkison, falsely reported to the lenders that the borrowers made down payments from their own funds at the closings, when, in fact, they did not make any payments at the closings. In addition, Sporrer advanced money to Arakelian in advance of the closings so that Arakelian could purchase certified checks, copies of which were made to present to the lenders to falsely verify that the borrowers had made the down payments.

Judge Fischer scheduled sentencing for October 29, 2010. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.

On May 25, 2010, Robert Danenberg, a resident of Pittsburgh, Pennsylvania, was sentenced to two years of incarceration and three years of supervised release on his conviction of wire fraud conspiracy in connection with a different mortgage fraud scheme.

United States District Judge Ambrose imposed the sentence on Danenberg, age 55.

According to information presented to the court by Assistant United States Attorney Brendan T. Conway, Danenberg is an attorney who specialized in closing real estate transactions. He participated in a mortgage fraud conspiracy in which a co-conspirator recruited buyers to purchase properties at fraudulently elevated prices and financed through fraudulently obtained loans. Danenberg’s role in the conspiracy was to close the fraudulent loans, and the closings themselves were fraudulent in two ways. First, the closings required the borrowers to bring certified funds to the closings from their own funds to make the down payments associated with the purchase. The borrowers, however, did not have sufficient funds to make the down payments and were often getting cash back at the closings. The down payments were paid by the sellers, the mortgage broker, and on several occasions, by Danenberg himself. The closings were also fraudulent in that the settlement statements reflected payments to contractors for work purportedly already done on the properties serving as collateral for the loans. In fact, however, as Danenberg well knew, those payments were kickbacks to participants in the conspiracy.

In total, Danenberg closed approximately 70 fraudulent loans totaling in excess of $5,000,000 of loan proceeds. Danenberg pleaded guilty after four days of trial.

The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Sporrer and Danenberg. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the United States Secret Service; Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; and the United States Postal Inspection Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Mortgage industry members with knowledge of fraudulent activity are encouraged to call the Mortgage Fraud Task Force at (412) 894‑7550. Consumers are encouraged to report suspected mortgage fraud by calling the Pennsylvania Attorney General’s Consumer Protection Hotline at (800) 441‑2555.

A Brookline man has been sentenced to five years probation, with four months of home detention, for participating in a mortgage fraud scheme, federal prosecutors said.

Jason Jester, 40, of Fordham Drive was convicted of wire fraud conspiracy for running Precision Mortgage, a mortgage broker business that helped borrowers obtain real estate loans by lying about the borrowers’ finances, prosecutors said.

Jester conspired to submit false documents to lenders, including appraisals that overstated the value of property, and federal tax forms and pay stubs that overstated the borrower’s income, prosecutors said.<-->