DENVER—Cedric Lipsey, age 35, and Philip A. Martinez, age 34, both from Denver, Colorado, were indicted by a federal grand jury last week on charges of wire fraud as part of a mortgage fraud scheme, U.S. Attorney David Gaouette, FBI Special Agent in Charge James Davis, and IRS Criminal Investigation Special Agent in Charge Christopher M. Sigerson announced. Lipsey was arrested by federal agents without incident. He appeared in U.S. District Court in Denver on August 31st, 2009 for an initial appearance, where he was advised of the charges pending against him. He appeared in court again today, where U.S. District Court Magistrate Judge Kristen L. Mix authorized his release on a $50,000 property bond.

According to the indictment, beginning in April 2004, and continuing thereafter until about March 2006, in the District of Colorado and elsewhere, Cedric Lipsey, aided and abetted by defendant Philip A. Martinez, did knowingly devise and intend to devise a scheme to defraud lending companies that funded residential mortgage loans and to obtain money from them by means of materially false and fraudulent pretenses, representations, and promises.

Cedric Lipsey, a licensed real estate agent, held himself out as a successful real estate agent and investor. Philip A. Martinez was a loan officer and mortgage broker.

Lipsey orchestrated the purchase and resale or refinancing of numerous residential properties, including the sale of one of his own homes, by paying individuals to participate as “investors” in what he referred to as an investment “opportunity.” Lipsey and Martinez arranged for these so-called “investors” to use their good credit to obtain mortgage loans to purchase the properties. Shortly after the first set of loans that helped these individuals purchase properties, Lipsey caused them to sell the properties to a second set of buyers at substantially higher prices, with Lipsey and Martinez taking a combination of commissions, fees, and proceeds from the first and second transactions.

Lipsey falsely represented that the first buyers would be purchasing and had purchased the properties for less than their actual market value. The first sales were not “distressed”, as the defendants sometimes represented to facilitate their fraud. In fact, the first buyers purchased the properties at or near their market value, and there was no legitimate reason for the substantial increase in price when the same properties were resold shortly thereafter.

Lipsey and Martinez arranged to have a variety of fraudulent documents submitted to the lenders in support of the loan applications. These consisted primarily of documents purporting to show proof of the borrowers’ employment, proof of the borrowers’ assets, and sources of the borrowers’ asset, and incomes. The defendants also used forged signatures where necessary to facilitate the scheme. Furthermore, Lipsey enabled certain appraisers to create false reports which reflected that the subject properties were “comparable” to the higher quality or otherwise more valuable properties, when they were not.

“Mortgage fraud weakens our economy, threatens the recovery of the housing market, and makes it more difficult for law-abiding folks to purchase a home,” said United States Attorney David Gaouette.
“Mortgage fraud hurts borrowers, financial institutions, and legitimate homeowners,” said FBI Denver Division Special Agent in Charge James Davis. “The FBI, in conjunction with our law enforcement, regulatory, and industry partners, will continue to diligently pursue perpetrators of mortgage fraud schemes.

“Mortgage fraud creates a significant loss of tax revenue, drives buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties,” said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.

If convicted of wire fraud, which are counts one through 27, the penalty is not more than 20 years in federal prison, and up to a $250,000 fine, per count. If convicted of count 28, monetary transaction in property derived from unlawful activity, the defendant faces not more than 10 years in federal prison, and up to a $250,000 fine.

The case was investigated by the Federal Bureau of Investigation (FBI), and the Internal Revenue Service – Criminal Investigation (IRS CI).

The case is being prosecuted by Assistant U.S. Attorney Linda Kaufman.

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

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

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

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

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

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

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

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

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

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

ALEXANDRIA, VA—Lourdes Rojas Almanza, 28, of Falls Church, Va., was sentenced today to 77 months in prison, followed by five years of supervised release, for her role in a multi-million-dollar mortgage fraud conspiracy. Almanza was also ordered to pay restitution in the amount of $9,718,749.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Colonel David Rohrer, Fairfax County Chief of Police; and Shawn Henry, Assistant Director in Charge of the FBI Washington Field Office, made the announcement after sentencing by United States District Judge Gerald Bruce Lee. Almanza pled guilty on Dec. 17, 2009.
According to court documents, Almanza, a loan officer, was part of a wide-ranging mortgage fraud conspiracy, in which she and others recruited straw buyers with good credit to purchase properties for other individuals. As a loan officer, Almanza prepared fraudulent mortgage loan applications in the straw buyers’ names. The straw buyers signed the fraudulent loan applications in order to obtain much larger loans than they were qualified to receive; the loan applications misstated, among other things, the straw buyers’ income, assets, employment, citizenship status, and intent to live in the property. Almanza also obtained fake bank statements, pay stubs, and W-2′s to corroborate the false statements in the loan applications.
During the course of the conspiracy, Almanza and her co-conspirators engaged in more than 30 fraudulent property transactions in the Eastern District of Virginia and obtained over $24 million in mortgage loans to purchase the properties. The straw buyers defaulted on the bulk of the fraudulent loans and the properties either went into foreclosure or were short-sold for sizeable losses. As a result, more than 20 banks and lenders suffered losses in excess of $9 million. Almanza was directly involved in fraudulent transactions that yielded over $2.5 million in loss.
Almanza was initially scheduled to be sentenced on April 30, 2010, but the sentencing was continued after she attempted to flee the country on April 27, 2010. Almanza used her sister’s passport and booked a flight from Reagan National Airport to Bolivia, with a layover in Miami. The FBI, with the assistance of the Fairfax County Police Department, located and arrested Almanza when her flight landed in Miami.
Litcia Linares, 33, of Falls Church, Va., was also sentenced today to 27 months in prison, followed by three years of supervised release, for her role as a real estate agent in the conspiracy. Linares was also ordered to pay restitution in the amount of $7,509,849. Linares pled guilty on Jan. 8, 2010. Linares was married to co-defendant Grovert Rojas during the time she was involved in the conspiracy. Linares collected several commission checks for work that she and her then-husband did as real estate agents on the fraudulent straw buyer transactions.
Almanza’s brother, Ruben Rojas, pled guilty on Dec. 22, 2009, for his role as a realtor in the conspiracy. Rojas was sentenced on May 7, 2010 to 60 months in prison. Ten straw buyers have also been charged for their involvement in the conspiracy. One of the straw buyers, Juan De La Cruz Aguayo, pled guilty on March 18, 2010. Aguayo is scheduled for sentencing on June 11, 2010.
This case was investigated by the Fairfax County and Miami-Dade County Police Departments and FBI’s Washington Field Office. Assistant United States Attorneys Charles Connolly and Marla Tusk prosecuted the case on behalf of the United States.

A 46-year-old Golden Valley man pled guilty earlier today in federal court in Minneapolis to orchestrating a mortgage fraud scheme that resulted in the theft of more than $2.5 million from lenders nationally. The scheme centered on obtaining fraudulent loans for the purchase of 24 homes in the Twin Cities. Appearing before United States District Court Judge Joan N. Ericksen, Zack Zafer Dyab pled guilty to one count of conspiracy to commit wire fraud and one count of money laundering in connection to the crime. Dyab was indicted along with Julia Alexander Rozhansky, age 46, of Minnetonka, on December 8, 2009.
In his plea agreement, Dyab admitted that from 2003 through early 2007, he conspired with Rozhansky and others to induce through fraudulent means numerous mortgage lenders throughout the U.S. to loan substantial sums of money to unindicted co-conspirators, who happened to be relatives of Rozhansky. Dyab also admitted stealing large amounts of loan proceeds for his personal use.
At the time, Dyab owned American Choice Lending, Inc., a mortgage brokerage company. Rozhansky was his assistant and had supervisory authority over the company’s loan officers and loan processors.
To further the fraud scheme, Dyab often arranged for straw buyers to purchase properties at inflated prices from him or companies he owned. In other instances, he had straw buyers purchase properties at inflated prices from third-party sellers. After those sales, Dyab and Rozhansky purportedly caused the sellers to pay them a portion of the sale proceeds. In addition, Dyab sometimes had a real estate broker receive so-called real estate commissions from the transactions, which the broker then would sign over to Dyab.
In each transaction, Dyab admitted submitting a mortgage loan application that greatly exaggerated the monthly income and bank account balance of the straw buyer. On occasion, he also deposited funds into the bank account of a straw buyer in an effort to trick the lender into believing that the buyer had substantial liquidity. In addition, Dyab routinely provided straw buyers with money to bring to transaction closings, to be passed off as “down payments.” Moreover, he led lenders to believe that the straw buyers intended to live in the homes they were purchasing, when, in fact, he knew they actually planned to sell the homes to third-party straw buyers within a year. The third-party straw buyers then would default on the mortgage loans.
On February 15, 2005, at the conclusion of one of these real estate transactions, Dyab obtained $63,938.94 in seller proceeds by forging the seller’s name on the back of the proceed check. He then deposited the check into his own bank account. Then, on February 17, 2005, Dyab used $15,000 of those funds to purchase a cashier’s check.
For his crimes, Dyab faces a potential maximum penalty of five years in prison on the conspiracy charge and ten years on the money laundering charge. Judge Ericksen will determine his sentence at a future hearing, yet to be scheduled. Rozhansky also pled guilty before Judge Ericksen today. She, too, will be sentenced at a future hearing.
This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney David J. MacLaughlin.

Defendant Convicted of Submitting Falsified Loan Applications to Obtain Mortgage Loans Totaling $5.5 Million

ALBUQUERQUE—United States Attorney Kenneth J. Gonzales announced that this afternoon, a federal jury convicted Albuquerque real estate agent Kevin Powers, 51, of 17 counts of wire fraud in connection with an unlawful scheme to defraud mortgage lenders and to obtain over $5.5 million in loan proceeds through false pretenses, misrepresentations, and omissions. At sentencing, Powers faces up to 20 years’ imprisonment and a maximum $250,000 fine on each count of conviction. Powers remains on release under pretrial supervision pending his sentencing hearing, which is scheduled for July 18, 2011.

Powers went to trial on an indictment that was filed on July 27, 2010 and charged Powers with 17 counts of wire fraud. According to the indictment, Powers devised a scheme to defraud various mortgage lenders and obtain their money or property by means of false or fraudulent representations. The indictment alleged that Powers submitted loan applications with false information, or caused such loan applications to be submitted, to mortgage lenders and concealed from the lenders that some of the loan proceeds would be returned to the buyers, largely to be used to make mortgage payments until the properties could be resold. Powers allegedly did this to get financing for the loans in residential real estate transactions, and caused others to use interstate wire communications facilities by having the loan proceeds wired from various lenders to the banks of the title companies. Although the indictment alleges 17 counts of wire fraud, the scheme involved only nine real estate transactions in Albuquerque occurring in 2006 and 2007, eight of which involved two loans. Because the loan proceeds were wired separately for each loan, each wire was charged as a separate count.

The evidence at trial established that, from March 2006 through April 2007, Powers was a real estate agent and broker. Initially, Powers was employed as the Albuquerque branch office manager for AAA Worldwide Mortgage, a mortgage brokerage company, but in late 2006, he formed his own mortgage brokerage company, Powers Mortgage. For all nine transactions charged in the indictment, Powers acted as both the realtor and mortgage broker for the buyers in that he represented them in buying the homes and he sought financing for them for the purchases. The buyers who participated in Powers’ scheme testified that Powers helped them invest in residential real estate in Albuquerque even though they had no money to invest by finding houses for them to buy with 100 percent financing. Powers returned approximately 20 percent of the loan proceeds, totaling approximately $1.2 million, to the buyers after closings, and they primarily used the money to make mortgage payments until the houses could be resold.

More specifically, the buyers testified that, after Powers identified a house to be purchased as part of the scheme, he told the seller that he had a buyer who wanted to undertake renovations and remodeling, and asked the seller to raise the sales price so it would include adequate funds for the improvements. After the seller raised the sales price, Powers obtained an appraisal at the higher price and submitted a loan application on behalf of the buyer. The loan application contained false information about the buyer’s income and the intended purpose of the purchase by falsely representing that the buyer was purchasing the house as a primary residence when in fact that buyer primarily was purchasing an investment property.

Bank officials testified that they relied on the falsified loan applications in deciding to finance the purchase of the houses. They said that they would not have approved the loans if they had known that the buyers’ income figures were significantly inflated and that the houses were being purchased as investments, and if they had known that cash kickbacks were being made to the buyers after closing. The evidence showed that all of the buyers ultimately defaulted on the residences purchased as part of Powers’ scheme because the resales did not cover the loans.

The jury deliberated for approximately five hours before returning a verdict of guilty on all counts.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Mary L. Higgins and George C. Kraehe.

RICHMOND, VA—Jodi D. Robinson, age 38, a Richmond realtor and owner of Citicorp Investments, a Virginia LLC, pled guilty today to a five-year mortgage loan fraud, in violation of Title 18, United States Code, Section 1341. Robinson is facing a sentence of 30 years in prison and a fine of $1 million dollars when she is sentenced by Chief United States District Judge James R. Spencer on July 31, 2011. Neil J. MacBride, United States Attorney for the Eastern District of Virginia; Kenneth R. Taylor, Special Agent in Charge of HUD’s Office of Inspector General; Keith Fixel, the Inspector in Charge of the Postal Inspection Service; and Michael Morehart, Special Agent in Charge of the FBI, announced today’s guilty plea.

Robinson admitted to obtaining 16 different fraudulent real estate loans in amounts totaling $2.4 million in a four-part scheme that defrauded Washington Mutual Bank; Sun Trust Bank; the Federal National Mortgage Association, known as Fannie Mae; the Federal Home Loan Mortgage Corporation, known as Freddie Mac; and the U.S. Department of Housing and Urban Development’s (HUD) Section 8 Rental Voucher program for needy individuals. The total loan losses were approximately $1.2 million. The total losses to HUD were approximately $105,000. Robinson is facing 30 years in prison and $1million in fines.

There were four overlapping parts of the scheme. First, on real estate transactions where Robinson was simply the real estate agent, she and her accomplices would misrepresent the creditworthiness of the borrowers in a wide variety of ways. A frequent misrepresentation on the loan applications related to the borrowers’ employment status and involved the overstatement of the monthly employment income.

The second part of the scheme related to real estate transactions in which Robinson was not merely an agent, but was buying and selling properties that she rented out. On these, she secretly used nominees or straw parties to purchase the rental properties using mortgage loans.

The mortgage loan applications were thus fraudulent in that they did not disclose (i) Robinson as the real party in interest, (ii) Robinson’s true creditworthiness, especially in concealing all the other loans for which she was secretly liable on other nominee transactions, and (iii) the fact that the properties were not owner-occupied. In addition, the financial information on the nominee borrowers was falsified to fraudulently enhance the buyers’ creditworthiness, in the same way as in the selling agent realty transactions.

A third part of the scheme was a fraud on the U.S. Department of Housing and Urban Development’s (HUD) Section 8 Rental Voucher program for needy individuals. After the nominee purchases were completed, Robinson, the nominee, maintained the ownership interest, paying the mortgage and managing the property. With many of the properties, Robinson applied with HUD to have herself and her properties qualified to participate in HUD’s subsidized rental program, making her eligible to receive tenant referrals and direct rental payments from HUD. In this process, Robinson induced HUD to transmit the rental subsidy directly to her. She then used to the money to make the monthly mortgage payments to the banks.

The fourth part of the scheme also related to the rental properties. To make more money on these properties, Robinson would “sell” the properties at a higher price to another nominee/straw party, who would fraudulently obtain another mortgage loan in the same way previously described. Robinson thereby obtained access to the proceeds of the new loan. Thus, as part of the sham sale, Robinson would take the proceeds of the new mortgage loan, payoff the existing mortgage loan (which was less than the new loan), pay the transactional expenses, and then convert the remainder of the money to herself.

The case was investigated by HUD’s Office of the Inspector General, the United States Postal Inspection Service, and the FBI, Richmond Division. Assistant United States Attorney David T. Maguire is prosecuting the case for the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.

HOUSTON—An 11-count sealed indictment charging conspiracy and wire fraud has been unsealed following the arrests of Claymon “Butch” Trammell, Michelle Trammell, and Jeannettea Williams, United States Attorney Tim Johnson announced today. Claymon Trammell operated real estate and home repair companies in the Houston area. Michelle Trammell, Claymon Trammell’s daughter, operated as a mortgage broker while Jeannettea Williams, Claymon Trammell’s wife, operated as a real estate agent.

Claymon Trammell, 59, of Manvel, Texas; Michelle Trammell, 37, of Katy, Texas; and Jeannettea Williams, 54, of Manvel, Texas, are charged for their alleged involvement in a scheme to defraud residential mortgage lenders out of loans totaling more than $2.5 million in connection with purchase money home loans. The three were arrested this morning without incident by FBI agents at their residences.

According to allegations in the indictment, the defendants paid individuals to use their names and credit on loan applications to buy residential properties and submitted fraudulent home repair and other invoices to pay themselves from the loan proceeds. Michelle Trammell allegedly filled out loan applications for the straw buyers and provided lenders with false information about borrowers’ employment, income, assets and intent to occupy the properties. Jeannettea Williams notarized borrower occupancy affidavits that borrowers intended to occupy the properties as primary residences, even though she and Claymon Trammell occupied two of the properties, according to the indictment.

The Indictment also provides notice to each defendant of the intent of the United States to forfeit their interest in the $2.5 million they allegedly obtained as a result of the mortgage fraud scheme.

The maximum penalty, upon conviction, for conspiracy and wire fraud affecting a financial institution is 30 years in prison and a $1 million fine.

The three defendants are expected to make their initial appearance today at 2:00 p.m. before United States Magistrate Judge Calvin Botley.

This case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Belinda Beek.

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.

TUCSON—U.S. Attorney Dennis K. Burke announced a federal grand jury in Tucson returned a six-count indictment against Scott Tyson, age 43, and Susan Levy, age 69, of Tucson, Arizona. The indictment charges the defendants with wire fraud and conspiracy to commit wire fraud.

According to the indictment, Levy, a licensed Arizona real estate agent, received approximately $1.2 million dollars in loans to purchase multiple real estate properties between February, 2006 and July, 2007. In obtaining her loans, Levy failed to disclose that she had purchased other properties during this time period and/or understated her liabilities, thus constituting a material omission of fact submitted to the lenders. Scott Tyson was the loan officer used by Levy in each of these transactions.

“The defendants conspired to obtain multiple mortgages based upon fraudulent representations. The goal of the conspiracy was to profit from either the commissions received from the loans or the future sale of the properties or ‘flip’,” said U.S. Attorney Dennis K. Burke. “This office is dedicated to prosecuting mortgage fraud related offenses and this indictment is another example of our partnership with the FBI to prosecute and hold industry insiders accountable.”

An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

“Arizona has been greatly impacted by all facets of mortgage fraud in the last few years,” said FBI Special Agent in Charge Nate Gray. “The indictment of Tyson and Levy illustrates the FBI’s commitment to investigate those within the mortgage industry who allegedly conspired to profit from mortgage fraud. The FBI will continue to make mortgage fraud a priority and will pursue those who participate in various mortgage fraud schemes.”

A conviction for conspiracy to commit wire fraud and wire fraud carries a maximum penalty of 20 years’ imprisonment, a $250,000 fine or both for each count. In determining the actual sentence, the judge will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

The investigation preceding the Indictment was conducted by the Federal Bureau of Investigation’s Mortgage Fraud Task Force. The prosecution is being handled by Assistant U.S. Attorney Jonathan Granoff of the U.S. Attorney’s Office for the District of Arizona in Tucson.

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that ANNA McELANEY, 38, a licensed real estate agent residing in Norwalk, pleaded guilty today before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport to one count of bank fraud stemming from her involvement in a “short sale” mortgage fraud scheme.

A short sale transaction involves a mortgage holder or lender entering into an agreement to release its mortgage or lien on real property in exchange for payment of less than the total amount owed on the underlying debt. Many short sale transactions are legitimate.

According to court documents and statements made in court, McELANEY worked with Sergio Natera, also a real estate agent, to defraud Regions Bank, which held two mortgages on a residential property in Bridgeport. On December 5, 2007, McELANEY, who was a listing agent for the property, received an offer to purchase the property for a price of $132,500. However, McELANEY and Natera subsequently directed communications to Regions Bank that the highest offer to purchase the property was for $102,375 by BOS Asset Management, LLC, an entity that Natera controlled. The bank agreed to a short sale of the property for the lower price, and released its mortgages on the property.

On June 9, 2008, Natera, through BOS Asset Management, sold the property for $132,500 to the original bidder on the property, and Natera and McELANEY retained the difference in the two sale prices.

McELANEY is scheduled to be sentenced by United States District Judge Janet C. Hall on May 10, 2010, at which time she faces a maximum term of imprisonment of 30 years, a fine of up to $1 million, and an order of restitution.

Natera pleaded guilty to one count of bank fraud on February 11, 2010. He awaits sentencing.

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

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

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