New York business attorneys-Washington Mutual target of $92 million mortgage fraud scam

Federal attorneys filed charges against 9 people for $92 million WaMu mortgage fraud scheme.

New York, NY(JusticeNewsFlash.com)–The U.S. Attorney’s Office in Brooklyn filed federal charges against, real estate developer Thomas Kontogiannis plus eight other defendants in U.S. District Court in Brooklyn, New York on Thursday. Reuters reported lawyers for the federal government charged nine persons with conspiracy to commit bank and wire fraud through an orchestrated $92 million mortgage fraud scheme aimed at Washington Mutual Bank and a subsidiary of Credit Suisse Group AG, DLJ Mortgage Capital Inc.

Agents with the U.S. Federal Bureau of Investigation (FBI) www.fbi.gov and prosecuting attorneys allege Kostogiannis used New York City property developments in Brooklyn and Queens to defraud Washington Mutual and Credit Suisse Group of $92 million through fraudulent loans. Federal court documents claim the nine defendants, charged with federal fraud, sold properties with values based on false appraisals to finance projects. The defendants were so blatant as to provide appraisals of properties not even built and listed fake addresses. Government lawyers say the real estate developer used loans, financed by lenders under their control, and then sold the bogus mortgage loans to Washington Mutual and DLJ. The defendants will be arraigned in U.S. District Court in Brooklyn before the judge, on Thursday afternoon, plus face additional charges of bank fraud and money laundering.

This is another legal and financial blow which has come to light recently since former Washington Mutual Bank (WaMu), now Washington Mutual Inc., was seized by the U.S. Office of Thrift Supervision (OTS) and placed into the hands of the Federal Deposit Insurance Corporation (FDIC) http://www.fdic.gov on September 25, 2008. A 10-day bank run, which resulted in $16.4 billion in withdrawals, caused the federal government to step in, take over, and then sell off the banking subsidiaries to JPMorgan Chase for a mere $1.9 billion. JPMorgan chase acquired the bank with $33 billion in assets, minus its unsecured debt or equity claims as outlined by Wiki. On September 26, 2008, the very next day, JPMorgan Chase filed for Chapter 11 bankruptcy protection in Delaware. Washington Mutual Bank was the largest United States’ savings and loan association, and its closure and receivership, by the federal government, remains the largest bank failure in American history. The United States District Court, for the District of Columbia, received a lawsuit filing by lawyers representing Washington Mutual Inc., on March 20, 2009, demanding $13 billion in damages. Business litigation attorneys representing WaMu accuse the OTC and FDIC with the unjustified seizure of the bank and the ridiculously low sale price to JPMorgan Chase as part of its legal complaint. The U.S. Federal Bankruptcy Court in Delaware, in turn, received a counterclaim by attorneys representing JPMorgan Chase.

JusticeNewsFlash.com news for New York bank fraud attorneys.

TRENTON, NJ—A Marlboro, N.J., real estate developer admitted today to his role in an investment fraud conspiracy which embezzled nearly $1 million raised in connection with purported commercial real estate developments in New Jersey, U.S. Attorney Paul J. Fishman announced.

Allen Weiss, 60, of Marlboro, pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud. Weiss entered his guilty plea before U.S. District Judge Anne E. Thompson in Trenton federal court.

According to the information to which the defendant pleaded guilty and statements made in court:

Weiss admitted that he conspired with others from January 2009 to February 2010 in a scheme to embezzle investment funds he raised in connection with purported commercial real estate developments. Weiss and his co-conspirators founded a series of holding corporations to solicit investments to develop commercial real estate, including professional services locations for physicians in Holdmel, Hazlet, and Neptune, N.J. Weiss admitted that he and his coconspirators embezzled nearly $1 million in investments funds contributed by victims toward the projects. He also admitted that he lied to those and other victims to raise additional funds, which Weiss and his co-conspirators spent on personal expenses. Weiss pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, for the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney André M. Espinosa of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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.

Defense counsel: Robert A. Honecker, Jr., Esq., Ocean, N.J.

NEWPORT NEWS, VA—Yvonne L. Robertson, 44, of Hampton, Va., was convicted late Wednesday afternoon by a federal jury of engaging in a mortgage fraud scheme.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement. Robertson faces a maximum penalty of 30 years on the conspiracy and mail and wire fraud counts, 10 years on the counts charging engaging in monetary transactions in property derived from unlawful activity, and 10 years on the false statement count.
Robertson was first indicted on Feb. 9, 2010, along with, Maria Henderson, 41, of Virginia Beach, Va., on charges of conspiracy to commit mail and wire fraud, as well as 11 separate mail and wire fraud counts. Joseph M. Garner, Jr., 49, of Virginia Beach, Va., was charged separately by criminal information on Feb. 8, 2010, with mail fraud. A superseding indictment, returned by a federal grand jury in May, 2010, added charges of engaging in monetary transactions in property derived from unlawful activity, as well as making materially false statements to an agent of the United States.
According to the superseding indictment, from November 2006 through May 2009, Robertson operated a real estate investment and property management business known as Angel’s Touch Real Estate Investments, LLC located in Virginia Beach, Va. In the course of business, Angel’s Touch would identify investment properties in the Tidewater area for purchase. Robertson signed contracts for the purchases but often assigned the contracts to other individuals (“strawbuyers) for purchase with promises that she would arrange for the down payment funds and closing costs, that she would then manage the properties by finding renters, collecting rental payments, and making mortgage payments, and that individuals would received cash back from loan proceeds of the property. Robertson caused false information to be presented to lenders in order to obtain the mortgage loans for the straw buyers. Robertson also failed to deliver on her promises to the borrowers, but fraudulently obtained proceeds from the closings for herself and her company. Robertson routed these proceeds, by wire transfer, into the accounts of various other individuals and, on one occasion, caused money returned to a strawbuyer to be given to Robertson through a cashier’s check.
Henderson was a loan officer for a number of companies engaged in mortgage brokering services, including Yourturn Finances and Mortgage Star, Inc. Henderson was responsible for taking mortgage loan applications and seeking a mortgage lender for which she received commissions based on the loans she processed. Garner submitted false mortgage documents, through Henderson, to purchase a property for Robertson indicating that he would be the primary occupant. Instead, following closing, the property was occupied by a renter. After a short period of time the property went into default and the renter was evicted.
Henderson pled guilty to conspiracy to commit mail and wire fraud on April 6, 2010, and was sentenced to 120 months imprisonment and ordered to pay restitution in the amount of $230,000.00. Garner pled guilty to a criminal information alleging mail fraud on March 16, 2010 and was sentenced to five years probation and ordered to pay $29,600.00 in restitution. Robertson is scheduled to be sentenced on March 22, 2011.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Brian J. Samuels and Special Assistant United States Attorney Eric Olshan prosecuted this case on behalf of 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.usdoj.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.

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