David B. Fein, United States Attorney for the District of Connecticut, announced that NATHAN RUSSO, 34, of Johnston, Rhode Island, pled guilty today before Chief United States District Judge Alvin W. Thompson in Hartford to one count of conspiracy to commit wire fraud stemming from his participation in a mortgage fraud conspiracy.

According to court documents and statements made in court, RUSSO and others engaged in a scheme to obtain millions of dollars in residential real estate loans, including loans insured by the Federal Housing Administration, through the use of sham sales contracts, false loan applications and fraudulent property appraisals.

RUSSO was a mortgage broker employed by Action Mortgage Corp., a licensed mortgage broker in Cranston, Rhode Island. In pleading guilty, RUSSO admitted that he acted as a mortgage broker for five residential property sales that closed in between April and September 2007. All but one of these properties were in Connecticut. RUSSO prepared loan packages for these transactions, including loan applications for the buyer, which he knew to include false information about the buyer’s employment, assets and liabilities and the buyer’s intention to occupy the property as his principal residence. The loan applications also were supported by false documentation, including earning statements and fraudulent bank records.

Judge Thompson has scheduled sentencing for April 4, 2011, at which time RUSSO faces a maximum term of imprisonment of five years and a fine of up to $250,000.

The investigation is ongoing.

This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General and is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines.

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; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General; and State of Connecticut Department of Banking.

To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

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.

Was a Fugitive for Almost a Year

BALTIMORE—Daniel E. Fink Jr., age 44, of Baltimore, who operated Homemaxx Title & Escrow LLC (Homemaxx), a title company that conducted residential real estate closings with offices in Middle River and Parkville, Maryland, pleaded guilty today to wire fraud in connection with a scheme to defraud lenders and homeowners of more than $2.2 million.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.

According to Fink’s plea agreement, from February 2003 to July 2004, Fink defrauded lenders, a title insurance company, and homeowners to obtain more than $2.2 million. Fink made arrangements for Homemaxx to act as the title company for real estate settlements and refinancing transactions. Lenders deposited funds in Homemaxx escrow accounts that Fink controlled. As part of the scheme, Fink caused title insurance to be issued to individuals purchasing or refinancing real estate, but concealed facts that negatively affected the buyers’ title in the real estate transactions. Fink also made misrepresentations to lenders in connection with transactions in which Fink acted as a party to the real estate transaction and handling the settlement on behalf of Homemaxx. For example, in a number of transactions, Fink represented to lenders that he was purchasing property and obtained a loan for that purpose. In fact, Fink purchased only the ground rent connected to that address and used the remainder of the loan for his personal benefit.

In addition, despite Fink’s representations to lenders that escrow funds were properly distributed after settlement, Homemaxx to failed to pay outstanding first mortgages on real estate transactions or to properly record deeds. Fink also improperly transferred substantial amounts of money from a Homemaxx escrow account into other accounts, and used the money intended to be disbursed pursuant to real estate closing documents for personal expenditures unrelated to real estate transactions.

Among other personal expenditures, Fink used the money to buy personal gifts for women, including over $200,000 of escrow money to purchase a property in Florida for a female acquaintance, and $59,728 to purchase a new 2004 Mercedes CLK 500 for a woman Fink knew from the Gentlemen’s Gold Club. Fink also used $61,965 to buy a 2003 Hummer H2, repeatedly spent the proceeds of his scheme at the Gentlemen’s Gold Club, on gambling, and on trips to Paradise Island, Bahamas.

In April 2004, Fink was confronted by representatives of the title insurance company about substantial amounts of money missing from the Homemaxx escrow account. Fink later fled the Baltimore area and used aliases to engage in real estate transactions in Florida. On March 26, 2009, a federal grand jury in Baltimore returned an indictment charging Fink with wire fraud and money laundering in connection with the scheme. Fink was arrested in Florida on February 15, 2010.

As part of his plea agreement, Fink is required to pay restitution in the full amount of the victims losses, estimated to be at least $2.2 million.

Fink faces a maximum sentence of 20 years in prison and a $250,000 fine for wire fraud, although if the court accepts the plea, Fink is expected to be sentenced to four years in prison. U.S. District Judge J. Frederick Motz has scheduled sentencing for June 17, 2011 at 11:00 a.m.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

United States Attorney Rod J. Rosenstein commended the FBI and the United States Attorney’s Office, Southern District of Florida for their assistance in the investigation and prosecution, and thanked Assistant United States Attorney Harry Gruber, who is prosecuting the case.

URBANA, IL—A Chicago-area man, Salvatore DiBenedetto, 52, of Downers Grove, appeared in federal court in Urbana today after his arrest on a 16-count indictment charging him with defrauding an Arcola, Illinois bank of approximately $2.5 million from April 2008 to February 2010. The indictment had remained sealed pending DiBenedetto’s arrest and court appearance. DiBenedetto was ordered detained in the custody of the U.S. Marshals Service pending a hearing scheduled on Apr. 12.

The indictment alleges that from April 2008 to February 2010, DiBenedetto and others engaged in a fraudulent real estate scheme that defrauded the Arcola Homestead Savings Bank of Arcola of approximately $2.5 million. According to the indictment, DiBenedetto was the president and shareholder of two businesses, Avanti Equity Group, LLC and X Factor LLC, both of Lombard, Ill. DiBenedetto allegedly represented that the businesses provided various mortgage services, including brokerage services, marketing, underwriting, and payment collection. During the period of the alleged scheme, DiBenedetto represented to the bank that he was performing mortgage management services on its behalf and for its benefit and the bank allowed DiBenedetto to perform activities related to the issuing of mortgages.

As part of the scheme, the indictment alleges DiBenedetto engaged in various false representations to owners of distressed residential and commercial properties to transfer the property to a third party who would obtain financing, rehabilitate the property and sell to interested buyers. The owners released their ownership of the properties and DiBenedetto recruited small business owners to buy various real estate in Chicago. DiBenedetto allegedly caused false representations to be made on loan applications and falsely represented to the title company that he was an authorized representative of the bank. Based on DiBenedetto’s false representations, the title company disbursed the funds to accounts controlled by DiBenedetto and another. DiBenedetto allegedly used loan proceeds to pay the expense of the properties and to convert the loan proceeds to his personal use and benefit.

The charges are the result of an investigation by the Federal Deposit Insurance corporation (FDIC); the Federal Bureau of Investigation; and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Elly M. Peirson.

If convicted, each offense of bank fraud (four counts); wire fraud (four counts); and making a false statement on a loan application (four counts) carries a maximum statutory penalty of up to 30 years’ imprisonment and a fine of $1,000,000. Each count of money laundering (four counts) carries a statutory maximum penalty of 10 years in prison.

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.

WASHINGTON—Noah Black, 42, of Hyattsville, Maryland, pled guilty today to federal charges of wire fraud and aggravated identity theft in connection with a mortgage fraud scheme, announced U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and David Beach, Special Agent in Charge, Washington Field Office, U.S. Secret Service.

Black entered his guilty pleas in U.S. District Court for the District of Columbia. The Honorable Judge Richard W. Roberts scheduled sentencing for June 16, 2011.

According to the factual proffer presented to the court, during May 2006, Black arranged a fraudulent real estate sale of a home in Upper Marlboro, Maryland that at one time was owned in the name of one of his family members. Black pretended to be another individual, referred to in court as “D.S.,” in order to secure mortgage loans of approximately $700,000. He had obtained the identifying information of D.S. when Black, a realtor, attempted to sell a different home to the victim.

In order to corroborate his alleged identity, Black had a fraudulent Maryland driver’s license created. The license combined Black’s own photo with the identifying information of the victim. He continued using the fraudulent identification when he obtained two motor vehicles by fraud later that year.

On or about May 18, 2006, as part of the settlement process on the home in Upper Marlboro and relying upon the defendant’s fraudulent representations, New Century Mortgage Corp., which is located in Reston, Virginia, sent a fax to Settlement Solutions, which is located in Maryland. After the sale was completed, the mortgage eventually went into default while it was listed as owned by D.S.

In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge McJunkin, and Special Agent in Charge Beach praised the outstanding work of the special agents who worked on the case from the FBI’s Washington Field Office and Secret Service. They also acknowledged the assistance of Paralegal Specialist Mary Treanor and Assistant United States Attorney Thomas E. Zeno, who prosecuted this case.

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

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

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

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

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

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

TRENTON, NJ—Barry Kantrowitz, 62, of Wayside, N.J., admitted today that he fraudulently concealed $82,100 in cash from a trustee appointed by the United States Bankruptcy Court, U.S. Attorney Paul J. Fishman announced.
Kantrowitz entered his guilty plea, to an Information charging him with one count of fraudulent concealment of assets from a United States Bankruptcy Trustee, before United States District Judge Joel A. Pisano in Trenton federal court.
According to the documents filed in this case and statements made in court:
Kantrowitz admitted that from February 2007 to March 2008, he held and concealed quantities of cash belonging to Solomon Dwek that were part of Dwek’s bankruptcy estate. Kantrowitz met Dwek on three separate occasions to give him cash, intending to conceal the monies from the trustee appointed to preside over Dwek’s bankruptcy proceeding. On March 13, 2007, Kantrowitz hid a plastic bag containing $75,100 in cash behind air conditioning units of Kantrowitz’s business office in Oakhurst, N.J. During two other meetings— held on September 12, 2007, and March 21, 2008, at prearranged locations in Monmouth County, N.J.—Kantrowitz delivered envelopes containing $5,000 and $2,000 in cash, respectively, to Dwek. Dwek, who was cooperating with the federal government at the time, secretly made consensual recordings of his meetings with Kantrowitz.
The charge to which Kantrowitz pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for February 23, 2011.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, with the investigation leading to today’s guilty plea. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Luis A. Valentin, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Christopher J. Gramiccioni of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Joseph A. Hayden, Esq., Roseland, N.J.

A 39-year-old woman from the central Minnesota city of Otsego pleaded guilty earlier today in federal court to participating in a mortgage fraud scheme that resulted in a $400,000 loss to several mortgage loan lenders. Appearing in St. Paul before United States District Court Judge Richard H. Kyle, Sharon Michelle Thomas pleaded guilty to one count of aiding and abetting mail fraud. Thomas was charged on June 7, 2010.

In her plea agreement, Thomas admitted that from 2005 through 2006 she assisted others in obtaining money through fraudulent pretenses by depositing 10 “closing packages” in the U.S. mail or with private commercial carriers. During this time, Thomas was a closing agent for a licensed title company, which was affiliated with a local builder and closed residential real estate transactions for the builder. Thomas provided documents to mortgage loan companies that were funding the mortgage loans for each residential transaction, after which the lenders would approve loans and provide loan proceeds to the title company. Thomas admitted concealing from the lenders payments she made to “investors” associated with Superior Investment Group (“SIG”) on 10 Minnesota properties. Thomas admitted receiving only her customary salary and small bonuses for closing the transactions.

SIG was owned and operated by Troy David Chaika, age 43, of Burnsville, and Dustin Lee LaFavre, age 27, of Webster, Minnesota. The two men conspired to obtain money fraudulently through approximately 183 residential property transactions that defrauded real estate mortgage lenders out of more than $7 million. LaFavre pleaded guilty to one count of conspiracy to commit mail and wire fraud and awaits sentencing. Chaika has been indicted on seven counts of wire fraud, three counts of mail fraud, and one count of conspiracy to commit wire fraud and mail fraud.

For her crime, Thomas faces a potential maximum penalty of 20 years in prison. Judge Kyle will determine her sentence at a future date, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney Tracy L. Perzel.