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September 23, 2013

Real Estate Agent and Developer/Loan Officer Sentenced for Mortgage Fraud

On September 23, 2013, in Tucson, Ariz., William Michael Naponelli was sentenced to 24 months in prison and ordered to pay $3.1 million in restitution. On September 20, 2013, Bryan Atwood was sentenced to 15 months in prison and ordered to pay approximately $585,000 in restitution. Naponelli pleaded guilty on December 20, 2012 to conspiracy to commit bank fraud and conspiracy to commit transactional money laundering. Atwood pleaded guilty on February 25, 2013, to conspiracy to commit wire fraud. According to court documents, Naponelli, a former real estate developer and loan officer, participated in a scheme to obtain various loans between July 2006 and May 2007. Naponelli and another co-conspirator purchased several properties using various business entities with which they were associated. They then sold these properties to straw buyers. As part of the loan approval process, Naponelli caused to be submitted documents that contained material false statements including representations that the borrowers would provide the down payment or cash to close the real estate transactions. After the fraudulently obtained loan proceeds were received, portions of these proceeds were wired or deposited into bank accounts controlled by Naponelli or another co-conspirator. Atwood, who at the time of this conspiracy was a licensed real estate agent, obtained three properties through fraudulently obtained loans. He knew that documents provided to the lenders on his behalf relating to these properties contained one or more material false representations. The properties obtained as a result of this mortgage fraud scheme went into foreclosure resulting in significant losses to the lenders. Previously, co-defendants Walter Scott Fruit and Sandra Jackson were each sentenced for their involvement in the conspiracy. Fruit, a licensed real estate agent, received 30 months in prison and Jackson, a former escrow agent, received six months in prison.

Posted By: Ralph Roberts @ 11:07 am | | Comments Off | Trackback |
Filed under: Arizona,Loan Fraud,Mortgage Fraud,Mortgage Fraud Scheme,Mortgage Loan Fraud,Real Estate Fraud,Straw Buyer,Wire Fraud

July 29, 2013

Arizona Man Sentenced in Mortgage Fraud Scheme

On July 29, 2013, in Phoenix, Ariz., Daniel Morar was sentenced to 60 months in prison, three years of supervised release and ordered to pay $222,784 in restitution. Morar pleaded guilty on April 16, 2013 to conspiracy to commit wire fraud. According to court documents, from July 1, 2006 through January 1, 2007, Morar and others conspired to use “straw buyers” to purchase multiple properties and to receive “cash back” following the closing of the real estate transactions. Morar and others directed the straw buyers to submit loan applications that falsely represented their assets, income, liabilities, source of down payments, and the intent to occupy the homes as their primary residences. Based on these false misrepresentations, lending institutions wired funds to close the real estate transactions. In fact, the straw buyers were unable to afford the multiple properties and would not be using any of the properties for their primary residences. Throughout the conspiracy, the cash back from at least 19 transactions were deposited into Morar’s bank accounts. For each transaction, the cash back was falsely represented on HUD-1 forms as funds for remodeling work. However, the remodeling work was either minimally completed or not done at all. The cash back was used for personal expenses. In addition, a portion of the cash back proceeds were wired to accounts in Romania controlled by family members.

May 30, 2011

Three Indicted in Multiple Mortgage Fraud Schemes Involving 13 Properties

PROVIDENCE, RI—A federal grand jury in Providence on Tuesday returned indictments against a loan officer and a loan processor employed at the same mortgage company, and a former Rhode Island attorney currently involved in the real estate industry in an alleged “straw borrowing” scheme that netted more than $3.5 million dollars in fraudulently obtained mortgages on 13 properties in five Rhode Island communities, it was announced by United States Attorney Peter F. Neronha.

The grand jury returned a 13-count indictment charging Juan Carlos Hernandez, 41, of West Warwick, R.I., a loan officer with National City Mortgage Company; Miguel Valerio, 51, of Providence, R.I., a loan processor with National City Mortgage Company; and James D. Levitt, 65, of Pawtucket, R.I., a former attorney who controlled two companies formed for the purpose of engaging in real estate transactions. The properties are located in Cranston, Central Falls, Coventry, Pawtucket, and Providence.

In addition, Levitt is named in a separate eight-count indictment alleging three counts of bank fraud, three counts of wire fraud, and two counts of tax fraud in connection with mortgage transactions in Providence separate from the conspiracies outlined in the indictment naming Levitt, Juan Carlos Hernandez, and Miguel Valerio.

The indictments allege that Juan Carlos Hernandez and Miguel Valerio conspired to recruit and pay “straw purchasers” to purchase properties they would not normally qualify to purchase, with the intent of taking control of the properties to collect rent on and to sell within a short period of time, and divide the profits among them. The “straw-borrowers” were paid various fees and were regularly advised by the defendants that they would not be responsible for the mortgages for which they were applying.

In addition, the indictment alleges that Hernandez, Valerio, and Levitt conspired to obtain “straw purchasers” to apply for and obtain mortgages on four properties in which the three had a financial interest.

A separate indictment alleges that James Levitt schemed to commit mail and wire fraud by obtaining mortgages on three properties which he expected to control, two of which were obtained in the name of an associate based on false and fraudulent information.

The cases are being prosecuted by Assistant U.S. Attorney Luis M. Matos.

The matters were investigated by the Federal Bureau of Investigation, U.S. Department of Housing and Urban Development Office of Inspector General, and Internal Revenue Service, Criminal Investigations.

An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

May 29, 2011

Former Real Estate Professionals Sentenced for Mortgage Fraud Scheme in Vallejo

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced that United States District Judge Morrison C. England, Jr. sentenced Ralondria Stafford, 37, of San Francisco, and Necole Ward, 32, of Las Vegas, (both formerly of Vallejo, Calif.) for their roles in a mortgage fraud scheme carried out in Vallejo between 2005 and 2006. Judge England sentenced Stafford to 21 months in prison and Ward to 12 months and a day in prison. The prison sentences are to be followed by three years of supervised release and both defendants were ordered to pay $200,000 in restitution. Stafford and Ward pleaded guilty on June 10, 2010.

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

According to court documents, Stafford and Ward, who are sisters, operated RN Realtors in Vallejo. Between July 2005 and August 2006, they used two straw buyers to purchase properties that they owned in Vallejo. They offered the buyers $5,000 for the use of their names and financial information, and told the buyers that the purchase would be in name only and that Stafford would purchase the properties back in six to 12 months.

In the course of the conspiracy, Stafford and Ward prepared “Uniform Residential Loan Application” forms in the straw buyers’ names containing false statements that included overstating of the straw buyer’s income, claiming false employment at employers, and misidentifying properties as a primary residence.

At sentencing, Judge England said that the sentences were driven by several justifications, including the need to punish the defendants for their acts of greed and to deter others who might be considering similar conduct. He also cited the fact that both defendants had real estate licenses at the time of their crimes and were therefore aware of the illegal nature of their fraud.

Judge England dismissed Stafford’s argument that she should be given a sentence of home confinement so as not to be separated from her 7-year-old son. Judge England told Stafford that had her child been her number one priority at the time she was considering breaking the law, she would not have gotten into trouble. “You made your choice,” said Judge England, “now I have to deal with it.”

In addressing Ward, Judge England noted that she was highly educated, with degrees from Swarthmore and the University of San Francisco, and her conduct in this case was extremely serious given that she knew that her conduct was illegal and her education made her more culpable than someone who could not appreciate fully the wrongfulness of her acts.

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

May 23, 2011

Hundreds Arrested in Mortgage Fraud Sweep

From industry insiders to straw buyers, nearly 500 people have been arrested in a nationwide mortgage fraud takedown that reflects the coordinated efforts of law enforcement to address the growing problem of crime in the housing industry.

“Mortgage fraud ruins lives, destroys families, and devastates whole communities,” Attorney General Eric Holder said this morning at a press conference to announce the results of “Operation Stolen Dreams.” Launched on March 1, 2010, the multi-agency initiative has led to a total of 485 arrests. More than 330 convictions have been obtained, and nearly $11 million has been recovered. Losses from a variety of fraud schemes are estimated to exceed $2 billion.
The subject identifies a house close to foreclosure. The straw buyer “purchases” the home, but immediately defaults on the mortgage by never making a payment. The subject goes to the lender and arranges a short sale — meaning the lender takes much less than is owed on the house. The lender never knew the short-sale (and resulting loss) were pre-meditated. The subject turns around and sells the house for full value

Operation Stolen Dreams is the government’s largest mortgage fraud takedown to date. But FBI Director Robert S. Mueller cautioned that there is still much work to be done. The Bureau is currently pursuing more than 3,000 mortgage fraud cases, he said, which is almost double the number from the last fiscal year.

“The staggering totals from this sweep highlight the mortgage fraud trends we are seeing around the country,” Attorney General Holder said. “We have seen mortgage fraud take on all shapes and sizes—from schemes that ensnared the elderly to fraudsters who targeted immigrant communities.”

A few examples:

In Miami yesterday, two people were arrested for targeting the Haitian-American community, claiming they would assist them with immigration and housing issues. Instead, they used victims’ personal information to produce false documents to obtain mortgage loans.
In California, a prominent home builder used straw buyers to sell his houses at inflated prices. The scheme inflated prices on other homes in the area, creating artificially high comparable sales and affecting the overall new-home market.
And in Detroit yesterday, FBI agents arrested several individuals in a $130 million scheme orchestrated by the local chapter of a motorcycle gang. The conspirators posed as mortgage brokers, appraisers, real estate agents, and title agents and used straw buyers to obtain around 500 mortgages on only 180 properties.

To combat the problem, the Bureau’s National Mortgage Fraud Task Force helps identify mortgage frauds such as loan origination schemes, short sales, property flipping, and equity skimming.
2009 Mortgage Fraud report
2009 Mortgage Fraud Report

In addition, we have 23 mortgage fraud task forces in “hot spots” around the country, from California and Texas to Florida and New York. Our investigators and analysts also participate in 67 working groups nationwide that share intelligence and industry data to identify emerging threats.

“FBI agents and analysts are using intelligence, enhanced surveillance, and undercover operations to identify emerging trends and to find the key players behind large-scale fraud,” Mueller said.

Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement and restitution for victims. Federal agencies participating included the Department of Housing and Urban Development, the Treasury Department, the Federal Trade Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, and the U.S. Secret Service. Many state and local agencies were also involved in the operation.

“From home buyers to lenders, mortgage fraud has had a resounding impact on the nation’s economy,” Mueller added. “Those who prey on the housing market should know that hundreds of FBI agents on task forces and their law enforcement partners are tracking down your schemes, and you will be brought to justice.”

May 20, 2011

Shaker Heights Man Sentenced for Role in Mortgage Fraud Scheme

A Shaker Heights man was sentenced to 18 months in prison for his role in a mortgage fraud scheme that involved more than two dozen properties, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today.

Beyond Wynn, age 37, pleaded guilty last year to conspiracy to commit wire fraud.

Wynn admitted selling properties, and profiting from those sales, to people he knew to be straw buyers, according to court documents.

This case was prosecuted by Assistant U.S. Attorney Mark S. Bennett following an investigation by the Cleveland Division of the Federal Bureau of Investigation.

May 19, 2011

Cinnaminson, New Jersey Man Pleads Guilty to Mortgage Fraud Scheme

CAMDEN, NJ—A New Jersey man admitted today to devising a mortgage fraud scheme causing lenders to release more than $1.2 million based on fraudulent mortgage loan applications, U.S. Attorney Paul J. Fishman announced.

John Fabey, 47, of Cinnaminson, N.J., pleaded guilty to an information charging him with wire fraud. He entered his guilty plea before U.S. District Judge Noel L. Hillman in Camden federal court.

According to documents filed in this case and statements made during Fabey’s guilty plea proceeding:

Fabey recruited a “straw buyer” to purchase numerous properties in New Jersey, including condominiums in coastal areas such as North Wildwood and Wildwood, as well as single-family residences throughout other parts of New Jersey. The straw buyer was an unsophisticated individual whom Fabey knew lacked financial resources to qualify for mortgage loans to purchase the properties. Fabey induced the straw buyer to purchase the properties by claiming that the properties would be good investments for the straw buyer and by promising that in exchange for purchasing them, the straw buyer would neither pay deposits or closing costs to acquire the properties, nor incur any personal expense for monthly mortgage payments after the straw buyer owned the properties.

Fabey caused fraudulent mortgage loan applications in the name of the straw buyer and supporting documents to be submitted to mortgage lenders. The mortgage loan applications were false in that they attributed to the straw buyer inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Fabey took the proceeds from the fraudulent mortgage loans by having funds wired into various accounts that he controlled. Fabey caused the mortgage lenders to release more than $1.2 million based on fraudulent mortgage loan applications.

The charge to which Fabey pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for August 26, 2011.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney R. Stephen Stigall of the United States Attorney’s Office Criminal Division in Camden.

Defense Counsel: Rocco C. Cipparone, Jr., Haddon Heights, N.J.

May 16, 2011

Mortgage Fraud Broker Pleads Guilty to Mortgage Fraud

GRAND RAPIDS, MI—Joseph Carr, 56, of Lansing, Michigan, pled guilty to one count of bank fraud, U.S. Attorney Donald A. Davis announced today. Carr admitted as part of his plea before U.S. Magistrate Judge Hugh W. Brenneman Jr. that he defrauded Bank of America by recruiting “straw buyers” to apply for a mortgage loan for a home that he himself intended to occupy, and inflated the value of that home in order to increase the amount of the loan. In this manner, he was able to secure a loan of $175,000 for his own use. In his plea agreement, Carr also acknowledged that other related fraudulent activities resulted in losses of $1,147,250.

Bank fraud is punishable by 30 years in prison and other penalties. Carr’s sentence will be imposed by U.S. District Judge Janet T. Neff at a date to be announced.

The case is being investigated by the Federal Bureau of Investigation as part of the Western District of Michigan’s Mortgage Fraud Task Force. This group was created to investigate and prosecute the growing number of mortgage fraud cases that have recently come to light. U.S. Attorney Davis stated, “Mortgage fraud has played a significant role in the mortgage crisis that has brought so much misery to Michigan citizens. Federal law enforcement will vigorously pursue the perpetrators of these frauds to face the punishment they have earned.”

Posted By: Ralph Roberts @ 10:51 am | | Comments Off | Trackback |
Filed under: Mortgage Fraud,Mortgage Fraud Scheme,Mortgage Loan Fraud,Straw Buyer

Mortgage Fraud Ring Faces Years in Prison, $1.2 Million in Restitution

Myron L. Hooker, Jr., 43, of Detroit, Peter Garland, 40, formerly of Southfield, Nicole Jackson, 38, formerly of Detroit and Antwan Mcrea, 35 of Detroit, were sentenced yesterday for obtaining fraudulent mortgage loans on numerous properties and splitting illegal proceeds in varying proportions among themselves announced United States Attorney Terrence Berg.

Berg was joined in the announcement by Andrew G. Arena, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation. United States Attorney Terrence Berg said, “We’re catching up with a lot of these mortgage fraudsters, and now they are starting to see the price to be paid for turning mortgage lending into a criminal enterprise. Mortgage fraud poses a significant threat to our economy. In prosecuting mortgage fraud we demonstrate the United States Attorney’s office and the FBI’s commitment and determination in holding perpetrators accountable for these crimes.”

Myron Hooker, the lead defendant in the case, was sentenced by the Honorable Julian Abele Cook, United States District Judge, to serve 63 months in federal prison on wire fraud charges, and 40 months for conspiracy to commit wire and mail fraud, the terms to be served concurrently.

The remaining defendants were convicted of conspiracy to commit wire and mail fraud and received the following sentences:

Peter Garland, was sentenced to serve 27 months in federal prison;
Antwan Mcrea, was sentenced to serve 24 months in federal prison;
Nicole Jackson, was sentenced to serve one day in federal prison, to be followed by three years supervised release and five months home confinement

In addition to their custodial sentences, Hooker, Garland, Jackson and Mcrea were ordered to pay, in various amounts, more than $1.2 million in restitution, $100 in special assessments per count of conviction and must serve two or three years of supervised release upon the completion of their custodial terms.

Information presented to the Court at the time of their pleas showed that Hooker conspired and agreed with the other defendants, to defraud and obtain money and funds from lending institutions, banks and individuals by obtaining fraudulent mortgage loans. Hooker orchestrated the fraud by coordinating and directing the activities of loan officers, straw buyers, collusive sellers, real estate appraisers, and closing agents, some of whom are also charged in the indictment. For instance, Hooker obtained falsely inflated appraisals on real estate and paid straw buyers to act as purchasers of the property. To bolster the straw buyer’s credit-worthiness, false income and asset documentation was provided by Hooker. Relying on the falsely inflated appraisals and fraudulent documentation, lending institutions approved and disbursed loans. These loans often subsequently went into default leaving the lending institutions with insufficient collateral and substantial losses, well in excess of $1,000,000.

U.S. Attorney Berg thanked the FBI for the successful investigation of the case.

May 14, 2011

Two Men Charged in Mortgage Fraud Scheme

David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury in Bridgeport has returned an indictment charging DOMINGOS DIAS, 41, of Trumbull, and HECTOR NATERA, 39, formerly of Bridgeport, with conspiracy, wire fraud, and bank fraud offenses stemming from their alleged involvement in a mortgage fraud scheme that has caused more than $3 million in losses to lenders. The indictment was returned on November 18, 2010, and was unsealed on May 11, 2011.

The indictment alleges that from approximately January 2006 to April 2008, DIAS, NATERA, and others conspired to obtain millions of dollars of fraudulent real estate loans from banks and real estate lenders for properties that were purchased in Bridgeport and New Haven. Working from offices located at 1944 Boston Avenue in Bridgeport, DIAS and NATERA held themselves out as real estate agents and mortgage brokers and recruited “straw buyers,” found sellers, and orchestrated and directed the creation and flow of fictitious documentation and information that were needed to obtain the fraudulent loans from lenders. After a loan for a property had been fraudulently obtained and a closing had occurred, DIAS and NATERA kept some of the fraud proceeds and distributed proceeds to other members of the conspiracy.

It is alleged that losses to mortgage lenders from this scheme total in excess of $3 million.

The indictment charges DIAS and NATERA with one count of conspiracy to commit wire fraud and bank fraud and one count of bank fraud. The indictment also charges DIAS with six counts and NATERA with four counts of wire fraud. Each of the charges carries a maximum term of imprisonment of 30 years and a fine of up to $1 million

DIAS was arrested on November 23, 2010. He had been released on bond until May 11 when U.S. Magistrate Judge Holly B. Fitzsimmons found that DIAS had violated the terms and conditions of his release and ordered the bond revoked and DIAS detained. The indictment was unsealed on that date.

NATERA is currently being sought by law enforcement. Citizens with information about this case, or any other suspected mortgage fraud activity, are encouraged to contact the Connecticut Mortgage Fraud Task Force at 203-333-3512, or by e-mail to ctmortgagefraud@ic.fbi.gov.

U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service. The case 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 is focusing on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes and short sale schemes.

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.

May 6, 2011

Investor Sentenced to 27 Months for Role in $4 Million Mortgage Fraud Scheme

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

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

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

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

Posted By: Ralph Roberts @ 9:57 am | | Comments Off | Trackback |
Filed under: Loan Fraud,Loan-Application Fraud,Mortgage Fraud,Mortgage Fraud Scheme,Straw Buyer,Wire Fraud

Fridley Man Sentenced for Defrauding Eight Mortgage Lenders of $1.9 Million

Earlier today in federal court in Minneapolis, a 50-year-old Fridley man was sentenced for defrauding eight mortgage lenders of $1.9 million. United States District Court Judge David S. Doty sentenced Taleb Mohamed Wazwaz to 24 months in prison on one count of conspiracy to commit mortgage fraud through the use of interstate wires. Wazwaz was charged via an information on April 19, 2010, and pleaded guilty on May 4, 2010.

In his plea agreement, Wazwaz admitted conspiring with others between May of 2005 and March of 2006 to defraud mortgage lenders by purchasing or causing others to purchase 12 Minneapolis properties at inflated prices and keeping much of the borrowed money for his own benefit or the benefit of others involved in the scam. To effect that fraud, Wazwaz himself purchased eight properties entirely with borrowed funds. In each instance, Wazwaz borrowed more money than the property’s true asking price, and in some instances, he caused the sellers to sign purchase agreement addenda that obligated them to pay him the differences between the amounts borrowed and the properties’ true asking prices. Those addenda were never disclosed to the lenders.

In three of those instances, Wazwaz induced the title companies to pay Iman Sun Properties, Inc., the difference between the amount borrowed and the property’s true asking price. Wazwaz, the sole owner of Iman Sun Properties, prompted those inducements by including promissory notes in the title files that reflected liabilities owed by the sellers to Iman Sun. In addition, he asserted that various sellers owed Iman Sun substantial sums for “property management.” Both the liability claims and management-fee claims were fictitious.

In some instances, Wazwaz also received down-payment assistance from an unindicted co-conspirator but failed to disclose that fact to potential lenders. Moreover, he often caused lenders to finance his purchases by supplying them with applications containing false information, including that he received rental income; that the property would be his primary residence; and that he had no other mortgage debt.

As a result of this fraud, Wazwaz collected directly or through Iman Sun Properties a total of $784,585.70. Then, after making only a few mortgage payments on these properties, he allowed them to go into default.

Wazwaz committed additional fraud by signing purchase agreements to buy homes from third parties for the true market values, but then he recruited straw buyers to purchase the properties for twice their values. Again the money was borrowed, with the loans being prompted by misrepresentations made by Wazwaz or others at his direction. In addition, Wazwaz induced the title companies involved in these transactions to pay him substantial “assignment fees.” This third-party fraud occurred in no fewer than four instances and resulted in Wazwaz obtaining a total of $1,141,395.80 for his own benefit and the benefit of his co-conspirators and the straw buyers. Again, within several months, the properties lapsed into default.

Specific to the charge filed in this action, Wazwaz caused $442,592.76 to be transferred by wire from a California lender to the bank account of a straw buyer on March 8, 2006. The money was later used to purchase one of the condo units.

This case was the result of an investigation by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney David J. MacLaughlin.

Posted By: Ralph Roberts @ 9:55 am | | Comments Off | Trackback |
Filed under: Mortgage Fraud,Mortgage Fraud Conspiracy,Mortgage Fraud Scheme,Mortgage Loan Fraud,Straw Buyer

May 3, 2011

NINE FLORIDA RESIDENT CHARGED IN VERSAILLES MORTGAGE FRAUD SCHEMES

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kimberly A. Lappin, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, Jeff Atwater, bannounced the return of two indictments and one superseding indictment involving mortgage fraud schemes relating to properties in the Versailles development in Wellington, Florida. Charged in at least one of the indictments are defendant Carl Alexander, 45, of Parkland, Florida; Carol Asbury, 59, an attorney, of Lake Worth, Florida; Patrick Brinson, 34, of Miami, Florida; David Lam, 42, a real estate broker, of Parkland, Florida; David Miller, 43, Miramar, Florida; Godfrey Myles, 42, former professional football player, of Miami, Florida; Michael Samuda, 38, an attorney, of Weston, Florida; Thomas Thelusma, 40, a firefighter, of Miami, Florida; and Victoria Wilson, 30, a mortgage broker, of Hollywood, Florida.

As alleged in all three indictments, the defendants used “straw buyers” to submit false documentation substantially inflating the purchase price of the properties to various mortgage lenders. As part of the conspiracy, double HUD-1 Settlement Statements were prepared. One set with the real price was provided to the seller and another set with the inflated price was provided to the lender. The difference between the real price and the inflated price was either made to appear as if it were a debt owed to business entities controlled by the defendants and their co-conspirators, or was made to appear as profits to the seller. The fraudulent loan proceeds were instead laundered through multiple accounts to conceal the source and distribution of the money and were ultimately used for the benefit of the defendants and their co-conspirators.

More specifically, in one of the indictments (11-CR-80033-KAM), defendants Asbury, Brinson, Lam and Myles were involved in a mortgage fraud scheme that generated more than $2.55 million in mortgage loans and approximately $488,000 in fraudulent loan proceeds involving two properties in the Versailles development in Wellington: 10638 Versailles Boulevard and 10515 Vignon Court. Asbury and Lam are also charged with a mortgage fraud scheme which generated an additional $2 million in mortgage loans and $785,000 in fraudulent loan proceeds involving Versailles properties 10284 Medicis Place and 10420 St. Germain Court. Defendants Asbury and Lam are charged with two counts of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and defendants Brinson and Myles are charged with one count. Defendants Asbury, Brinson and Myles are each charged with two counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and defendant Lam is charged with four counts. Defendants Asbury and Lam are also each charged with one count of mail fraud, in violation of Title 18 United States Code, Section 1341. Defendants Asbury, Brinson, and Myles are each charged with one count of making false statements on loan applications, in violation of Title 18, United States Code, Section 1001, and defendant Lam is charged in two counts. Each of the defendants are also charged with one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). Defendants Asbury and Lam are charged in three counts of money laundering, in violation of Title 18, United States Code, Section 1957, and defendants Brinson and Myles are charged in six counts.

In a second indictment (11-CR-80061-KAM), defendants Asbury, Alexander and Lam were charged for their involvement in a mortgage fraud scheme that generated more than $4.9 million in mortgage loans and approximately $1.8 million in fraudulent loan proceeds involving four Versailles properties: 10714 Versailles Boulevard, 3617 Royalle Terrace, 10293 Medicis Place, and 3554 Collonade Drive. Defendants Alexander, Asbury and Lam are charged with one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; nine counts of wire fraud, in violation of Title 18, United States Code, Section 1343; four counts of mail fraud, in violation of Title 18 United States Code, Section 1341; four counts of making false statements on loan applications, in violation of Title 18, United States Code, Section 1001; and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). In addition, defendants Alexander and Asbury are charged in thirteen counts of money laundering, in violation of Title 18, United States Code, Section 1957, and defendant Lam is charged in six counts.

The third indictment (11-CR-80057-KAM) charges defendants Lam, Miller, Samuda, Thelusma, and Wilson in a mortgage fraud scheme that generated more than $3.79 million in mortgage loans and approximately $1 million in fraudulent loan proceeds involving three Versailles properties: 10475 Trianon Place, 10460 Trianon Place, and 3483 Collonade Drive. All of the defendants are charged with one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; six counts of wire fraud, in violation of Title 18, United States Code, Section 1343; and one count of criminal forfeiture in violation of Title 18, United States Code, Section 981.

If convicted, the defendants face a maximum statutory sentence of 20 years in prison for the mail and wire fraud conspiracy, 20 years in prison for each of the mail and wire fraud counts, 20 years in prison for the money laundering conspiracies, 10 years in prison for each of the money laundering counts, and 5 years in prison for each of the false statement charges.

Mr. Ferrer commended the investigative efforts of the IRS Criminal Investigation Division, Department of Financial Services, FBI, FDLE, U.S. Secret Service, and the Palm Beach County Mortgage Fraud Task Force. The cases are being prosecuted by Assistant U.S. Attorneys Stephanie Evans, Ellen Cohen and Carolyn Bell.

May 1, 2011

Nine Charged in Three Indictments Concerning Versailles Mortgage Fraud Schemes

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kimberly A. Lappin, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, Jeff Atwater, Chief Financial Officer, Department of Financial Services, Amos Rojas, Jr., Special Agent in Charge, Florida Department of Law Enforcement (FDLE), Michael K. Fithen, Special Agent in Charge, U.S. Secret Service, and the Palm Beach County Mortgage Fraud Task Force, announced the return of two indictments and one superseding indictment involving mortgage fraud schemes relating to properties in the Versailles development in Wellington, Florida. Charged in at least one of the indictments are defendant Carl Alexander, 45, of Parkland, Florida; Carol Asbury, 59, an attorney, of Lake Worth, Florida; Patrick Brinson, 34, of Miami, Florida; David Lam, 42, a real estate broker, of Parkland, Florida; David Miller, 43, Miramar, Florida; Godfrey Myles, 42, former professional football player, of Miami, Florida; Michael Samuda, 38, an attorney, of Weston, Florida; Thomas Thelusma, 40, a firefighter, of Miami, Florida; and Victoria Wilson, 30, a mortgage broker, of Hollywood, Florida.

As alleged in all three indictments, the defendants used “straw buyers” to submit false documentation substantially inflating the purchase price of the properties to various mortgage lenders. As part of the conspiracy, double HUD-1 Settlement Statements were prepared. One set with the real price was provided to the seller and another set with the inflated price was provided to the lender. The difference between the real price and the inflated price was either made to appear as if it were a debt owed to business entities controlled by the defendants and their co-conspirators, or was made to appear as profits to the seller. The fraudulent loan proceeds were instead laundered through multiple accounts to conceal the source and distribution of the money and were ultimately used for the benefit of the defendants and their co-conspirators.

More specifically, in one of the indictments (11-CR-80033-KAM), defendants Asbury, Brinson, Lam and Myles were involved in a mortgage fraud scheme that generated more than $2.55 million in mortgage loans and approximately $488,000 in fraudulent loan proceeds involving two properties in the Versailles development in Wellington: 10638 Versailles Boulevard and 10515 Vignon Court. Asbury and Lam are also charged with a mortgage fraud scheme which generated an additional $2 million in mortgage loans and $785,000 in fraudulent loan proceeds involving Versailles properties 10284 Medicis Place and 10420 St. Germain Court. Defendants Asbury and Lam are charged with two counts of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and defendants Brinson and Myles are charged with one count. Defendants Asbury, Brinson and Myles are each charged with two counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and defendant Lam is charged with four counts. Defendants Asbury and Lam are also each charged with one count of mail fraud, in violation of Title 18 United States Code, Section 1341. Defendants Asbury, Brinson, and Myles are each charged with one count of making false statements on loan applications, in violation of Title 18, United States Code, Section 1001, and defendant Lam is charged in two counts. Each of the defendants are also charged with one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). Defendants Asbury and Lam are charged in three counts of money laundering, in violation of Title 18, United States Code, Section 1957, and defendants Brinson and Myles are charged in six counts.

In a second indictment (11-CR-80061-KAM), defendants Asbury, Alexander and Lam were charged for their involvement in a mortgage fraud scheme that generated more than $4.9 million in mortgage loans and approximately $1.8 million in fraudulent loan proceeds involving four Versailles properties: 10714 Versailles Boulevard, 3617 Royalle Terrace, 10293 Medicis Place, and 3554 Collonade Drive. Defendants Alexander, Asbury and Lam are charged with one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; nine counts of wire fraud, in violation of Title 18, United States Code, Section 1343; four counts of mail fraud, in violation of Title 18 United States Code, Section 1341; four counts of making false statements on loan applications, in violation of Title 18, United States Code, Section 1001; and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). In addition, defendants Alexander and Asbury are charged in thirteen counts of money laundering, in violation of Title 18, United States Code, Section 1957, and defendant Lam is charged in six counts.

The third indictment (11-CR-80057-KAM) charges defendants Lam, Miller, Samuda, Thelusma, and Wilson in a mortgage fraud scheme that generated more than $3.79 million in mortgage loans and approximately $1 million in fraudulent loan proceeds involving three Versailles properties: 10475 Trianon Place, 10460 Trianon Place, and 3483 Collonade Drive. All of the defendants are charged with one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; six counts of wire fraud, in violation of Title 18, United States Code, Section 1343; and one count of criminal forfeiture in violation of Title 18, United States Code, Section 981.

If convicted, the defendants face a maximum statutory sentence of 20 years in prison for the mail and wire fraud conspiracy, 20 years in prison for each of the mail and wire fraud counts, 20 years in prison for the money laundering conspiracies, 10 years in prison for each of the money laundering counts, and five years in prison for each of the false statement charges.

Mr. Ferrer commended the investigative efforts of the IRS Criminal Investigation Division, Department of Financial Services, FBI, FDLE, U.S. Secret Service, and the Palm Beach County Mortgage Fraud Task Force. The cases are being prosecuted by Assistant U.S. Attorneys Stephanie Evans, Ellen Cohen and Carolyn Bell.

An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty.

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

April 28, 2011

Two Members of Wide-Ranging Mortgage Fraud Conspiracy Sentenced

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.

Posted By: Ralph Roberts @ 9:18 pm | | Comments Off | Trackback |
Filed under: Mortgage Fraud,Mortgage Fraud Conspiracy,Mortgage Fraud Scheme,Real Estate Agent,Real Estate Fraud,Straw Buyer

Golden Valley Man Pleads Guilty to Mortgage Fraud Scheme

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.

April 27, 2011

Press Conference Announcing Mortgage Fraud Indictments and Creation of the Southern Nevada Mortgage Fraud Task Force

As evidenced by these announced arrests and indictments, mortgage fraud is a significant crime problem in Nevada. Mortgage fraud has likely accelerated the recent decline in the Las Vegas housing market. As of February 2008, Nevada was the top state in the nation for investor-owned mortgage defaults.

While the vast majority of practioners are honest, mortgage fraud schemes are being orchestrated by individuals within the industry such as: mortgage bankers/brokers, loan officers, realtors, title/escrow officers, appraisers, and other industry related personnel. These schemers have contributed significantly to the demise of the real estate market in Las Vegas and have inflated entire new developments by establishing bogus comparatives. For example, the schemers utilize straw buyers or stolen identities to flip the houses between each other. The schemers make payments on the properties for a short period of time and then allow the house to go into foreclosure. This establishes inflated comps which are used within the real estate industry to establish appraisal values. The end result is that home buyers purchase properties in communities that are greatly over valued, and they are then unable to sell or re-finance the property, eventually leading to foreclosure. The lending institution or the federal government is left to suffer massive economic losses.

To combat this criminal activity, the Las Vegas Division of the FBI has created the Southern Nevada Mortgage Fraud Task Force, which is housed in FBI office space. The following law enforcement partners have allocated investigators to this task force: the Las Vegas Metropolitan Police Department, Internal Revenue Service-Criminal Investigation, the Housing and Urban Development and Social Security Administration-OIGs, United States Postal Inspection Service, and the Nevada Attorney General’s Office. Further, the United States Attorney’s Office has designated an Assistant United States Attorney to work full time on task force matters.

The Las Vegas FBI has an excellent working relationship with each of these participating agencies, and we continue to look forward to leveraging each agency’s strengths to combat mortgage fraud.

A telephone hotline has been established to receive complaints concerning potential mortgage fraud. The telephone number is 702-584-5555.

April 25, 2011

Former Las Vegas Resident Charged with Committing Mortgage Fraud in Nevada

LAS VEGAS—A former Las Vegas resident has been charged with federal conspiracy and fraud charges for his involvement in a Nevada mortgage fraud scheme involving straw buyers and falsified mortgage loan documents, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Brian K. Jackson, 38, currently of Anaheim, California, was indicted by the Federal Grand Jury in Las Vegas on October 21, 2009, and charged with Conspiracy to Commit Bank Fraud, Mail Fraud, and Wire Fraud. On Tuesday, November 10, 2009, Jackson was arrested in the Los Angeles area, and appeared before a U.S. Magistrate Judge there and was released on a $50,000 surety bond. Jackson is scheduled to be arraigned by U.S. Magistrate Judge George W. Foley in Las Vegas on Friday, November 20, 2009, at 8:30 a.m.

The Indictment alleges that from about 2002 to May 14, 2008, Jackson, owner of Unlimited Properties, a now-revoked Nevada limited liability corporation, participated in a conspiracy to defraud financial institutions by causing money from mortgage loans to be diverted to his own use and benefit. Jackson solicited and paid persons (straw buyers) to apply for mortgage loans in their name. The loans were processed through Sapphire Mortgage, located in Henderson, Nevada. Jackson caused false and fraudulent information to be placed in the straw buyers’ mortgage loan applications concerning their employment, income, assets, intent to occupy property, etc. Jackson caused the same home to be purchased multiple times by different straw buyers at ever increasing prices. Jackson caused the “equity” to be diverted to himself personally or his company, Unlimited Properties. Jackson also placed renters in the properties, and caused the mortgages to default.

The Indictment specifically discusses several transactions involving a home located at 2061 Scenic Sunrise Drive in Las Vegas. Between March 2002 and late 2004, Jackson twice orchestrated the sale of the property using two straw buyers and the placement of false information in their loan applications. In June 2004, Jackson also orchestrated the sale of the Scenic Sunrise property to himself and falsely stated in his loan application that he intended to reside in the property when he knew he did not. During this period, Jackson also leased the Scenic Sunrise property to another individual and accepted money from the individual as guarantee that he would purchase it in the future, even though Jackson knew that the property at the time was owned by the first straw buyer and was in the process of being sold to the second straw buyer. The indictment alleges that Jackson or his company received about $179,000 from these fraudulent transactions.

In May 2008, the owner of Sapphire Mortgage, Cindy Birkland, was arrested and charged in state court in Las Vegas with mortgage fraud related offenses. If convicted, Jackson faces up to 30 years in prison and a $1,000,000 fine.

This investigation is being led by IRS Criminal Investigation and the FBI, and other agencies of the Southern Nevada Mortgage Fraud Task Force, including the Las Vegas Metropolitan Police Department, the Nevada Attorney General’s Office, Office of the Inspector General for the Social Security Administration, Office of the Inspector General for the Department of Housing and Urban Development, the U.S. Postal Inspection Service, and the U.S. Secret Service. The case is being prosecuted by Assistant United States Attorney Brian Pugh. Persons who have information concerning potential mortgage fraud may contact the Southern Nevada Mortgage Fraud Hotline at (702) 584-5555.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

April 19, 2011

Federal Mortgage Fraud Charges Filed Against Owner and Employees of Former Nevada Investment Companies

LAS VEGAS—A man who owned and operated numerous now-defunct Nevada investment companies, and two of his former employees, were indicted by the federal grand jury today on mortgage fraud charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Brett Depue, 36, a former resident of Las Vegas, but currently a resident of Gilbert, Arizona, Brian Barney, 36, of Fairfield, California, and Maria Ornelas, 32, of Las Vegas, are charged with conspiracy to commit bank fraud, mail fraud, and wire fraud, 11 counts of wire fraud, and criminal forfeiture.

Warrants have been issued for the arrests of Depue and Barney. Ornelas was summoned, and is scheduled for an initial appearance before a United States Magistrate Judge in Las Vegas on Friday, March 26, 2010, at 8:30 a.m.

The Indictment alleges that from about February 1, 2005, to May 31, 2007, in Nevada and elsewhere, the defendants participated in a mortgage fraud conspiracy in which they used “third party disbursements” and “double escrow” methods to fraudulently obtain monies from the financial institutions. A third party disbursement is the issuance of money at the closing of a mortgage loan to a person or entity that is not typically entitled to the money. A double escrow is where two sales of the same property are conducted at the same time. Typically, the property is sold to a middleman, who then sells the property to a straw buyer at a substantially inflated price. The difference between the first sale price and second price is distributed to a conspirator as seller proceeds. The paperwork on the second sale is concealed from the seller, and the paperwork on the first sale is concealed from the lender.

Brett Depue operated a number of Nevada businesses including, ABS Investments Group, LLC, Liberty Group Investments, LLC, and a number of other companies registered with the Nevada Secretary of State. Depue employed Brian Barney, Maria Ornelas, and a number of others who allegedly assisted in the mortgage fraud conspiracy. The defendants recruited home owners in the Las Vegas area and elsewhere who agreed to sell their property at a price substantially above the asking price. The home owners were told that the difference would go to Depue for improvements. The defendants then recruited straw buyers to apply for mortgage loans to purchase the homes using false and fraudulent information concerning the straw buyers’ income, assets, employment, and intent to occupy the homes. In some instances, the defendants had the straw buyers apply for mortgages for more than one house at a time and concealed from the lenders that they were purchasing more than one property.

The Indictment specifically discusses 17 homes in Las Vegas and Henderson which were purchased fraudulently between April 2005 and April 2007 at the direction of and for the benefit of the defendants.

If convicted, the defendants face up to 30 years in prison and a $1,000,000 fine on each count, and may be required to forfeit up to $8.5 million in properties or proceeds from the crimes.

This investigation is being led by the FBI, IRS Criminal Investigation, and other agencies of the Southern Nevada Mortgage Fraud Task Force, including the U.S. Postal Inspection Service, Office of the Inspector General for the Department of Housing and Urban Development, the U.S. Secret Service, the Las Vegas Metropolitan Police Department, the Nevada Attorney General’s Office, and Office of the Inspector General for the Social Security Administration. The case is being prosecuted by Assistant United States Attorney Brian Pugh.

Persons who have information concerning potential mortgage fraud may contact the Southern Nevada Mortgage Fraud Hotline at (702) 584-5555.

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

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

April 10, 2011

Federal Grand Jury Indicts Five Defendants in Mortgage Fraud Scheme

Defendants Allegedly Fraudulently Obtained Nearly $22 Million in Loan Proceeds

DALLAS—A 29-count indictment, returned last week by a federal grand jury in Dallas and unsealed this week, charges five individuals with various felony offenses related to a mortgage fraud scheme they ran for nearly three years in the Dallas-Fort Worth area, announced U.S. Attorney James T. Jacks of the Northern District of Texas (NDTX).

The indictment charges Michael Anthony Baker, 31, presently of Houston, Texas; Monique Untae Stallworth, 37, of Garland, Texas; Sterling Wesley Harris, 29, of Dallas; Koreem Dujuan Baker, 34, of Dallas; and Folami Dayo Baker, 36, of Desoto, Texas; each with one count of conspiracy to commit wire fraud. Michael Baker was a Dallas resident at the time of the alleged fraud. Michael and Koreem Bakers are brothers.

Harris appeared earlier this week before U.S. Magistrate Judge Irma C. Ramirez for his initial appearance and was released on personal recognizance bond. Michael Baker, Stallworth, and Folami Baker are expected to surrender within a few days. Koreem Baker is currently in state custody and is expected to be transported to the NDTX within the next few weeks.

The indictment alleges that the defendants operated a mortgage fraud conspiracy from December 2004 until at least October 2007 to defraud and obtain money from lending institutions by, among other things, using straw buyers to purchase homes by submitting false and fraudulent documents and statements to lenders. In total, the indictment alleges that the defendants obtained nearly $22 million in fraudulently obtained loan proceeds.

In addition, all of the defendants are charged with multiple substantive counts of wire fraud. Michael Baker is charged with one count of money laundering, and Koreem Baker is charged with 16 counts of engaging in a monetary transaction with criminally derived property.

The indictment alleges that the defendants profited from loans to purchase residences in the Dallas area; fraudulently obtained mortgages in others’ names; fraudulently obtained mortgages for more than the sales price; fraudulently found individuals with sufficient credit to qualify for the loans; fraudulently made each borrower appear to be a qualified, bona fide purchaser who intended to reside in the property, when the borrower had no intention of doing so; fraudulently created surplus loan proceeds by creating bogus invoices for repairs/upgrades which were never done; fraudulently allowed the residences to go into foreclosure after no, or just a few, payments were made on the loan; and fraudulently shared in the surplus loan proceeds.

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. For more information about the task force visit: www.stopfraud.gov.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy to commit wire fraud count and each of the substantive wire fraud counts carries a maximum statutory sentence of 20 years in prison and a $250,000 fine. The money laundering count carries a maximum statutory sentence of 20 years in prison and a $500,000 fine, upon conviction. Each of the counts charging engaging in a monetary transaction with criminally derived property carries a maximum statutory sentence of 10 years in prison and a $250,000 fine, upon conviction. The indictment also includes a forfeiture allegation which would require any convicted defendant to forfeit to the U.S. proceeds or property traceable to their offenses.

The case is being investigated by the Internal Revenue Service – Criminal Investigation and the FBI. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.

Posted By: Ralph Roberts @ 10:57 pm | | Comments Off | Trackback |
Filed under: Lending,Loan Fraud,Mortgage Fraud,Mortgage Fraud Scheme,Mortgage Loan Fraud,Straw Buyer,Wire Fraud
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