The list of resources below has been compiled for anyone that suspects that they may be a victim of real estate or mortgage fraud or scam. The list was originally designed as a resource to report mortgage fraud, predatory lending scams and identity theft in Florida but may also serve those who are victims of many types of fraud in Florida. Other types of fraud may include:

Internet Scams
Phishing/Email Scams
Credit Card Fraud
Investment Fraud
Financial – Debt Elimination
Business/MLM Scams
Etc.

FBI Field Offices, Mortgage Fraud

White Collar Crime Supervisor

http://jacksonville.fbi.gov/

7820 Arlington Expressway, Suite 200
Jacksonville, FL 32211-7499
Phone: (904) 721-1211

White Collar Crime Supervisor

http://miami.fbi.gov/

16320 NW 2nd Ave.
North Miami Beach, FL 33169-6508
Phone: (305) 944-9101

White Collar Crime Supervisor

http://tampa.fbi.gov/

500 Zack St., Room 610, FOB
Tampa, FL 33602-3917
Phone: (813) 273-4566

Florida Attorney General – Consumer Protection

http://myfloridalegal.com/consumer

The Capitol PL-01
Tallahassee, FL 32399-1050
Phone: (850) 414-3300

HUD Field Office

Jacksonville Field Office
Charles E. Bennett Federal Building
400 W. Bay St., Suite 1015
Jacksonville, FL 32202
Phone: (904) 232-2627
Fax: (904) 232-3759

Miami Field Office
909 SE First Ave.
Miami, FL 33131
Phone: (305) 536-4456
Fax: (305) 536-5765

Orlando Field Office
3751 Maguire Blvd., Room 270
Orlando, FL 32803-3032
Phone: (407) 648-6441
Fax: (407) 648-6310

Tampa Field Office
500 Zack St., Suite 402
Tampa, FL 33602
Phone: (813) 228-2026
Fax: (813) 228-2431

HUD Regional Office

Atlanta Regional Office
40 Marietta St.
Five Points Plaza
Atlanta, GA 30303-2806
Phone: (404) 331-4111
Fax: (404) 730-2392

Florida Department of Banking and Finance Division of Financial Investigations

101 East Gaines St., Suite 516
Tallahassee, FL 32399-0350
Toll Free: (800) 848-3792 (Florida only)
Phone: (850) 410-9275
Fax: (850) 410-9628

Nationally Chartered Credit Unions

Region III – Atlanta

http://www.ncua.gov/

7000 Central Parkway, Suite 1600
Atlanta, GA 30328
Phone: (678) 443-3000
Fax: (678) 443-3020

State-Chartered Credit Unions

Florida Division of Banking
101 East Gaines St., Ste. 636
Tallahassee, FL 32399-0350
Phone: (850) 410-9111
Fax: (850) 410-9548

Savings & Loan Association or Savings Bank

Office of Thrift Supervision

http://www.ots.treas.gov/resultsort.cfm?catNumber=88&dl=17&edit=1

E-mail: consumer.complaint@ots.treas.gov
Southeast Region – Atlanta
1475 Peachtree St., N.E.
Atlanta, Georgia 30309
Phone: (404) 888-0771
Complaints: (800) 842-6929

National Fair Housing Alliance

To locate your local office:

http://www.nationalfairhousing.org

National Contact: E-mail: nfha@nationalfairhousing.org
1212 New York Ave., NW Ste 525
Washington, DC 2005
Phone: (202) 898-1661
Fax: (202) 371-9744

Florida Department of Agriculture and Consumer Services

Division of Consumer Services
2005 Apalachee Parkway
Terry Rhodes Building
Tallahassee, FL 32399-6500
Phone: 1-800-HELP-FLA (435-7352)

Florida Real Estate Commission (REC) Home Page

DBPR Customer Contact Center

http://www.myflorida.com

Disciplinary Activity Reports of Brokers and Appraisers:

http://www.myflorida.com

1940 North Monroe St.
Tallahassee, FL 32399-1027
Phone: (850) 487-1395
Fax: (850) 922-4191

Better Business Bureaus

Better Business Bureau of Northeast Florida

http://www.bbbnefla.org

E-mail: info@bbbnefla.org
4417 Beach Blvd., Suite 202
Jacksonville, FL 32207
Phone: (904) 721-2288
Fax: (904) 721-7373

Better Business Bureau Serving Southeast Florida and the Caribbean

http://www.bbbsoutheastflorida.org

E-mail: info@seflorida.bbb.org
2924 N Australian Ave.
West Palm Beach, FL 33407 –
Phone: (561) 842-1918
Fax: (561) 845-7234

Better Business Bureau of West Florida

http://www.clearwater.bbb.org

E-mail: info@bbbwestflorida.org
PO Box 7950
Clearwater, FL 33758 -7950
Phone: (727) 535-5522
Fax: (727) 539-6301

Better Business Bureau of Northwest Florida

http://www.nwfl.bbb.org

E-mail: info@nwfl.bbb.org
PO Box 1511
Pensacola, FL 32591 -1511
Phone: (850) 429-0002
Fax: (850) 429-0006

Better Business Bureau of Central Florida, Inc.

http://www.orlando.bbb.org

E-mail: info@orlando.bbb.org
151 Wymore Road, Ste. 100
Altamonte Springs, FL 32714 -
Phone: (407) 621-3300
Fax: (407) 786-2625

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

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

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

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

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

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

LOS ANGELES—A Buellton man was sentenced today to 21 months in federal prison for defrauding banks by nearly simultaneously seeking home equity lines of credit from four different federally insured financial institutions.

Larry P. Corbi Jr., 36, who resided in Marina del Rey during the course of the scheme and has since relocated to the Central Coast, was sentenced by United States District Judge Dale S. Fischer. In addition to the prison term, Judge Fischer ordered Corbi to pay $356,644 in restitution.

Corbi pleaded guilty in November to one count of bank fraud, admitting that he fraudulently filed four applications for home equity lines of credit (HELOCs) over a two-week period in 2008. According to a plea agreement filed in this case, Corbi bought a $620,000 home in the Granada Hills district of Los Angeles in November 2007. In March 2008, Corbi applied for four HELOCs in amounts ranging from $122,000 to $191,000 from Washington Mutual Bank, GMAC ResCap, Countrywide Bank F.S.B., and Metlife Bank/PHH Mortgage Corporation. Corbi concealed from each financial institution that he was concurrently applying for other HELOCs that would also be secured by the Granada Hills home. Three of the four HELOCs were approved and funded.

In total, Corbi obtained $672,144 in loan proceeds, which included $200,000 he borrowed to purchase the Granada Hills home. When the home went into foreclosure, the banks that had loaned money to Corbi suffered losses totaling $356,644.

The case against Corbi was investigated by the Federal Bureau of Investigation.

MINNEAPOLIS—Earlier today in federal court in St. Paul, a jury convicted a 44-year-old Burnsville man of conspiring with others to bilk mortgage lenders out of more than $43 million. Following a six-day trial, the jury found Troy David Chaika guilty on seven counts of wire fraud, three counts of mail fraud, and one count of conspiracy to commit wire fraud and mail fraud. Chaika was indicted on April 12, 2010.

The indictment filed in this case and the evidence presented at trial indicated that between 2005 and 2008, Chaika conspired with others, including Dustin Lee LaFavre, prosecuted in a separate action, to obtain money fraudulently through over 100 residential property transactions. To further this scheme, Chaika and LaFavre negotiated with builders of new properties as well as owners of existing properties to buy both single pieces of property and property groupings, known as “bulk purchases,” at greatly reduced prices. Chaika and LaFavre then solicited real estate purchasers by promising they would receive large cash pay-outs, or “kickbacks,” from lenders’ funds.

Chaika and LaFavre failed to tell potential buyers about the reduced prices they had negotiated for the properties, choosing instead to quote them the grossly inflated prices. By charging buyers the higher prices, Chaika and LaFavre acquired enough cash from loan proceeds to pay buyers their kickbacks and still have money left for themselves and their co-conspirators. Once a potential buyer was recruited through this scheme, Chaika and LaFavre, or someone working on their behalf, drafted a purchase agreement that reflected the inflated sale price only and failed to disclose to lenders the kickback amount to the buyer. Occasionally, Chaika, LaFavre, or someone working for them drafted a so-called addendum to the purchase agreement, setting forth the planned kickback, or “pay-out,” to the buyer, but that document was never provided to the lender.

In several instances, Chaika and LaFavre, or others on their behalf, worked with buyers and mortgage loan officers to prepare false documents for use in the application process. In addition, Chaika and LaFavre sometimes loaned buyers money for down payments or to pad their bank balances while the application process was pending. Because of those material misrepresentations, numerous lenders agreed to fund mortgage loans for the purchase of the residential properties. Furthermore, after the mortgage loans were secured, property title companies prepared documents and handled closings based on the fraudulent information provided by Chaika and LaFavre or others on their behalf. Again, those misrepresentations were material.

In furtherance of this scheme, Chaika prompted no fewer than seven wire transfers of loan proceeds from which he and others obtained cash kickbacks. He also caused false documents to be sent through the U.S. mail and by commercial carriers on at least three occasions.

For his crimes, Chaika faces a potential maximum penalty of 20 years in federal prison on each count. United States District Court Judge Richard H. Kyle will determine his sentence at a future hearing, yet to be scheduled. On December 7, 2009, Dustin Lee LaFavre pleaded guilty to one count of conspiracy and awaits sentencing.

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. Attorneys Nancy E. Brasel and David M. Genrich.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It 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, 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.

FRESNO, CA(Source: FBI) — United States Attorney Benjamin B. Wagner announced that United States District Judge Lawrence J. O’Neill sentenced Wrenl Burge, 40, of Fresno, to 41 months in prison and Albert Lewis Ellis, 46, also of Fresno, to 33 months in prison for a scheme to falsify mortgage loan documents. Burge was ordered to pay $1,011,524 in restitution, and Ellis was ordered to pay $548,178 in restitution to the mortgage lenders.According to their plea agreements, Burge and Ellis each admitted that they each obtained a Social Security number that belonged to another person and used that Social Security number to obtain mortgages to purchase various properties in Fresno. As part of their scheme to defraud, Burge and Ellis, using the fraudulently obtained Social Security numbers, would each submit mortgage loan applications to lenders and would falsify information regarding their employer, their salary, and their assets. The homes eventually went into foreclosure, causing a combined loss to the lending institutions of $1,559,702.

This case is the product of a joint investigation by the United States Secret Service, the Social Security Office of Inspector General, and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Michele Thielhorn.

In announcing the indictment, U.S. Attorney Machen and Assistant Director in Charge McJunkin commended the work of those who investigated the matter for the FBI’s Washington Field Office, including special agents and forensic accountants. They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Diane Hayes and Sarah Reis, and Assistant U.S. Attorney Daniel Friedman. Finally they acknowledged the work of Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case along with the office’s Asset Forfeiture and Money Laundering Section.

WASHINGTON—Ronald Johannes Sneijder, 48, a former owner of a title and escrow company based in the District of Columbia, pled guilty today to the lead count in a recently filed indictment, bank fraud, announced U.S. Attorney Ronald C. Machen Jr. and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Sneijder, of Herndon, Virginia, entered his guilty plea today before the Honorable Alan Kay in the U.S. District Court for the District of Columbia. He also agreed to forfeiture of $1,256,000. He is to be sentenced later this summer or fall by the Honorable Emmet G. Sullivan. Sneijder faces a probable sentence under the sentencing guidelines of 30 to 37 months of incarceration, restitution in the amount of $1,256,000, a fine, and other conditions.

The indictment against Sneijder was returned by a grand jury on May 13, 2011 and unsealed last week.

According to the statement of offense, signed by the defendant, Sneijder was the manager and majority owner of a title and escrow company known as Red Box Settlements, located in the 1600 block of U Street NW, Washington, D.C. On about January 13, 2004, Sneijder purchased a residence at 1325 Independence Avenue SE. About a month later, he refinanced the loan through Wells Fargo Bank, obtaining a home equity line of credit with a maximum credit limit of up to $575,000.

In February 2005, the defendant sought a $581,000 refinance loan from First Savings Mortgage Corporation, using as collateral his house at 1325 Independence Avenue SE, which was already encumbered with the home equity line of credit from Wells Fargo. First Savings Mortgage Corporation approved the loan on the condition that the Wells Fargo line of credit would be paid off and closed and the lien in the public record be “released” so that no additional money could be borrowed on the Wells Fargo line of credit, and so that there would be no other loans that would take precedence over the First Savings Mortgage Corporation loan.

After settlement, Sneijder paid off the Wells Fargo line of credit but did not close it. Thereafter, from March 2005 to November 2006, he again borrowed money against the Wells Fargo line of credit. He obtained cash advances up to approximately $558,000 by the end of November 2006.

In May 2006, Red Box Settlements handled a real estate closing for a client identified in these proceedings as R.K. As part of the settlement, Red Box received approximately $396,000 as the sales proceeds into its escrow exchange account held in trust for R.K. However, from May 2006 to November 2006, the defendant took approximately $216,000 from the escrow exchange account to pay his personal and business expenses without permission and authority of R.K. Then, in November 2006, R.K. purchased another home and asked for the release of his money from the escrow exchange account; however, Red Box Settlements did not have sufficient funds in its escrow exchange account to honor the full demand and was unable to remit R.K.’s portion, that is, about $313,000, directly to him.

Later in November 2006, Sneijder sought a $675,000 loan from Wachovia Bank using as collateral 1325 Independence Avenue SE, which was already encumbered with the Wells Fargo home equity line of credit and the First Savings Mortgage Corporation loan. Wachovia approved the loan on the condition that the Wells Fargo line of credit would be paid, closed, and the Recorder of Deeds be notified of the closure so that no additional money could be borrowed on the Wells Fargo line of credit. The defendant paid down less than half of the line of credit, and again failed to close the Wells Fargo account. From January to August 2007, Sneijder again continued to borrow money against the Wells Fargo line of credit for a total amount due and owing of approximately $573,000.

Sneijder failed to repay the approximate $573,000 Wells Fargo line of credit, the $581,000 First Savings Mortgage Corporation loan, and the $675,000 Wachovia loan, resulting in foreclosure of 1325 Independence Avenue SE, the proceeds of which were insufficient in value to repay the approximate $1,829,000 loaned to the defendant.

In announcing the plea, U.S. Attorney Machen and Assistant Director in Charge McJunkin commended the work of those who investigated the matter for the FBI’s Washington Field Office, including Special Agents and Forensic Accountants. They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Diane Hayes and Sarah Reis, and Assistant U.S. Attorney Daniel Friedman. Finally they acknowledged the work of Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case along with the office’s Asset Forfeiture and Money Laundering Section.

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.

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.”

MINNEAPOLIS—Earlier today in federal court in the District of Minnesota, two people pleaded guilty to their roles in a scheme that defrauded mortgage lenders out of approximately $4.2 million. My Dinh Lam, age 30, of Minneapolis, and Ashley Elizabeth Prasil, age 27, of Eden Prairie, pleaded guilty to one count of conspiracy to commit wire fraud in connection with the scheme. The defendants, who were charged on April 21, 2011, entered their pleas before United States District Court Judge Susan Richard Nelson in St. Paul.

In their plea agreements, the defendants admitted that from December 18, 2006, through December of 2007, they conspired to defraud mortgage lenders in connection with the marketing of the Cloud 9 Sky Flats (“Cloud 9″), a Minnetonka development. The defendants admitted that the scheme involved finding buyers to apply for mortgage loans to purchase units in the development, knowing that each buyer would receive a kickback of approximately 30 percent of the reported purchase price of any unit. The application forms submitted to the lenders did not disclose these kickbacks. The kickback payments were returned to the buyers through an account controlled by a co-conspirator, with a portion skimmed off and shared among the defendants. More than 40 Cloud 9 units were sold through the scheme, and more than 80 percent of the loans have since defaulted. In excess of $4.2 million was transferred to accounts controlled by Sheri Lynn Delich, a person who has been charged by Information in this case.

For their crimes, the defendants face a potential maximum penalty of five years in prison. Judge Nelson will determine their sentences at a future hearing, yet to be scheduled.

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 Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It 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, 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.

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

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

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

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

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

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

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

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

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

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

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (“FBI”), Miami Field Office, announce that defendant Michael J. McNerney, a founding partner of the Ft. Lauderdale law firm formerly known as Brinkley, McNerney, Morgan, Solomon & Tatum, LLP, pled guilty on May 18, 2011, to a one-count criminal information charging him with conspiracy to commit mail fraud and wire fraud in connection with a scheme to defraud investors in the Mutual Benefits Corporation (“MBC”). As part of his plea agreement, McNerney agreed to be responsible for $837 million in restitution to the investors who were victims of this fraud.

Sentencing has been scheduled for August 26, 2011 before U.S. District Judge Adalberto Jordan. At sentencing, McNerney faces a maximum statutory sentence of five years in prison.

For almost 10 years, from about October 1994 through at least May 2004, McNerney was the lead outside lawyer for MBC, and participated in a scheme through which MBC sold investment interests in viatical and life settlement insurance policies to the general public, raising more than $1.25 billion from approximately 30,000 investors worldwide. A viatical settlement is a transaction in which a terminally ill person sells the death benefit of his or her life insurance policy to a third party in return for a lump-sum cash payment, which is a discounted percentage of the policy’s face value. A life settlement is similar to a viatical settlement, except the seller is not terminally ill, but is a senior citizen. In the sale of viatical or life settlements, an investor would realize a profit if, when the insured dies and the policy matures, the policy benefit is more than the price paid for policy. Any profit realized would be decreased by additional out-of-pocket costs, such as premium payments.

As charged in the information, McNerney, as outside counsel for MBC, made and caused others to make, knowingly misleading representations concerning such matters as the management of MBC and its related entities and the sufficiency of the funds set aside to make premium payments on the investors’ policies. For example, among the misrepresentations made to investors, MBC’s sales agents falsely promised a “fixed return” on investments and falsely represented that MBC had a strong track record of accurately predicting life expectancies. In addition, McNerney and his conspirators concealed from investors and regulators the fact that Joel Steinger, a convicted felon, was the key decision maker at MBC. Through these and other misrepresentations, MBC engaged in an unsustainable Ponzi scheme, in which it used new investors’ monies to pay previous investors.

United States Attorney Wifredo A. Ferrer stated, “Attorneys hold a position of trust in our society. As such, they are expected to deal honestly and truthfully with their clients and the general public in the exercise of their duties. This attorney breached that duty and defrauded investors by providing “legal cover” to what was essentially nothing more than a Ponzi scheme. McNerney abused his position of trust and used his law license to help commit this massive fraud. Such abuse will not be tolerated.”

“This is another case about an attorney who instead of doing the right thing was motivated by his personal greed and defrauded thousands of investors out of hundreds of millions of dollars,” said Special Agent in Charge John V. Gillies. “McNerney’s actions were illegal and unethical and those who engage in such behavior need to know that they will be brought to justice, regardless of how elaborate or complex they think their scheme is.”

Mr. Ferrer commended the investigative efforts of the FBI and the Southeast Regional Office of the Securities and Exchange Commission, which previously brought a civil action against MBC and its principals. The matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.

MINNEAPOLIS—Earlier today in federal court in the District of Minnesota, two people pleaded guilty to their roles in a scheme that defrauded mortgage lenders out of approximately $4.2 million. My Dinh Lam, age 30, of Minneapolis, and Ashley Elizabeth Prasil, age 27, of Eden Prairie, pleaded guilty to one count of conspiracy to commit wire fraud in connection with the scheme. The defendants, who were charged on April 21, 2011, entered their pleas before United States District Court Judge Susan Richard Nelson in St. Paul.

In their plea agreements, the defendants admitted that from December 18, 2006, through December of 2007, they conspired to defraud mortgage lenders in connection with the marketing of the Cloud 9 Sky Flats (“Cloud 9″), a Minnetonka development. The defendants admitted that the scheme involved finding buyers to apply for mortgage loans to purchase units in the development, knowing that each buyer would receive a kickback of approximately 30 percent of the reported purchase price of any unit. The application forms submitted to the lenders did not disclose these kickbacks. The kickback payments were returned to the buyers through an account controlled by a co-conspirator, with a portion skimmed off and shared among the defendants. More than 40 Cloud 9 units were sold through the scheme, and more than 80 percent of the loans have since defaulted. In excess of $4.2 million was transferred to accounts controlled by Sheri Lynn Delich, a person who has been charged by Information in this case.

For their crimes, the defendants face a potential maximum penalty of five years in prison. Judge Nelson will determine their sentences at a future hearing, yet to be scheduled.

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 Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It 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, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

A 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.

GRAND RAPIDS, MI—Roger Lee Clark, 66, formerly of Wyoming, Michigan, received a sentence of 6 ½ years in prison for committing a multi-million-dollar Ponzi scheme and filing false income tax returns, U.S. Attorney Donald A. Davis announced today. U.S. Attorney Davis was joined in the announcement by FBI Special Agent in Charge Andrew Arena and IRS Criminal Investigation Special Agent in Charge Erick Martinez. Special agents of the FBI and of the IRS Criminal Investigation Division had investigated the case.

The Honorable Janet T. Neff, U.S. District Judge, presided over the sentencing. Judge Neff expressed her concern regarding the seriousness of the “knowing and willing theft” by Clark and the trail of financial ruin he left behind. “The pain of that financial ruin for older people is particularly reprehensible.” In a terse attempt to explain the $9.3 million fraud, Clark said, “things happened.” Judge Neff replied, “Wow, that takes the cake.” Judge Neff also ordered Clark to pay restitution to the victims and serve a combined total of four years of supervised release. Clark also agreed to a money judgment of $9,162,380.99 and the forfeiture of undeveloped real property in Byron Center as well as numerous vehicles.

Clark claimed that he owned and operated CRM Investors Corporation for the past 16 years, despite never having any training in financial planning or any related financial fields. Clark used CRM, along with other fictitious businesses that he created, to hide money and assets from victims and evade his income taxes.

In 2007, Clark instructed a California investor to wire transfer $1,001,500 into a bank account controlled by him. Clark explained to the investor that she was investing in the T-Bill trading program and that her investment was 100 percent secure. Clark admitted that in September and October of 2007, he sent the victim two wire transfers of $180,000 each and lied to her that the payments represented earnings from her investment, when in fact, the first payment came from her own principle and the second payment was from the principle of another investor. On January 29, 2009, Clark e-mailed the California investor indicating that all of her money was lost, but never stated where the money actually went.

Clark filed a 2007 tax return that reported his total income to be slightly over $11,000 when he knew that his actual total income was significantly higher. As part of his sentence, Clark was also ordered to pay total of $163,646.00 in back taxes.

“Investment fraudsters prey on trusting investors by enticing them with a ‘can’t miss’ deal and then stealing their hard earned money,” said Special Agent in Charge Erick Martinez.

“IRS Criminal Investigation is committed to investigating investment schemes in an effort to protect the financial well being of the American investor.”

FBI Special Agent in Charge Andrew G. Arena added, “The public should be aware that even though the FBI continues to vigilantly pursue these types of criminal violations, we live in a buyer-beware investment environment. Investors should vigorously investigate the background information of all investments and the individuals handling them.”

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Case Involves More Than $1.8 Million in Loans

WASHINGTON—Ronald Johannes Sneijder, 48, a former owner of a title and escrow company based in the District of Columbia, has been indicted on federal charges relating to mortgage fraud. The total amount of loans was approximately $1,829,000.

The indictment, which was unsealed today, was returned May 13, 2011 in the U.S. District Court for the District of Columbia. It was announced by U.S. Attorney Ronald C. Machen Jr. and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Sneijder, of Herndon, Va., was indicted on charges of bank fraud, wire fraud, first degree fraud, and theft. The indictment also includes a forfeiture count seeking all proceeds from the defendant’s crimes. If convicted, under the federal sentencing guidelines, he faces a potential sentence of between 46 and 57 months of incarceration.

According to the indictment, Sneijder was the manager and majority owner of a title and escrow company known as Red Box Settlements, located in the 1600 block of U Street NW, Washington, D.C.

On about January 13, 2004, Sneijder purchased a residence at 1325 Independence Avenue SE. About a month later, he refinanced the loan through Wells Fargo Bank, obtaining a home equity line of credit with a maximum credit limit of up to $575,000.

In February 2005, the defendant sought a $581,000 refinance loan from First Savings Mortgage Corporation, using as collateral his house at 1325 Independence Avenue SE, which was already encumbered with the home equity line of credit from Wells Fargo. First Savings Mortgage Corporation approved the loan on the condition that the Wells Fargo line of credit would be paid off and closed and the lien in the public record be “released” so that no additional money could be borrowed on the Wells Fargo line of credit, and so that there would be no other loans that would take precedence over the First Savings Mortgage Corporation loan.

After settlement, Sneijder paid off the Wells Fargo line of credit but did not close it. Thereafter, from March 2005 to November 2006, he again borrowed money against the Wells Fargo line of credit. He obtained cash advances up to approximately $558,000 by the end of November 2006.

The indictment further alleges that in November 2006, Sneijder sought a $675,000 loan from Wachovia Bank using as collateral 1325 Independence Avenue SE, which was already encumbered with the Wells Fargo home equity line of credit and the First Savings Mortgage Corporation loan. Wachovia approved the loan on the condition that the Wells Fargo line of credit would be paid, closed, and the Recorder of Deeds be notified of the closure so that no additional money could be borrowed on the Wells Fargo line of credit. The defendant paid down less than half of the line of credit, and again failed to close the Wells Fargo account. From January to August 2007, Sneijder again continued to borrow money against the Wells Fargo line of credit for a total amount due and owing of approximately $573,000.

According to the indictment, Sneijder failed to repay the approximate $573,000 Wells Fargo line of credit, the $581,000 First Savings Mortgage Corporation loan, and the $675,000 Wachovia loan, resulting in foreclosure of 1325 Independence Avenue SE, the proceeds of which were insufficient in value to repay the approximate $1,829,000 loaned to the defendant.

The indictment further alleges that the defendant took about $216,000 from client escrowed money from May to November 2006.

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.

In announcing the indictment, U.S. Attorney Machen and Assistant Director in Charge McJunkin commended the work of those who investigated the matter for the FBI’s Washington Field Office, including special agents and forensic accountants. They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Diane Hayes and Sarah Reis, and Assistant U.S. Attorney Daniel Friedman. Finally they acknowledged the work of Assistant U.S. Attorney Virginia Cheatham, who is prosecuting the case along with the office’s Asset Forfeiture and Money Laundering Section.

KANSAS CITY, MO—Matt J. Whitworth, United States Attorney for the Western District of Missouri, announced today that seven Kansas City, Mo., residents have been indicted by a federal grand jury for their roles in a mortgage fraud scheme that involved the purchase of a $605,000 house in Parkville, Mo.

Lloyd Claerhout, 26, Scott J. Schirmer, 32, William R. Wonder III, 31, David E. Twitty, 27, Cameron D. Bennett, 34, Jennifer R. Hernandez, 37, and Katherine S. Sartain, 53, all of Kansas City-North, were charged in a two-count indictment returned by a federal grand jury in Kansas City.

The federal indictment alleges that each of the defendants participated in a conspiracy to commit bank fraud from July to October 2007. In addition to the conspiracy, each defendant is charged with one count of bank fraud. According to the indictment, the defendants planned to purchase the property for $605,000 then immediately re-sell it at a profit.

Schirmer allegedly located a residential property at 8118 Clearwater Pointe in Parkville, with the understanding that it would be purchased and then resold at a profit to everyone involved. Schirmer paid Wonder $3,000, the indictment says, in order to use his name for the initial purchase of the property.

Wonder completed a loan application, with the assistance of Bennett and Twitty, which contained false financial information. Wonder allegedly signed two loan applications for Bank of America, totaling $605,000, which each contained false information regarding his monthly income, employment and bank account balances.

Schirmer then arranged to have Claerhout purchase the property from Wonder at a profit. Schirmer allegedly arranged the collection of the necessary down payment from Bennett, Wonder, Twitty and ot! hers to assist Claerhout in the purchase of the property. Co-defendants allegedly submitted loan applications and supporting documentation containing material false representations to North American Savings Bank, the mortgage lender.

Claerhout allegedly signed a Uniform Residential Loan Application for $637,600, which contained false and fraudulent information regarding his monthly income, employment, and bank account balances, in order to obtain a loan for a portion of the purchase.

Hernandez, who was employed as a teller at Mazuma, allegedly signed a “Request for Verification of Deposit” which stated that Claerhout had a current balance of $127,131 in his savings account, and an average balance for the previous two months of $127,882. Hernandez allegedly manipulated the records by transferring funds from other Mazuma accounts into Claerhout’s account to falsely reflect a substantial savings account balance, then later voiding the transfers.

Sartain, a real estate agent, allegedly signed a “Request for Verification of Rent or Mortgage Account” which falsely indicated that Claerhout was paying $4,300 rent.

Whitworth cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney David M. Ketchmark. It was investigated by the FBI.

NEWARK, NJ—A West Orange, NJ ., man who owned and operated multiple foreclosure rescue companies admitted today to his role in a mortgage fraud scheme that defrauded numerous mortgage lenders of over $10 million, United States Attorney Paul J Fishman announced. Ronald Harris Jr, 41, of Piscataway, NJ ., pleaded guilty before United States Magistrate Judge Patty Shwartz to an information charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Judge Shwartz recommended to United States District Judge Faith S Hochberg that his plea of guilty be accepted and entered. According to documents filed in this case and statements made during Harris’ guilty plea proceeding: Harris owned and operated Harris Capital and Skyline Capital Group, both of which held themselves out as foreclosure rescue companies and operated out of offices in Newark and later, Maplewood, NJ.

Harris admitted that he and other individuals, including Harris Capital employee Sterling Bruce, 37, of Newark, fraudulently promised to help homeowners avoid foreclosure, keep their homes, and repair their damaged credit by directing the homeowners to allow title to their homes to be put in the names of third party purchasers, or straw buyers, for approximately six month to one year. Harris told the homeowners that during that time period, he and others would help them obtain more favorable mortgages and improve their credit ratings. The homeowners were told that the titles to their homes would be returned to them. After the homeowners were signed up, Harris, Bruce, and others recruited individuals with good credit scores to act as straw buyers of the distressed properties.

The straw buyers were told that they were helping someone save his or her home and that they would make money when they sold the property back to the current owner after approximately one year. Once the distressed homeowners and straw buyers were in place, Harris, Bruce, Pia Perkinson, 39, of Parlin, NJ.—a mortgage loan officer at a number of different mortgage loan companies—and others caused loan applications to be sent in the straw buyers’ names to mortgage lenders. To increase the credit-worthiness of the straw buyers and to ensure that they would be approved for the loans, Harris, Bruce, Perkinson, and others submitted loan applications containing material false personal and financial information about the straw buyers, such as misstating their employment, income, and assets. For example, many of the straw buyers’ loan applications falsely stated that they worked for one of Harris’ companies making a substantial salary.

Harris would also regularly submit fraudulent supporting documents with the loan applications to support the false statements, such as fake employment records and fake investment account statements. Prior to the closings of these fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties. At the closings of the transactions, the liens would be paid off with the proceeds of the fraudulently obtained loans and Harris and Bruce would enrich themselves. Harris admitted that he regularly laundered these loan proceeds through various bank accounts he controlled.

In total, Harris and his co-conspirators caused lenders to fund dozens of fraudulent loans that totaled more than $10 million. Of that amount, Harris received approximately $1,145,993. The wire fraud conspiracy count to which Harris pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of up to $1 million. The money laundering conspiracy count carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000.

Sentencing is currently scheduled for September 13, 2011. Bruce previously pleaded guilty before Judge Shwartz to one count of wire fraud conspiracy relating to his role in the mortgage foreclosure rescue scheme. He is currently scheduled to be sentenced by Judge Hochberg on September 12, 2011. Perkinson also previously pleaded guilty before Judge Shwartz to one count of wire fraud conspiracy.

During her guilty plea, Perkinson admitted to submitting fraudulent loan applications to various lenders, as well as taking out at least two fraudulent loans herself. A sentencing date has not yet been determined. Sabir Muhammad, 47, of South Plainfield, NJ ., was charged along with Harris in the initial complaint, and the charges against him remain pending. United States Attorney Fishman credited postal inspectors of the United States Postal Inspection Service, under the direction of Inspector in Charge Thomas E Boyle; special agents of the FBI, under the direction of Special Agent in Charge Michael B Ward; and special agents of the IRS, under the direction of Special Agent in Charge Victor W Lessoff, with the investigation leading to today’s guilty plea.

The government is represented by Assistant United States Attorneys Matthew E Beck and Aaron Mendelsohn of the United States Attorney’s Office Economic Crimes Unit in Newark. The charges contained in the complaint against Muhammad are merely accusations, and the defendant is considered innocent unless and until proven guilty. This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.

The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. Defense counsel: Alan D Bowman Esq ., Newark

Reported by: FBI