The Mortgage Fraud Blog

In the following press release R. Alexander Acosta, United States Attorney for the Southern District of Florida, Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, Michael Fithen, Special Agent In Charge, U. S. Secret Service, and Roland H. Maye, Resident Agent In Charge, Office of the Inspector General, Social Security Administration, announced that defendant Marlene Dinnall a/k/a Marlene Henry, Marlene Angela Hall, and Marlene Morris, 48, of Miramar, Florida was sentenced on Friday, May 2, 2008, to 51 months’ imprisonment by United States District Court Judge James I. Cohn. Dinnall was sentenced for her participation on a mortgage and mail and wire fraud scheme that resulted in approximately $1.8 million in fraudulently obtained mortgage loans. At sentencing, the defendant was also ordered to pay restitution to National City Mortgage Company, a lender that suffered actual loss in this case.

According to the court records, Dinnall was a mortgage loan originator with an office in Miami, Florida. She enriched herself by obtaining mortgages from lenders using straw purchasers and submitting false documents, including false loan applications, false employment verification forms, false salary statements, false IRS W-2s, and false bank account statements reflecting high account balances. The defendant also used and caused others to use stolen social security numbers as their personal identification at closings, and participated in the sale of fraudulent identification documents and social security numbers and cards. The defendant also provided false financial documents to an individual, who intended to use the documents to obtain an $800,000 line of credit from a federally insured financial institution.

Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation, the U.S. Secret Service, and the Office of the Inspector General, Social Security Administration. This case is being prosecuted by Assistant United States Attorney Laurie E. Rucoba.

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 http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Technical comments about this website can be e-mailed to the Webmaster. PLEASE NOTE: The United States Attorney’s Office does not respond to non-technical inquiries made to this website. If you wish to make a request for information, you may contact our office at 305-961-9001, or you may send a written inquiry to the United States Attorney’s Office, Southern District of Florida, 99 NE 4th Street, Miami, Fl. 33132.

In the following press release Benton J. Campbell, United States Attorney for the Eastern District of New York, and Mark J. Mershon, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Division, today announced the filing of an indictment charging LEIB PINTER and BARRY GOLDSTEIN, two former principals of Olympia Mortgage Corporation, a Brooklyn, NewYork-based mortgage lender, with conspiracy, wire fraud, and bank fraud.

The defendants’ initial appearances and arraignments are scheduled later today before United States Magistrate Judge Joan M. Azrack at the U. S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The case has been assigned to United States District Judge Nina Gershon.

The indictment charges two fraudulent schemes. In the first, PINTER is charged with fraud in connection with the theft of $44 million of payoff proceeds for refinanced mortgage loans funded by Fannie Mae and serviced by Olympia (the “Fannie Mae Fraud”). In the second, GOLDSTEIN is charged with fraud in connection with Olympia’s sale of a portfolio of non-performing mortgage loans to Credit Suisse First Boston (“CSFB”) using falsified loan histories (the “CSFB Fraud”).

The Fannie Mae Fraud

According to the indictment, Olympia originated and serviced mortgage loans owned by Fannie Mae, and some of those loans were refinanced through Olympia. When Olympia refinanced a Fannie Mae mortgage loan, Fannie Mae wired the money to an Olympia account. Olympia was then required to pay off the underlying mortgage loan by remitting the outstanding balance to Fannie Mae. Instead, PINTER allegedly misappropriated the proceeds of the refinanced mortgage loan for the benefit of Olympia. When the fraudulent scheme was revealed, Fannie Mae held nearly $44 million in unpaid, but refinanced, underlying mortgage loans from Olympia.

The CSFB Fraud

The indictment alleges that Olympia also sold loans to investors, including CSFB, now doing business as Credit Suisse. Prior to purchasing a loan, CSFB required Olympia to produce, among other things, a loan history detailing what payments were made by the homeowners and whether those payments were made on time. Olympia owned several loans for which payments had not been made in a timely manner. In an effort to induce CSFB to purchase these non-performing loans, GOLDSTEIN directed Olympia employees to alter delinquent loan histories to reflect that all payments were made in a timely manner. CSFB purchased 12 loans whose histories had been fraudulently altered in this manner.

“Investigating and prosecuting mortgage-related fraud is a priority of the Department of Justice and this office,” stated United States Attorney Campbell. “Those who enrich themselves at the expense of mortgage lenders are on notice that such crimes will not be tolerated.”

FBI Assistant Director-in-Charge Mershon stated, “Commercial banks and government loan guarantors assume some risk in assessing mortgage loans. But deliberate misrepresentation by unscrupulous mortgage brokers, lenders, or appraisers can trump even determined due diligence. The FBI and the U.S. Attorney are committing more resources than ever to policing the mortgage lending arena.”

If convicted of either of the conspiracy to commit wire fraud or wire fraud counts, PINTER faces a maximum term of imprisonment of 30 years. If convicted of either of the conspiracy to commit bank fraud or bank fraud counts, GOLDSTEIN faces a maximum term of imprisonment of 30 years.

The government’s case is being prosecuted by Assistant United States Attorneys Jonathan E. Green and Daniel A. Spector.

In the following press release Florida Attorney General Bill McCollum today announced that two Hillsborough County men have been convicted of conspiracy to commit racketeering for their involvement in a mortgage fraud scheme. David E. Tuggle, Jr. and Eric S. Steinhauser pleaded guilty today in Polk County and could face up to five years in prison when sentenced in September. As part of the plea agreement, neither man may be employed in the mortgage, title, or real estate industries. The men were prosecuted by the Attorney General’s Office of Statewide Prosecution.

Tuggle, 31, and Steinhauser, 29, were part of a criminal enterprise which submitted fraudulent mortgage loan documents to Argent Mortgage Company through Brandon-based Sunstate Mortgage Company. From 2003 through 2005, Tuggle and Steinhauser submitted more than 300 mortgage loan applications to Argent Mortgage. Of those 300 applications, more than 280 were funded and collectively valued at more than $34 million. Investigators believe the men paid one of their co-conspirators, a former Argent vice president, more than $100,000 for insuring the approval of these fraudulent loans.

Tuggle and Steinhauser are cooperating with authorities in both the pending case against their co-defendants and in a previously filed case. The investigation was a joint effort by the Florida Department of Law Enforcement, the Hillsborough County Consumer Protection Agency, and the Office of Statewide Prosecution. Argent has cooperated fully with the investigation.

The following press release the Minnesota Attorney General, Lori Swanson, announced the filing of six new lawsuits in Hennepin County District Court against foreclosure consulting companies that charged Minnesota homeowners up to $2,375 to save their homes but failed to provide promised assistance that would help them retain home ownership.

“We do not tolerate mortgage foreclosure consultants taking advantage of struggling homeowners who are already between a rock and a hard place in the worsening mortgage meltdown,” Swanson said.

The lawsuits filed today are against: (1) National Foreclosure Relief, Inc., a Nevada corporation with a California business address; (2) Lewis Loss Mitigation, Inc. of Alabama, which also does business as Stop Foreclosure Center and Lewis and Associates Consulting; (3) D.R. Financial Services Corp. of California, which also does business as D.R. Financial and Superior Home Loans; (4) American Foreclosure Specialists, LLC, an Oklahoma limited liability company; (5) Mortgage Default Assistance, LLC, a Florida limited liability company; and (6) Home Assure, LLC, a Florida limited liability company that claims it has offices in the Empire State Building.

The suits allege that these companies used websites, targeted mailings, and/or the telephone to solicit homeowners by assuring that the companies could stop the foreclosure process. Consumers who contacted these companies were charged an immediate fee before any services were performed, in violation of Minnesota law. Homeowners have complained that these companies failed to deliver on promises of assistance after collecting these up-front fees.

The suits allege that these companies violated a 2004 Minnesota law barring “foreclosure consultants” from charging any compensation until after the foreclosure consultant has “fully performed each and every service the foreclosure consultant contracted to perform or represented he or she would perform.” The law also requires entities that charge borrowers fees to assist in stopping, avoiding, or postponing a foreclosure, to have a written contract containing certain safeguards. All six lawsuits seek injunctive relief, restitution, civil penalties, and attorneys fees.

The Minnesota Attorney General’s Office has published a consumer guide, entitled “Facing Mortgage Foreclosure,” which offers tips for borrowers facing mortgage default or foreclosure, and warns homeowners to be on the lookout for potential scams. Among other things, Swanson provides the following guidance to homeowners facing default:

• Take immediate action to contact the lender if you are having trouble paying a loan. The lender may be willing to work out a repayment plan, loan modification, forbearance, reinstatement, etc. Don’t wait to contact the lender, as delays may jeopardize your options.
• Contact a reputable mortgage counselor. Borrowers may find legitimate counselors by contacting the Minnesota Housing Finance Agency (“MHFA”) or the U.S. Department of Housing and Urban Development (“HUD”).
• Don’t agree to pay money in advance to a “foreclosure consultant.” Minnesota law bans foreclosure consultants from collecting a fee until after they deliver their services.

In December of 2007, Attorney General Swanson filed lawsuits against Foreclosure Assistance Solutions, LLC and American Housing Authority, Inc./American Housing Financial, Inc. over similar allegations. Prior to her inauguration, Swanson created a predatory lending study group that proposed legislation to reform predatory lending practices such as loans made without regard to a borrower’s ability to repay the loan and issuing adjustable rate mortgages without verifying that the borrower can pay not just the initial teaser rate, but also the fully amortized rate after the teaser period expires. The recommendations of the study group became law in 2007. Swanson has advocated for similar regulation at the federal level, testifying before the United States House of Representatives Financial Services Committee and the Board of Governors of the Federal Reserve System.

Homeowners who feel they have been taken advantage of by a mortgage foreclosure consultant who did not provide promised services for which the homeowner paid money may file a complaint with the Attorney General’s Office by calling 1-800-657-3787 or 651-296-3353. Consumers also may download a Consumer Complaint Form from the Attorney General’s website by clicking here and returning the completed form to: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.

In the following press release Ohio Attorney General Marc Dann and Franklin County Prosecutor Ron O’Brien announce the indictment of John Wanek as a result of a multi-million dollar mortgage fraud case investigated by the Central Ohio Mortgage Fraud Task Force.

Wanek, of Phoenix, Arizona was indicted by the Franklin County Grand Jury last week (3/26/08) for falsifying documents in order to get a loan, a loan which he defaulted on within a year. The indictment contained one count of engaging in a pattern of corrupt activity, two counts of securing writings by deception, two counts of forgery, two counts of theft, and two counts of falsification.

The indictment is the result of a task force investigation based on the mortgage lender coming to the prosecutor’s office and reporting that Wanek might be committing mortgage fraud. The allegations surrounded Wanek’s purchase of two Franklin County apartment complexes: Ashberry Village located on the west side of Columbus and Colonial Village located on the east side of Columbus. The two properties have gone into foreclosure for non-payment and have new owners.

The indictment alleges that Wanek obtained mortgages on the properties under false pretenses, and that data and documents, like possible income projections for renters, were falsified to facilitate the frauds to get him the loans.

The mortgages on the properties were worth more than $15 million dollars; making this case Franklin County’s largest dollar amount for a mortgage fraud case.

The Central Ohio Mortgage Fraud Task Force is coordinated by the Ohio Organized Crime Investigations Commission, and it is headed up by the Columbus Division of Police, Economic Crime Unit. Participating agencies include the Ohio Attorney General’s Office, the Franklin County Prosecutor’s Office, the Upper Arlington Police Department, and the Office of Inspector General for Housing and Urban Development.

NOTE:

• Engaging in a Pattern of Corrupt Activity is a felony of the first degree
• Securing Writings by Deception is a felony of the second degree
• Theft, Forgery, and Falsification charges are felonies of the third degree

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In the following press release United States Attorney for the District of Maryland Rod J. Rosenstein announced that Kolawole Aminu, age 45, a Nigerian national, pleaded guilty today to conspiring to make a false statement in connection with a scheme to defraud a mortgage lender. Oyekunle Ikudayisi, age 39, of White Plains, Maryland, pleaded guilty to the same charge on April 23, 2008.

According to their plea agreements, Aminu and Ikudayisi conspired with others to purchase properties from a company owned by a co-conspirator. Aminu and Ikudayisi obtained mortgage loans for the properties in their own names, using their good credit histories. The co-conspirator, however, was responsible for making all payments associated with the purchase of the properties, including the down payments, closing costs and mortgage payments. Aminu and Ikudayisi made false statements on loan applications as to their incomes and intent to make the properties their primary residences, and signed settlement documents indicating they were making the down payments on those properties, paying the closing costs associated with the transactions and making the mortgage payments, when in fact they were not. Aminu was paid $10,000 for his participation in the scheme.

As part of this scheme, Aminu purchased 4304 Payne Drive in Fort Washington, Maryland in June 2006. The property went into foreclosure in April 2007, resulting in a loss to the mortgage lender of over $70,000. Ikudayisi purchased three properties from July to September 2006: 7601 Webster Lane in Ft. Washington; 2609 Brentwood Road NE in Washington, D.C.; and 4302 Alton Street in Capitol Heights, Maryland. All three properties went into foreclosure, resulting in estimated losses to the mortgage lenders of $190,847.

The defendants face a maximum sentence of five years in prison, followed by three years of supervised release. U.S. District Judge Alexander Williams, Jr. has scheduled sentencing for Aminu on August 21, 2008 at 9:30 a.m. and for Ikudayisi on August 22, 2008 at 9:30 a.m.

United States Attorney Rod J. Rosenstein thanked the U.S. Secret Service and the Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Robert K. Hur and James A. Crowell IV, who are prosecuting the case.

In the following press release U.S. Attorney Jeffrey A. Taylor, Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, C. André Martin, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office, and Thomas E. Hampton, Commissioner of the District of Columbia’s Department of Insurance, Securities, and Banking announced that a 35-year-old District of Columbia man, Duane McKinney, most recently of 1000 10th Street, NE, Washington, D.C., was found guilty today by a jury in the U.S. District Court for the District of Columbia on charges of fraud, theft, and monetary transactions.

Specifically, McKinney was found guilty of four counts of mail fraud, two counts of wire fraud, three counts of first degree theft, and two counts of monetary transactions. McKinney is scheduled to be sentenced on July 15, 2008, before the Honorable Judge Reggie B. Walton. At sentencing, McKinney faces a likely range of imprisonment of 87 - 108 months under the Federal Sentencing Guidelines.

The government’s evidence at trial established that Duane McKinney obtained title to D.C. and Maryland properties through forged deeds, that is, deeds which purported to be signed by the owners transferring the properties to McKinney or his non-profit business. In fact, the deeds were not signed by the owners; the vast majority of the owners were deceased at the time of the forged and false deeds. McKinney was assisted by Joe D. Liles, who would sign his name to these false deeds as the “notary” falsely stating that he saw the owner sign the deeds as grantor and that the owner “personally appeared before him.” Once the deeds were notarized, McKinney caused the forged and notarized deeds to be filed with the District of Columbia’s Recorder of Deeds and the Prince George’s Circuit Court Land Records. McKinney would then sell the properties as if they belonged to him or his non-profit business and would use the money for his own personal desires. McKinney wrongfully obtained approximately 14 properties, nine of which he sold in order to gain for himself more than $770,000.

Liles, of Upper Marlboro, Maryland, pleaded guilty on January 16, 2008, to the charge of false statements. Liles is scheduled to be sentenced on May 30, 2008 before Judge Walton.

In announcing today’s verdict, U.S. Attorney Taylor, Assistant Director in Charge Persichini, Special Agent in Charge Martin, and Commissioner Hampton commended Special Agents Kelly Bender, FBI, and Ronald D. Williams, IRS, and Fraud Investigator Annette D. Beresford, Department of Insurance, Securities, and Banking. They also noted the assistance of Special Agents Brian Smith (FBI), Lori Garner (IRS), Cindy Buskey (DEA), Aaron Ybarra (ATF), and Deena P. Wilson (Social Security Administration, Office of the Inspector General) and Arlington County Police Department members James O’Daniel and Steven Meinke. In addition, they commended paralegal specialists Melanie Howard and Jeanne Latimore-Brown, legal assistant April Peeler, Kimberly Smith, Litigation Support, Assistant U.S. Attorneys William R. Cowden, William B. Wiegand, Diane Lucas, Judith A. Kidwell, former Assistant U.S. Attorney James Flood, and Assistant U.S. Attorney Virginia Cheatham, who prosecuted the case.