Editor Note - This is entry 1 of 8 in the Operation Bad Deeds Case

In the following press release Preet Bharara, the United States Attorney for the Southern District of New York announced that ten defendants are charged in an 11-count Superseding Indictment with perpetrating a mortgage fraud scheme involving loans totaling over $5.6 million for at least 11 different residences, including through a foreclosure rescue scheme. The Superseding Indictment expands on the allegations in the original six-count indictment, which was returned in May 2009, by including six new defendants and multiple new counts.

Original Journal Entry   Superceding Indictment

According to the Superseding Indictment, the defendants identified distressed properties that could be purchased at a low price, usually by targeting homeowners who had fallen behind on their mortgage payments and whose homes were facing foreclosure. In most instances, the defendants induced the homeowners to sell their homes to companies controlled by the defendants, including NNI, LLC, which was controlled by LAVETTE M. BILLS, and Recani Inc., which was controlled by WAYNE GREEN. These companies usually purchased the properties via “short sales,” in which the lenders agreed to sell the properties for less than the balance owed on the loans and to discharge the remainder of the loans. The defendants then resold or “flipped” the properties to thirdparty straw buyers at a higher price, usually on the same day. In other instances, the defendants tricked the homeowners into deeding or selling their homes to other persons, by falsely promising the homeowners that title would be returned to them at a later date or telling the homeowners that they were merely refinancing their homes.

To accomplish this, the defendants also deceived the straw buyers and the lenders who were providing the mortgages to finance the purchases. In some instances, the straw buyers thought that they were helping the homeowner “save” his or her home from foreclosure, or they were told that they were purchasing an investment property. The straw buyers were also often told that they would not need to make mortgage payments on the properties, either because the payments would be made on their behalf, or because the payments would be covered by the rental income from the properties. The defendants convinced lenders to give the straw buyers mortgages to purchase properties the straw buyers could not otherwise afford by falsifying certain personal and financial information about the straw buyers. For example, the defendants prepared and submitted to the lenders documents containing false statements about the straw buyers’ employment, income, and assets.

As a result of their fraud, the defendants profited from their “flips” of the properties; the homeowners lost title to their homes; the straw buyers became liable for hundreds of thousands of dollars in loans they were unable to repay; and the lenders suffered losses from those loans, which eventually went into default.

BILLS was the Chief Executive Officer of MTC Real Estate, Inc., in the Bronx, and KIRK LACEY, OMAR HENRY, and PETER CHEVERE, all worked for MTC during various periods. The defendants, through MTC, identified the distressed homeowners, recruited straw buyers, and prepared fraudulent documents for
submission to the lenders. GREEN and SHERESE W. GLENN processed home mortgage loan applications through various mortgage brokerage firms operating in the New York City area on behalf of MTC and others. REVLON HINDS was the purported President of Recani Inc., and signed closing documents on its behalf. JOSEPH EVANS and JERRY CALONGE recruited straw buyers to obtain home mortgage loans in transactions processed by GREEN and GLENN. MARK BARNETT was a loan officer at Golden First Mortgage
Corporation, who processed fraudulent loan applications for MTC.