Ten indicted in Kansas straw borrower fraud allegations
Thursday, June 11, 2009 at 9:59AM In the following press release Lanny Welch, US Attorney for the District of Kansas announced that ten people have been indicted in a $3 million mortgage fraud case.
They defendants, who are all charged with mortgage fraud are:
Eric M. Rabicoff, 26, Hutchinson, Kan.
Jason L.Rabicoff, 33, Overland Park, Kan.
Lucas R. Collier, 27, Basehor, Kan.
Anthony E. Carollo, 31, Raytown, Mo.
Deborah Saulmon, 50, Olathe, Kan.
Bora Ly, 27, Raytown, Mo.
Anthony “Gabe” Painton, Jr., 29, Kansas City, Mo.
Kong Bun Ly, 29, Kansas City, Mo.
Rebecca Gelwix,24, West Des Moines, Iowa and
Richard Ngek, 25, Lee’s Summit, Mo.
According to the indictment, in 2006 Eric Rabicoff devised a schemeto defraud lenders by recruiting straw buyers to purchase homes that were for sale by owners. It was part of the scheme to submit false information to lenders so that borrowers received loans for which they were not qualified.
The conspirators submitted false information to lenders about borrowers’ employment history, income and rent history. In this way, the conspirators obtained more than $3 million in loans for borrowers who did not in fact qualify for the loans. Conspirators caused loans to be made on properties in Olathe, Kan., Kansas City, Mo., and Lee’s Summit, Mo.
Rabaicoff recruited straw buyers to take title for a short time to houses and to obtain loans on the houses. He convinced the straw buyers he would purchase the homes and remove their names from the loan obligations. He represented that he already had renters for the properties whose rental payments would cover the mortgage payments until Rabicoff purchased the properties from the straw buyers. Rabicoff recruited Lucas R. Collier as a straw buyer. Collier recruited Anthony “Gabe” Painton, Jr., and Boral Ly. They recruited Rebecca Gelwix. Kong Bun Ly and Richard Ngek. None of the straw buyers were in fact qualified to receive home loans.
Jason Rabicoff, who is Eric Rabicoff’s brother, was a loan officer for Apex Financial, a mortgage company in Olathe, Kan., that brokered loans through Clarion Mortgage of Overland Park, Kan. At his brother’s direction, Jason Rabicoff assembled loan files on the straw buyers, including false reports on rent history, employment and income.
Anthony E. Carollo, who is the cousin of Lucas Collier, was the manager of Gourmet Grocers, a small, family-owned, business that all the straw buyers listed as their employer. Carollo was paid to provide false Verification of Employment forms to lenders. Deborah Saulmon, who owned a property management company called Essential Properties, provided false Verfication of Rent forms to lenders.
Eric Rabicoff submitted false invoices to title companies seeking payment for making improvements to properties when in fact the improvements had never been made. The lenders paid the money to MSM Enterprises, a company set up by Rabicoff. At Eric Rabicoff’s direction, Collier, Ly and Painton set up shell companies including Cappo Investment Agency, LL., Global Investing LLC and AJs Investment Group to receive proceeds from the conspiracy.
The government is seeking the forfeiture of more than $3 million on proceeds from the crime.
Upon conviction, the alleged crimes carry the following penalties:
Conspiracy: A maximum penalty of 30 years in federal prison.
Bank Fraud: A maximum penalty of 30 years in federal prison on each count.
Wire fraud: A maximum penalty of 5 years and a fine up to $1 millionon each count.
Unlawful monetary transactions: A maximum penalty of 10 years and a fine up to $250,000 on each count.
The Internal Revenue Service investigated. Assistant U.S. Attorney Christine Kenney and Assistant U.S. Attorney Richard Hathaway are prosecuting.
The Editor - Ian Shuter - ACFE, DMS
Anthony “Gabe” Painton, Jr., 29, Kansas City, Mo., has pleaded guilty to one count of conspiracy to commit bank fraud, U.S. Attorney Lanny Welch said today [Press Release].
In his plea, Painton admitted that beginning in 2006 he conspired with Eric M. Rabicoff and eight other defendants to defraud federally insured financial lenders. The scheme called for Painton and others to become straw buyers who bought houses that were for sale by owners. The straw buyers obtained mortgage loans by submitting false loan applications to lenders. Falsified information including employment history, income and rent history was submitted in order for the straw buyers to obtain loans that they would not otherwise qualify to receive. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing. At the direction of Rabicoff, Painton set up a shell company called AJs Investment Group to receive proceeds from home sales to straw buyers. The conspirators fraudulently obtained a total of more than $3 million in mortgage loans.
Other defendants in the case, all of whom are awaiting trial, include Eric M. Rabicoff, Jason L. Rabicoff, Lucas R. Collier, Anthony E. Carollo, Deborah Saulmon, Bora Ly, Kong Bun Ly, Rebecca Gelwix and Richard Ngek.
The Editor - Ian Shuter - ACFE, DMS
Anthony E. Carollo, 31, Raytown, Mo., and Rebecca Gelwix, 25, Des Moines, IA, have pleaded guilty to mortgage fraud, U.S. Attorney Lanny Welch said today.
Each of them pleaded guilty to one count of conspiracy to commit bank fraud, money laundering and wire fraud. In their pleas, Carollo and Gelwix admitted that beginning in 2006 they conspired with Eric M. Rabicoff and other defendants to defraud federally insured mortgage lenders.
The conspirators arranged for straw buyers to purchase homes that were for sale by owners. They obtained financing for the deals by submitting false loan applications to lenders. False information including employment history, income and rent history was submitted in order for the straw buyers to obtain loans they would not otherwise qualify to receive. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing.
Carollo, who was the manager of a small, family-owned business called Gourmet Grocers, was listed as the employer for all the straw buyers. He provided false verifications of employment that were sent to lenders claiming the straw buyers worked for Gourmet Grocers. He was paid from the proceeds of the loans for providing the false employment verifications.
Gelwix was one of the people recruited by defendant Anthony “Gabe” Painton, Jr., to act as a straw buyers.
The conspirators used the straw buyers’ names, Social Security numbers and dates of birth to complete loan applications. The conspirators provided false information on loan applications because none of the straw buyers would have qualified for loans otherwise. In this manner, the conspirators fraudulently obtained a total of more than $3 million in mortgage loans.
Carollo and Gelwix are set for sentencing Nov. 16, 2009. Each of them faces a maximum penalty of 30 years and a fine up to $1 million. Painton is set for sentencing Oct. 19, 2009.
The Editor - Ian Shuter - ACFE, DMS
Bora Ly, 27, Raytown, Mo., and Deborah Saulmon, 50, Olathe, Kan., have pleaded guilty to mortgage fraud charges, U.S. Attorney Lanny Welch said today.
Each of them pleaded guilty to one count of conspiracy to commit bank fraud, money laundering and wire fraud. In their pleas, Ly and Saulmon admitted that beginning in 2006 they conspired with Eric M. Rabicoff and other defendants to defraud federally insured mortgage lenders.
The conspirators arranged for straw buyers to purchase homes that were for sale by owners. They obtained financing for the deals by submitting false loan applications to lenders. False information including employment history, income and rent history was submitted in order for the straw buyers to obtain loans they would not otherwise qualify to receive. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing.
In her plea, Saulmon admitted her role in the scheme was to use her property management company, Essential Properties, to provide false Verifications of Rent to lenders. The fraudulent information created false rent histories for straw buyers.
In his plea, Ly admitted he acted as a straw buyer for two homes. He also set up a shell company called Global Investing LLC and opened an account at Bank of Blue Valley to launder funds from the conspiracy.
Ly and Saulmon are set for sentencing Dec. 21, 2009.
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