Many of you will have read in the news last week that the FBI has announced a major crackdown on mortgage fraud. Because there are so many separate cases and news stories involved we have created page on the site just to cover these events. For now and the foreseeable future we will continue to track new cases and results etc and update the site accordingly.
Please click here to see the new page which can also be found in the left hand menu.
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.
]]>“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:
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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]]>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.
]]>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.
]]> According to the indictment, Mr. Bachman created the alter ego of “Tyler Jefferies” and over time built a credit profile for that identity based upon a social security number stolen from a child in Kentucky. Among other things, the indictment alleges that Mr. Bachman created a fake New Mexico driver license for Jefferies and used it to obtain valid driver’s licenses for Jefferies in Utah and California. Using the Jefferies identity, Bachman obtained credit cards and loans and made enough payments, by moving money between and among these accounts and other accounts, to manufacture a credit history and good credit rating for Jefferies.
Then, as charged in the indictment, Bachman obtained a primary and secondary mortgage loan in the total amount of $960,000 from Chase Bank and Flagstar Bank to purchase a residence in Lake Forest, California, through a mortgage broker in San Diego. All of the loans used to create the Jefferies identity and the mortgage loans are in default. Finally, according to Assistant United States Attorney Mitch Dembin, who is prosecuting the case, in connection with the investigation of another series of loans, which resulted in the filing of charges against former NFL player Benjamin Coleman, Mr. Bachman used the identity of a third person, whose identity was stolen and used in that scheme, in discussions with the United States Secret Service in an attempt to deflect the investigation away from him and his associate, Mr. Coleman. Mr. Coleman has been charged separately in Criminal Case No. 07cr3246-DMS pending in United States District Court in San Diego.
This case was investigated by Special Agents of the United States Secret Service, the Internal Revenue Service - Criminal Investigation Division and Detectives of the San Diego Police Department under the auspices of the San Diego Regional Fraud Task Force.
Mr. Bachman will appear before the Honorable Anthony J. Battaglia, United States Magistrate Judge for arraignment and a bail hearing on March 13, 2008.
]]>Eduard Sargsyan, 55, was arrested by special agents with the Federal Bureau of Investigation last Thursday afternoon after completing loan documents at a Bank of American branch in Sherman Oaks.
According to a criminal complaint filed last Friday, last fall Sargsyan rented the Valley Village home, which was owned by a family trust. In February, a “Trust Transfer Deed” was recorded with the Los Angeles County Recorder’s Office, which transferred title of the home to Sargsyan. In March, Sargsyan used Bank of America’s website to apply for a home equity line of credit on the property. During two meetings at Bank of America where an FBI agent posed as a loan officer, Sargsyan said he owned the home and wanted prompt funding of a $500,000 line of credit. Sargsyan was arrested at the bank branch.
Appearing in United States District Court on Friday afternoon, Sargsyan, who is also known as Genadi Verdiyan and Gehadi Verdiyan, was ordered held without bond until a detention hearing scheduled for this Thursday. An arraignment in the case is scheduled for April 28.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty.
The bank fraud charge in the criminal complaint carries a statutory maximum penalty of 30 years in federal prison.
This case was investigated by the Federal Bureau of Investigation, which received the full cooperation of Bank of America.
According to the indictment, Ms. Camus, 36, is alleged to have made a number of misrepresentations about a money lending investment, where she promised fixed returns and the return of the principle investment within a fixed period of time. The indictment alleges that Ms. Camus made one or more of the following material false representations and promises in order to induce the investor to give her money:
Instead, according to the indictment, Ms. Camus used the money she obtained from investors for personal expenses and to pay back prior investors.
The maximum statutory penalty for each count of mail fraud, in violation of 18 U.S.C. § 1341, and wire fraud, in violation of 18 U.S.C. § 1343 is 20 years in prison, and a fine of $250,000, plus restitution if appropriate. 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.
Christina Hua is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Wilson Wong. The prosecution is the result of a two year investigation by the Federal Bureau of Investigation.
The Indictment alleges that William Bowling Jr., the buyer/borrower, purchased 24 investment properties in Kettering, Ohio and that the paperwork submitted to the lender, Countrywide Home Loans, represented that the down-payment was coming from Bowling Jr. The 24 purchases each originated and were processed through Countrywide Home Loan’s office in Ft. Mitchell, Ky.
The Indictment also alleges that Georgia Bowling, who acted as the real estate agent for Bowling Jr., caused for false representations regarding alleged repair-work to be made on the loan documents that were submitted to Countrywide. These false representations allowed the conspirators to use loan funds to provide for Bowling Jr.’s required down-payment on all 24 purchases. The Indictment also alleges that Gregg Russell, Georgia Bowling’s boss at the Middletown real estate brokerage in Ohio at which they worked, participated in the conspiracy. He allegedly obtained the cashier’s checks that were presented at each of the 24 closings knowing they would be presented as Bowling Jr.’s funds for the down payment when in fact they were not.
James A. Zerhusen, Acting United States Attorney for the Eastern District of Kentucky, and Paul R. Johnson, Special Agent in Charge, United States Secret Service, jointly made the announcement today after a federal grand jury in Covington, Ky., returned the Indictment.
The investigation preceding the Indictment was conducted by the United States Secret Service. The Indictment was presented to the grand jury by Assistant United States Attorney Benjamin G. Dusing.
The defendants’ appearance before the United States District Court has not yet been set. If convicted, each defendant faces a maximum prison sentence of 20 years in prison. However, any sentence following conviction would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
]]>According to the plea agreement, from July 2006 through September 2007, URIBE committed wire fraud and aggravated identity theft. URIBE was a licensed mortgage broker in Florida and was able to originate mortgage loans. URIBE and others fraudulently submitted mortgage applications under false pretenses, obtaining and disbursing the proceeds of those loans, including directing portions of the proceeds to bank accounts in their control.
URIBE was one of the principals behind Bay General Contracting Services, LLC (herein after “Bay General”). Bay General was not a licensed contracting service in the State of Florida. On at least twenty separate real estate closings, monies were fraudulently disbursed to Bay General. Numerous Notices of Commencement were filed with the Clerks of Hillsborough, Pinellas, Pasco, and Citrus counties but no construction work was actually done. Despite the monies transferred and Notices of Commencement, Bay General did not have a single employee nor was there a single instance in which Bay General or anyone employed by Bay General actually performed any of the work related to the Notices. In reality, URIBE and others used Bay General to serve as a vehicle to improperly inflate the value of the properties in question, to strip actual and fraudulently created equity out of properties, and to serve as a vehicle for syphoning the proceeds from fraudulently obtained loans.
As a result of the scheme to defraud, URIBE and others caused lenders to fund more than thirty-two (32) loans for a total of more than $6 million in fraudulently obtained loans issued upon the false representations made by URIBE and others in the various loan applications and documents as well as in the providing of the false documents themselves.
The case was investigated by the Tampa Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Thomas N. Palermo.
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