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Entries in bankruptcy fraud (4)

Friday, November 13, 2009 at 10:03 AM
10:03AM

Idaho man pleads guilty in Bankruptcy fraud, failed to disclose real estate

DateFriday, November 13, 2009 at 10:03AM

In the following press release Thomas E. Moss, United States Attorney for the District of Idaho announced that Reed J. Bowen, Jr., 50, of Meridian, Idaho, pled guilty today in United States District Court in Boise to one count of bankruptcy fraud.

Bowen admitted that in 2004, he committed a scheme to defraud his creditors and the bankruptcy trustee. Bowen disclosed in bankruptcy that he had only a lease on his Meridian home and fraudulently failed to disclose a Real Estate Agreement and Contract for Deed that granted him an exclusive right to purchase the home for a fixed price. Bowen purchased the home, pursuant to the contract, shortly after bankruptcy and immediately obtained substantial equity in the home. Bowen’s bankruptcy disclosures also included an interest in a McCall cabin, however, Bowen fraudulently inflated the mortgages against that cabin and thus underrepresented his equity in it. He sold the cabin while in bankruptcy and netted substantial equity from the sale. In the bankruptcy proceedings Bowen discharged over $3 million in unsecured debt so he could finalize the purchase of his Meridian home. The United States agreed to dismiss additional charges pending against Bowen arising out of his bankruptcy in exchange for his guilty plea.

“Over the past five years, bankruptcy filings have averaged 1.37 million annually, with the IRS a party to approximately 40 percent of these filings. The detection and prosecution of bankruptcy fraud continues to be a priority for the IRS, as well as the Department of Justice,” said IRS Special Agent in Charge Christopher M. Sigerson.

“Fraudulent conduct in bankruptcy results in serious consequences which undermine public confidence in the system, and taint the reputation of honest citizens seeking protection under the bankruptcy statutes,” said Thomas E. Moss, United States Attorney.

Sentencing is set for January 19, 2010, before U.S. District Judge Edward J. Lodge in Boise.

The federal charge carries a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence following conviction, however, 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.

The case was investigated by the Internal Revenue Service, Criminal Investigation Division, in cooperation with the United States Trustee Program.

Print ArticlePrint Article | | | | AuthorThe Editor - Ian Shuter - ACFE, DMS
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Tuesday, September 22, 2009 at 11:07 AM
11:07AM

NH couple indicted for stealing ID of owner of their residence to prevent foreclosure

DateTuesday, September 22, 2009 at 11:07AM

In the following press release John P. Kacavas, United States Attorney for the District of New Hampshire announced that a husband and wife formerly of Nashua, New Hampshire, have been indicted by federal Grand Jury for conspiracy to commit bankruptcy fraud and related crimes. The three count indictment charges Christina LoBrutto, 40, and Luigi or Louis LoBrutto, 41, with conspiracy to commit bankruptcy fraud and charges Luigi LoBrutto with making a false statement to the U.S. Bankruptcy court and aggravated identity theft.

The indictment alleges that from about April through about June 2007, the LoBruttos agreed to file a fraudulent bankruptcy petition in the name of the person who owned their Nashua home in an effort to prevent Wells Fargo Bank from foreclosing on the property. According to the indictment, the owner of the LoBruttos’ house did not consent to the use ofhis identity on the bankruptcy petition and did not authorize the filing of a bankruptcy petition in his name.

The indictment also alleges that the LoBruttos impersonated the owner of the house and his wife, retained an attorney to file the bankruptcy petition, and provided the attorneywith false identification information to be used on the petition.

In addition to conspiracy to commit bankruptcy fraud, Luigi LoBrutto was also charged with making a materially false statement to the Bankruptcy Court and aggravated identity theft in connection with filing a bankruptcy petition using another person’s identity.

The LoBruttos currently reside in Somerville, Massachusetts. They appeared in U.S. District Court in Concord, New Hampshire, today to be arraigned on these charges. The court ordered that they both be released under the supervision of the United States Probation Office pending trial, which was scheduled for November 3, 2009.

If convicted of conspiracy to commit bankruptcy fraud, the LoBruttos each face a possible maximum sentence of five years in prison and a possible maximum fine of $250,000. Luigi LoBrutto also faces a possible maximum five year prison term for making a false material statement to the Bankruptcy Court and a mandatory sentence of two years inprison for aggravated identity theft. He is also facing possible maximum fines of $250,000 for each of these crimes.

An indictment is only an allegation and not proof of criminal conduct. As in all criminal cases, the defendants are presumed innocent until proven guilty beyond a reasonabledoubt.

This case is being investigated by the FBI and is being prosecuted by Assistant United States Attorney Mark S. Zuckerman.

Print ArticlePrint Article | | | | AuthorThe Editor - Ian Shuter - ACFE, DMS
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Wednesday, August 26, 2009 at 10:37 AM
10:37AM

Michigan man pleads guilty to a bankruptcy fraud used to try and prevent foreclosure

DateWednesday, August 26, 2009 at 10:37AM

In the following press release Terrence Berg, United States Attorney for the Eastern District of Michigan announced that a 30 year-old former resident of Orchard Lake, Michigan pleaded guilty today to an Information charging him with having fraudulent bankruptcy petitions filed in order to defraud his mortgage lender and forestall foreclosure on his mortgage and take possession of his property, United States Attorney Terrence Berg announced today.

Pleading guilty before U.S. District Judge Bernard A. Friedman was James Whitaker, a former resident of Orchard Lake, Michigan.

In 2007, Mr. Whitaker’s mortgage holder, Deutsche Bank, began foreclosure proceedings on a $970,000 mortgage Whitaker had obtained on a residence he occupied located on [4904] Elmgate Drive in Orchard Lake. Mr. Whitaker, however, held title to the property in his sister-in-law’s name. When the bank began eviction proceedings in the 48th District Court in Bloomfield Hills, Michigan to take possession of the property, Whitaker had a bankruptcy petition preparer file several pro se bankruptcy petitions in his sister-in-law’s name in order to stay the eviction action in the State court. After each fraudulent petition was dismissed by the U.S. Bankruptcy, Whitaker would have another one filed. By doing this, Whitaker was able to delay his eviction from the home for over a year and a half during which time the value of the property substantially decreased. Because each of the four fraudulent bankruptcy petitions filed in his sister-in-law’s name had been abandoned, the U.S. Bankruptcy Court eventually issued an order to Whitaker’s sister-in-law to show cause why she shouldn’t be held in contempt. The sister-in-law failed to appear in bankruptcy court which eventually led to her arrest at her place of work. She was released when she convincingly explained to the bankruptcy judge that she didn’t reside at the Elmgate property and didn’t know anything about the fraudulent bankruptcy petitions being filed in her name.

U.S. Attorney Berg stated, “Mr. Whitaker’s filing of these fraudulent petitions in the U.S. Bankruptcy Court had serious personal consequences for his sister-in-law. He executed this scheme to mislead the State court system and his creditor. This office and federal law enforcement will continue to redress such abuse and deception.”

Mr. Whitaker is scheduled to be sentenced by Judge Friedman on November 17 at 11 a.m. The matter was referred by U.S. Bankruptcy Judge Thomas Tucker in Detroit and the investigation of this case was conducted by the Federal Bureau of Investigation.

Print ArticlePrint Article | | | | AuthorThe Editor - Ian Shuter - ACFE, DMS
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Tuesday, August 25, 2009 at 1:36 PM
1:36PM

Jersey City man pleads guilty in bankruptcy fraud

DateTuesday, August 25, 2009 at 1:36PM

In the following press release Ralph J. Marra, Acting United States Attorney for the District of New Jersey announced that a Jersey City man pleaded guilty today to committing bankruptcy fraud. Roland Smith, 41, pleaded guilty before U.S. District Chief Judge Garrett E. Brown, Jr., to a one-count Information that charges him with bankruptcy fraud. Judge Brown continued the defendant’s release on a $150,000 bond pending sentencing, which is scheduled for Dec 7.

At his plea hearing, Smith admitted that on Oct. 31, 2003, he obtaining a $137,750 residential mortgage loan for a Jersey City property using a false name and social security number. Smith admitted that on the loan application, he indicated that his name was “Ronald Smith.”

Smith admitted that he later defaulted on the mortgage payments and foreclosure proceedings commenced by the mortgage lender. Furthermore, Smith admitted that on July 13, 2005, he filed a bankruptcy petition under the false name and social security number in an attempt to reorganize and discharge the fraudulently-obtained debt.

The charge of bankruptcy fraud carries a maximum sentence of five years in prison and a fine of $250,000, along with an order of restitution.

In determining an actual sentence, Judge Brown will consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant’s criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.

Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Marra credited the staff of Roberta DeAngelis, the Acting U.S. Trustee for the District of New Jersey and Special Agents of the Social Security Administration/Office of the Inspector General, with developing the case against Smith.

The government is represented by Assistant U.S. Attorney Gallucio of the U.S. Attorney’s Commercial Crimes Unit in Newark.

Print ArticlePrint Article | | | | AuthorThe Editor - Ian Shuter - ACFE, DMS
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The information reproduced here has been obtained from various public sources and has been compiled as a service to those interested in the area of mortgage fraud. The accuracy of the information has not been independently verified and as a result, no negative inferences about individuals referenced in the information or their involvement in any scheme to participate in mortgage fraud should be concluded as a result.