DENVER—Steven J. Mascarenas, 53, of Westminster, Colorado, was
sentenced recently by U.S. District Court Judge Robert E. Blackburn to
serve 72 months in federal prison for wire fraud, making a false
statement to a pretrial services officer, and escape, U.S. Attorney John
Walsh, Denver FBI Special Agent in Charge James Yacone, and
IRS-Criminal Investigation Special Agent in Charge Stephen Boyd
announced. Mascarenas was ordered to spend three years on supervised
release after he serves his term of imprisonment. Judge Blackburn also
ordered Mascarenas to pay restitution totaling $1,776,152.21. Mascarenas
will surrender to the Bureau of Prisons once a facility is designated.
Steven Mascarenas was indicted on April 22, 2010, along with
co-defendants Kathy Mascarenas (wife of Steven) and Katrina Roberts. He
pled guilty on July 3, 2012, before Judge Blackburn. Katrina Roberts
pled guilty and was sentenced to 20 months in prison on July 27, 2012.
Kathy Mascarenas pled guilty and was sentenced to 24 months in prison on
November 6, 2012.
According to court documents, in 2004, Defendant Steven J.
Mascarenas, then an attorney and licensed real estate broker,
orchestrated the purchase and resale of residential properties in The
Broadlands, a subdivision in Broomfield, Colorado. He arranged to have
individuals serve as “credit buyers” to obtain loans, purchase the
properties, and resell them shortly thereafter at inflated prices to
other “credit buyers” in his select group. He concealed from the lenders
that these “credit buyers” were only acting at his direction and were
being compensated after the closings for their participation in having
obtained the loans and purchased the properties.
Mascarenas had Roberts prepare appraisal reports in which she
fraudulently inflated the fair market values of the properties by
$100,000 to $325,000. To make the inflated values in all her reports
appear legitimate, she falsely represented that the purchases, which
were actually sales at market value, were “distressed” sales, or “quick”
sales below market value.
Then, based on the fraudulent appraisals, Steven Mascarenas set the
prices for the resales far beyond their true market values and arranged
for the buyers to obtain 100 percent financing for them.
To ensure that the desired funding would be approved for the buyers
for both the purchases and the resales, Steven Mascarenas caused false
information about their qualifications to be incorporated into their
loan applications to enable them to qualify for the loans.
He caused the proceeds from the second sales to be directed to entities of his choice.
Kathy Mascarenas conducted financial transactions as necessary to facilitate, perpetuate, and conceal the fraud.
All of the loans went into default, and the loss to the lenders was approximately $1,776,162.21.
While out on bond in the fall of 2011, Mascarenas repeatedly lied to
his supervising pretrial services officer, telling him that he was
employed making sandwiches at a local Quizno’s restaurant. In fact, he
was managing the store under the assumed name of “Steven Jay,” in
violation of the conditions of his bond.
In June 2011, as a condition of Steven’s bond, he was required to
reside in a halfway house, and he was not permitted to leave the
facility without permission. Hours before he was to be taken to a prison
facility, he fled. An arrest warrant was issued, and on December 4,
2011, Steven was arrested by the Lakewood Police Department at a motel
in Lakewood, Colorado.
“Mortgage fraud harms everyone involved in buying a home—buyers,
appraisers, real estate agents, and bankers,” said U.S. Attorney John
Walsh. “Lying on mortgage applications is a fraud and a federal criminal
felony. As the financial crisis of 2007 and 2008 showed us, following
the rules in real estate transactions matters—and those who don’t face
time in federal prison.”
“Mortgage fraud has had a significant impact in Colorado,” said
Denver FBI Special Agent in Charge James Yacone. “Mascarenas was an
attorney and licensed realtor who used his professional license to
instill trust in others. His conviction and recent sentencing sends a
clear message that using positions of trust to commit fraud will not be
tolerated.”
“Mortgage fraud erodes our economy and threatens the financial health
of the communities in which we live; this sentence reminds us there are
consequences for committing such fraud,” said Stephen Boyd, Special
Agent in Charge, IRS-Criminal Investigation, Denver Field Office.
This case was investigated by the Federal Bureau of Investigation and
the IRS-Criminal Investigation and prosecuted by Assistant U.S.
Attorneys Linda Kaufman and James Allison
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