NEW HAVEN, CT—A federal jury has convicted two men for their roles in an extensive mortgage fraud scheme arising from the fraudulent purchases of more than 40 properties in New Haven, U.S. Attorney Paul J. Fishman, District of New Jersey, announced today.
Andrew Constantinou, of Unionville, Connecticut, and Jacques Kelly, of Poughkeepsie, New York, were convicted on April 18, 2014, of all counts charged in the indictment following a three-week trial before Chief U.S. District Judge Janet C. Hall. The jury found both men guilty of conspiracy to commit mail, wire, and bank fraud. The jury also found Kelly guilty of one count of wire fraud and one count of making a false statement to a financial institution.
According to documents filed in this case and the evidence at trial:
From 2006 to 2008, Constantinou, Kelly, and others, including Menachem Yosef Levitin, Ronald Hutchison, Charles Lesser, Jeffrey Weisman, Genevieve Salvatore, Bradford Rieger, Lawrence Dressler, and Kwame Nkrumah, conspired to defraud mortgage lenders of millions of dollars of mortgage proceeds by inflating the contract price that the sellers of the properties had actually agreed to accept. The scheme involved multi-family properties in New Haven.
The lower sale price, which ranged from approximately $30,000 to $145,000 less than the contract price, was not disclosed to the lenders from which the buyers obtained financing to purchase the properties. In most of the fraudulent transactions, the buyers did not make any deposits or down payments. Constantinou, Kelly, and their conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits. At or shortly after a closing, the borrowers would often receive thousands to tens of thousands of dollars in cash back, although these payments were not disclosed to the lender.
Constantinou, Kelly, and their conspirators submitted to mortgage lenders false HUD-1 forms that often did not match another, undisclosed HUD-1 form that was actually used to disburse the fraudulently obtained proceeds at the closing. As a result of the submission of the false HUD-1 forms and other false documentation in support of the loan, including fictitious leases and false information about the borrower’s assets and liabilities, the mortgage lenders would issue mortgages based on the inflated sales price.
Constantinou, 57, was a loan officer at GMAC Mortgage from 2006 to 2007 and at Countrywide Home Loans from 2007 to 2008. He submitted and received commissions from fraudulent loans as part of the scheme without disclosing the existence of inflated contract prices, secret contract addenda that contained large repair credits, false leases, and other false documentation. Constantinou worked with an unindicted conspirator, who was a licensed mortgage broker, to originate additional loans as part of the conspiracy.
Kelly, 48, was a corrections officer for the Westchester County Department of Corrections in New York. From December 2006 to May 2007, Kelly purchased eight multi-family properties in New Haven and attempted to purchase a ninth property. He paid no money to purchase the properties and received more than $56,000 from his closings. Kelly also made a fraudulent sale of a New Haven property he owned to conspirator Hutchison in September 2006 but for which Hutchison paid no money at closing.
Nearly all the properties purchased as part of this conspiracy went into default and have been foreclosed upon, causing losses of more than $7 million to lenders.
Constantinou faces a maximum potential penalty of 30 years in prison; his sentencing is scheduled for July 15, 2014. He has been free on bond since February 25, 2013. Kelly faces a maximum potential penalty of 30 years for conspiracy, 20 years for wire fraud, and 30 years for making a false statement; his sentencing is scheduled for July 14, 2014. Kelly has been free on bond since October 6, 2011.
Ten defendants have been charged and convicted for their participation in this mortgage fraud conspiracy, including two loan officers, four attorneys, and a real estate agent. Salvatore, Rieger, Dressler, and Nkrumah have previously been sentenced. Levitin, Hutchison, Lesser, and Weisman each await sentencing.
U.S. Attorney Fishman credited the FBI, the U.S. Postal Inspection Service, the U.S. Department of Housing and Urban Development-Office of Inspector General, and the Federal Housing Finance Agency-Office of Inspector General, which identified multiple Fannie Mae and Freddie Mac loans that went into foreclosure, for the investigation leading to the guilty verdicts.
The government is represented in the criminal cases by Assistant U.S. Attorney David T. Huang and Special Assistant U.S. Attorney John McReynolds of the U.S. Attorney’s Office, District of Connecticut; the parallel civil forfeiture cases are being handled by Assistant U.S. Attorney Julie G. Turbert, U.S. Attorney’s Office, District of Connecticut. The U.S. Attorney for the District of New Jersey has been overseeing the case because of the recusal of the U.S. Attorney’s Office for the District of Connecticut.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
Showing posts with label mortgage fraud. Show all posts
Showing posts with label mortgage fraud. Show all posts
Tuesday, April 22, 2014
Wednesday, April 9, 2014
Philadelphia Man Pleads Guilty in Multi-Million-Dollar Mortgage Fraud Scheme
PHILADELPHIA—Eric Sijohn Brown, 46, of Philadelphia, pleaded guilty today to 20 counts in connection with a mortgage fraud scheme involving KREW Settlement Services. Brown pleaded guilty to conspiracy, two counts of FHA loan fraud, 12 counts of loan fraud, and three counts of tax evasion. Between May 2004 and February 2009, Brown and his co-conspirators inflated purchase prices on loan documents for more than 100 Philadelphia properties, resulting in more than $20 million in fraudulent loan proceeds. A sentencing hearing is scheduled for July 8, 2014. Brown faces a maximum possible sentence of 486 years in prison, including a mandatory two year term, five years of supervised release, a fine of up to $15 million, and $2,000 special assessment. A forfeiture notice was also filed seeking more than $13.7 million from all defendants.
KREW As alleged in the indictment, KREW is an acronym of the first names of Kevin Joseph Franklin, Roderick L. Foxworth, Sr., Eric Sijohn Brown, and Walter Alston Brown, Jr. Settlement Services was a Philadelphia real estate settlement company, and Brown was a general contractor who worked with his co-defendants to identify distressed properties to purchase, typically in the West Philadelphia area. The scheme involved recruiting straw buyers whose credit history and personal information was used to purchase the properties, obtain mortgage loans, and take title to the properties, when, in reality, the properties were owned and controlled by the defendants. Mortgage loan applications were then prepared in the names of the straw buyers containing a host of false information, including false purchase prices, false employment and income information, and false statements about the straw buyers living in the properties. Mortgage brokers—including Roderick Foxworth, Walter Brown, and John William Polosky (charged separately in the Western District of Pennsylvania)—allegedly submitted the fraudulent loan applications to lenders to secure the loans for the buyers, knowing that the information was false.
Charged with Brown were Roderick L. Foxworth, Sr., Cynthia Evette Brown, Walter Alston Brown, Jr., and Kevin Joseph Franklin. Cynthia Brown is alleged to have falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not. Kevin Joseph Franklin, a title agent, is alleged to have falsely prepared two deeds and settlement statements (referred to as Form HUD-1)—one for the seller that showed the actual agreed-upon purchase price and a false one for the lender that showed the grossly inflated purchase price. Franklin is also alleged to have created false title insurance policies for the lenders.
After the loans funded, the seller was paid the agreed-upon purchase price, and the difference between the actual purchase price and the false purchase price quoted to the lender was shared with and distributed by Franklin to Eric Brown, Foxworth, Walter Brown, and Cynthia Brown, and many of these payments were not reflected on the HUD-1 forms.
In addition to the five defendants charged with Brown and the three defendants charged by the Western District of Pennsylvania, seven defendants were charged by information.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
KREW As alleged in the indictment, KREW is an acronym of the first names of Kevin Joseph Franklin, Roderick L. Foxworth, Sr., Eric Sijohn Brown, and Walter Alston Brown, Jr. Settlement Services was a Philadelphia real estate settlement company, and Brown was a general contractor who worked with his co-defendants to identify distressed properties to purchase, typically in the West Philadelphia area. The scheme involved recruiting straw buyers whose credit history and personal information was used to purchase the properties, obtain mortgage loans, and take title to the properties, when, in reality, the properties were owned and controlled by the defendants. Mortgage loan applications were then prepared in the names of the straw buyers containing a host of false information, including false purchase prices, false employment and income information, and false statements about the straw buyers living in the properties. Mortgage brokers—including Roderick Foxworth, Walter Brown, and John William Polosky (charged separately in the Western District of Pennsylvania)—allegedly submitted the fraudulent loan applications to lenders to secure the loans for the buyers, knowing that the information was false.
Charged with Brown were Roderick L. Foxworth, Sr., Cynthia Evette Brown, Walter Alston Brown, Jr., and Kevin Joseph Franklin. Cynthia Brown is alleged to have falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not. Kevin Joseph Franklin, a title agent, is alleged to have falsely prepared two deeds and settlement statements (referred to as Form HUD-1)—one for the seller that showed the actual agreed-upon purchase price and a false one for the lender that showed the grossly inflated purchase price. Franklin is also alleged to have created false title insurance policies for the lenders.
After the loans funded, the seller was paid the agreed-upon purchase price, and the difference between the actual purchase price and the false purchase price quoted to the lender was shared with and distributed by Franklin to Eric Brown, Foxworth, Walter Brown, and Cynthia Brown, and many of these payments were not reflected on the HUD-1 forms.
In addition to the five defendants charged with Brown and the three defendants charged by the Western District of Pennsylvania, seven defendants were charged by information.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Wednesday, April 2, 2014
Delaware County Man Sentenced for Mortgage and Bank Fraud
PHILADELPHIA—Simon H. Aouad, 35, of Garnet Valley, Pennsylgania, was sentenced today to 70 months in prison and restitution of $5,462,682 for a mortgage fraud scheme involving fraudulently obtained mortgages to purchase properties in North Wildwood, New Jersey, and Dorchester, Masschusetts, and a bank fraud scheme involving fraudulently obtained lines of credit at Wachovia Bank, now Wells Fargo Bank. Aouad pleaded guilty to conspiracy, mail fraud, and bank fraud. He was involved in three schemes. In the first, properties primarily located in North Wildwood, New Jersey, were purchased for inflated sale prices and using false borrower income and asset information so that the buyers could obtain kickbacks totaling tens of thousands of dollars, which were not disclosed to the lenders. In the second, lines of credit at Wachovia Bank were obtained using false borrower income and employment information. In the third, the conspirators arranged for sham real estate transactions involving properties located in Dorchester, Massachusetts, in which a straw buyer would purchase properties from one of the conspirators for inflated prices. The sham sales were financed with fraudulently obtained mortgages. The conspirators split the proceeds of the sham sales.
Aouad’s co-conspirators in the North Wildwood scheme included John C. Lucidi, Jr., Daniel Mumbower (who was, at the time, an employee of Wachovia Bank), Timothy Cook, Eric Maratea, and Eric Itzi, all of whom have pleaded guilty to charges stemming from the mortgage fraud scheme. Aouad brought willing buyers, such as Cook, Maratea, and Itzi, to Lucidi, in exchange for fees and kickbacks for each successful buyer. In the Massachusetts mortgage fraud scheme, Aouad identified straw buyers for his co-conspirators, which included a former mortgage broker, and Aouad shared in the proceeds of the sham sales. The mortgages Aouad facilitated in both schemes went into default and caused losses to the lenders of a little more than $5 million.
Aouad’s co-conspirators in the bank fraud scheme included a loan broker by the name of Gerald Cathie, who is charged elsewhere, as well as Daniel Mumbower, a corrupt Wachovia Bank loan officer. Similar to his role in the mortgage fraud schemes, Aouad facilitated the fraudulently obtained Wachovia Bank lines of credit by bringing borrowers to Cathie and Mumbower to apply for the lines of credit using false income and other information. When the loans were funded, the borrowers paid Cathie a fee of five to seven percent of the amount of loan proceeds, Cathie kicked money back to the loan officer, and the loan officer paid Aouad several thousand dollars from the loan proceeds for his role in identifying the borrower. The Wachovia Bank loans that Aouad facilitated went into default and caused losses to Wachovia Bank of approximately $400,000.
In addition to the prison term and restitution, U.S. District Court Judge C. Darnell Jones, II, ordered forfeiture of $3,675,468, a $400 special assessment, and five years of supervised release.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, and the United States Secret Service. It was prosecuted by Assistant United States Attorneys Nancy E. Potts.
Aouad’s co-conspirators in the North Wildwood scheme included John C. Lucidi, Jr., Daniel Mumbower (who was, at the time, an employee of Wachovia Bank), Timothy Cook, Eric Maratea, and Eric Itzi, all of whom have pleaded guilty to charges stemming from the mortgage fraud scheme. Aouad brought willing buyers, such as Cook, Maratea, and Itzi, to Lucidi, in exchange for fees and kickbacks for each successful buyer. In the Massachusetts mortgage fraud scheme, Aouad identified straw buyers for his co-conspirators, which included a former mortgage broker, and Aouad shared in the proceeds of the sham sales. The mortgages Aouad facilitated in both schemes went into default and caused losses to the lenders of a little more than $5 million.
Aouad’s co-conspirators in the bank fraud scheme included a loan broker by the name of Gerald Cathie, who is charged elsewhere, as well as Daniel Mumbower, a corrupt Wachovia Bank loan officer. Similar to his role in the mortgage fraud schemes, Aouad facilitated the fraudulently obtained Wachovia Bank lines of credit by bringing borrowers to Cathie and Mumbower to apply for the lines of credit using false income and other information. When the loans were funded, the borrowers paid Cathie a fee of five to seven percent of the amount of loan proceeds, Cathie kicked money back to the loan officer, and the loan officer paid Aouad several thousand dollars from the loan proceeds for his role in identifying the borrower. The Wachovia Bank loans that Aouad facilitated went into default and caused losses to Wachovia Bank of approximately $400,000.
In addition to the prison term and restitution, U.S. District Court Judge C. Darnell Jones, II, ordered forfeiture of $3,675,468, a $400 special assessment, and five years of supervised release.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, and the United States Secret Service. It was prosecuted by Assistant United States Attorneys Nancy E. Potts.
Friday, March 28, 2014
Former Sacramento-Area Man Sentenced to 30 Months in Mortgage Fraud Scheme
SACRAMENTO, CA—Alexander A. Romaniolis, 48, of Irvine, was sentenced today by United States District Judge Troy L. Nunley to 30 months in prison and a $17,500 fine and forfeiture of more than $400,000 for mortgage fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Romaniolis recruited five straw buyers to purchase eight California residential properties in Rocklin, Roseville, and San Clemente. Romaniolis assisted the straw buyers in providing false information to lenders about their employment, income, assets, and intent to occupy properties as primary residences. In most cases, the straw buyers claimed to be executives of companies created and controlled by Romaniolis. He was responsible for the origination of more than $5 million in residential mortgage loans in the scheme. All the properties were foreclosed on, resulting in a total loss of more than $2 million.
At sentencing, Romaniolis asked to be released for a short period so he could see his family before completing his sentence. Judge Nunley denied that request.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Attorney General’s Mortgage Fraud Task Force. The Huntington Beach Police Department assisted in the arrest. Assistant United States Attorneys Jean M. Hobler and Jeff Spivak prosecuted the case.
According to court documents, Romaniolis recruited five straw buyers to purchase eight California residential properties in Rocklin, Roseville, and San Clemente. Romaniolis assisted the straw buyers in providing false information to lenders about their employment, income, assets, and intent to occupy properties as primary residences. In most cases, the straw buyers claimed to be executives of companies created and controlled by Romaniolis. He was responsible for the origination of more than $5 million in residential mortgage loans in the scheme. All the properties were foreclosed on, resulting in a total loss of more than $2 million.
At sentencing, Romaniolis asked to be released for a short period so he could see his family before completing his sentence. Judge Nunley denied that request.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Attorney General’s Mortgage Fraud Task Force. The Huntington Beach Police Department assisted in the arrest. Assistant United States Attorneys Jean M. Hobler and Jeff Spivak prosecuted the case.
Monday, March 17, 2014
Tenth Defendant Admits Role in $40.8 Million Mortgage Fraud Scheme
CAMDEN, NJ—An Ocean County, New Jersey man today admitted his role in a $40.8 million mortgage fraud conspiracy in which he used his position as a loan officer of Wells Fargo Home Mortgage, Inc. to get the company to release more than $4.6 million based on fraudulent mortgage loan applications, U.S. Attorney Paul J. Fishman announced.
Robert Serao, 48, of Bayville, New Jersey, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to count one of an indictment charging him with conspiracy to commit wire fraud. He is the 10th defendant to plead guilty in the case.
According to documents filed in this case and statements made in court:
While working in various positions—including branch manager, sales manager, and loan officer—within Wells Fargo Home Mortgage Inc., a division of Wells Fargo Bank N.A., Serao entered into a conspiracy with Stephen Corba, Charles Harvath, Joseph Witkowski, and others to submit mortgage loans to his employer for financially unqualified “straw buyers” based upon false and fraudulent information contained in Uniform Residential Loan Applications, HUD-1 Forms, tax returns and other documents.
Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closing on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds.
Nine of Serao’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Harvath, Corba, John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad, and George Lachenmayr, Jr.
The wire fraud conspiracy charge to which Serao pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing for Serao is currently scheduled for June 24, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS-Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The pending charges and allegations against any related defendants are merely allegations, and they are considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza. Esq. Red Bank, New Jersey
Robert Serao, 48, of Bayville, New Jersey, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to count one of an indictment charging him with conspiracy to commit wire fraud. He is the 10th defendant to plead guilty in the case.
According to documents filed in this case and statements made in court:
While working in various positions—including branch manager, sales manager, and loan officer—within Wells Fargo Home Mortgage Inc., a division of Wells Fargo Bank N.A., Serao entered into a conspiracy with Stephen Corba, Charles Harvath, Joseph Witkowski, and others to submit mortgage loans to his employer for financially unqualified “straw buyers” based upon false and fraudulent information contained in Uniform Residential Loan Applications, HUD-1 Forms, tax returns and other documents.
Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closing on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds.
Nine of Serao’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Harvath, Corba, John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad, and George Lachenmayr, Jr.
The wire fraud conspiracy charge to which Serao pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing for Serao is currently scheduled for June 24, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS-Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The pending charges and allegations against any related defendants are merely allegations, and they are considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza. Esq. Red Bank, New Jersey
Friday, March 7, 2014
Bucks County Man Sentenced for Role in Foreclosure Rescue Fraud Scheme
PHILADELPHIA—Edward G. McCusker, 49, of Chesterbrook, Pennsylvania, was sentenced today to five years in prison for a massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million. His wife Jacqueline, 49, of New Hope, Pennsylvania, will be sentenced later today for her role in the crime. A federal jury convicted the couple on June 22, 2011, of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, wire fraud, and mail fraud. U.S. District Court Judge Mary McLaughlin handed down the sentence. In addition to the prison term, McCusker was ordered to forfeit $400,000, pay a fine of $12,500, pay a special assessment of $1,000, and complete three years of supervised release.
The McCuskers operated Axxium Mortgage Inc. along with co-defendant John Bariana, who pleaded guilty and is awaiting sentencing. Co-defendants Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty P.C., also pleaded guilty. Doherty was sentenced yesterday to one year and one day in prison; Bennett’s sentencing is scheduled for March 7, 2014.
The defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.
The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner’s residence to the straw purchaser. The McCuskers, along with Bariana, obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for 10 homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.
Doherty solicited and referred distressed homeowners to Edward McCusker and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.
This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.
The McCuskers operated Axxium Mortgage Inc. along with co-defendant John Bariana, who pleaded guilty and is awaiting sentencing. Co-defendants Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty P.C., also pleaded guilty. Doherty was sentenced yesterday to one year and one day in prison; Bennett’s sentencing is scheduled for March 7, 2014.
The defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.
The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner’s residence to the straw purchaser. The McCuskers, along with Bariana, obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for 10 homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.
Doherty solicited and referred distressed homeowners to Edward McCusker and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.
This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.
Thursday, March 6, 2014
Ponzi and Mortgage Fraud Defendants Plead Guilty
SACRAMENTO, CA—John Hagener, 77, of Granite Bay, and Dawn C. Powers, 43, of Lincoln, separately pleaded guilty today to conspiracy charges, United States Attorney Benjamin B. Wagner announced.
According to court documents, Hagener pleaded guilty to conspiring to commit mail fraud, and Powers pleaded guilty to conspiring to commit wire fraud for their involvement in a mortgage fraud conspiracy and a large-scale Ponzi scheme in Northern California allegedly run by Lawrence Lee Loomis, aka Lawrence Leland Loomis. Loomis and his father-in-law, Hagener, operated a Ponzi scheme in 2007 and 2008 that victimized more than 100 people and caused more than $7 million of losses related to the sale of shares in an investment program called the Naras Funds.
A previously filed indictment charged Loomis and four other defendants, including Powers, in two related mortgage fraud schemes that caused more than $10 million in losses to mortgage lenders and others. The charges are pending against Loomis and three other defendants. An October 2014 trial date has been set before Judge John A. Mendez in Sacramento. The charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Paul A. Hemesath is prosecuting the case. The Securities and Exchange Commission has filed separate proceedings against Hagener in an ongoing case.
Hagener and Powers are scheduled to be sentenced by Judge John A. Mendez on June 10, 2014. They face a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
According to court documents, Hagener pleaded guilty to conspiring to commit mail fraud, and Powers pleaded guilty to conspiring to commit wire fraud for their involvement in a mortgage fraud conspiracy and a large-scale Ponzi scheme in Northern California allegedly run by Lawrence Lee Loomis, aka Lawrence Leland Loomis. Loomis and his father-in-law, Hagener, operated a Ponzi scheme in 2007 and 2008 that victimized more than 100 people and caused more than $7 million of losses related to the sale of shares in an investment program called the Naras Funds.
A previously filed indictment charged Loomis and four other defendants, including Powers, in two related mortgage fraud schemes that caused more than $10 million in losses to mortgage lenders and others. The charges are pending against Loomis and three other defendants. An October 2014 trial date has been set before Judge John A. Mendez in Sacramento. The charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Paul A. Hemesath is prosecuting the case. The Securities and Exchange Commission has filed separate proceedings against Hagener in an ongoing case.
Hagener and Powers are scheduled to be sentenced by Judge John A. Mendez on June 10, 2014. They face a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Friday, February 21, 2014
Former Executive Sentenced to 10 Years in Prison for Brokering $30 Million in Fraudulent Mortgage Loans
PITTSBURGH—A resident of Finleyville, Pennsylvania, has been sentenced in federal court to 10 years of imprisonment on his conviction of wire fraud conspiracy, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence yesterday on David McCloskey, 49, of School Place, Finleyville, Pennsylvania.
According to information presented to the court, McCloskey operated a mortgage broker company called First Atlantic Financial that brokered more than $30 million worth of fraudulent loans. The loans were fraudulent because the loan applications contained false representations related to the borrowers’ income and assets, which were supported by bogus documents prepared by McCloskey and his co-conspirators. Fraudulent appraisals were also part of McCloskey’s conspiracy. Most of the fraudulent appraisals were prepared by co-conspirator Kenneth Cowden, who was not licensed to prepared appraisals. His appraisals also drastically overstated the values of the properties serving as collateral for the loans.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of McCloskey.
The Mortgage Fraud Task Force is composed of investigators from federal, state, and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.
Chief United States District Judge Joy Flowers Conti imposed the sentence yesterday on David McCloskey, 49, of School Place, Finleyville, Pennsylvania.
According to information presented to the court, McCloskey operated a mortgage broker company called First Atlantic Financial that brokered more than $30 million worth of fraudulent loans. The loans were fraudulent because the loan applications contained false representations related to the borrowers’ income and assets, which were supported by bogus documents prepared by McCloskey and his co-conspirators. Fraudulent appraisals were also part of McCloskey’s conspiracy. Most of the fraudulent appraisals were prepared by co-conspirator Kenneth Cowden, who was not licensed to prepared appraisals. His appraisals also drastically overstated the values of the properties serving as collateral for the loans.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of McCloskey.
The Mortgage Fraud Task Force is composed of investigators from federal, state, and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.
Monday, February 10, 2014
Former Mayor of Manalapan Arrested on Mortgage Fraud, Identity Theft, and Obstruction of Justice Charges
TRENTON, NJ—The former mayor of Manalapan, New Jersey was arrested today on charges that he submitted falsified 2007 and 2008 tax returns in order to purchase a farm property in Manalapan and that he provided federal investigators and a federal grand jury with a fabricated document in 2013, U.S. Attorney Paul J. Fishman announced.
Andrew Lucas, 36, was arrested as a result of an 11-count indictment charging him with wire fraud, illegal monetary transaction, loan application fraud, false statements to the IRS, aggravated identity theft, obstruction of a grand jury investigation, and falsification of records in a federal investigation. Lucas is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.
According to the indictment unsealed today:
On December 15, 2009, Lucas submitted a loan application to a New Jersey bank requesting $525,000 to finance his purchase of the Burke Farm property in Manalapan. Lucas provided the bank with falsified versions of his 2007 and 2008 tax returns, as well as a falsified version of a 2007 tax return for a relative whose name was also on the loan application. Lucas also falsely reported that he had a total of $210,000 in cash.
Lucas owned and operated Lucas Capital Advisors LLC (Lucas Capital), through which he served as an investment advisor and manager to multiple individuals. To obtain the $250,000 down payment for the property, Lucas approached Victim 1, who was a client of Lucas Capital, to pitch an investment in an entity called VLM Investments LLC (VLM). On February 15, 2010, Lucas presented a written note to Victim 1 that stated that the $250,000 investment was to be secured by “...interest in the equipment, fixtures, inventory, and accounts receivable” of VLM. However, Lucas failed to inform Victim 1 that at the time the note was signed, VLM did not exist. Lucas also failed to disclose to Victim 1 that Lucas intended to make personal use of the funds. It was not until three days later, on February 18, 2010, that Lucas created VLM by registering it with the state of New Jersey and the IRS, using the name and Social Security number of Lucas’s out-of-state relative, Victim 2, without Victim 2’s knowledge or permission.
On February 22, 2010, Lucas wired $250,000 from Victim 1’s Lucas Capital investment account to a VLM bank account that had Lucas as the only authorized signer. On March 1, 2010, Lucas withdrew this money in the form of a bank check, which he provided the next day to the closing attorney for the purchase of the Burke Farm property.
Lucas also filed tax returns for VLM for tax years 2011 and 2012, both times listing Victim 2’s name and Social Security number without Victim 2’s knowledge or permission.
Federal investigators served Lucas with subpoenas on February 7, 2013, for the records of VLM and Lucas Capital Advisors. In response, Lucas provided federal authorities with a fabricated and backdated letter purporting to be from Victim 2 concerning a transaction for the purchase of the Burke Farm property.
The counts of wire fraud and falsification of records in a federal investigation are each punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Loan application fraud is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Illegal monetary transaction and obstruction of a grand jury investigation are each punishable by a maximum potential penalty of 10 years. Each of the charges of false statements to the IRS is punishable by a maximum potential penalty of five years in prison. Aggravated identity theft is punishable by a mandatory prison term of two years, to be run consecutive to any other sentence.
U.S. Attorney Fishman credited special agents of the FBI Red Bank Office, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and investigators with the U.S. Attorney’s Office, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton and Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Special Prosecutions Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Andrew Lucas, 36, was arrested as a result of an 11-count indictment charging him with wire fraud, illegal monetary transaction, loan application fraud, false statements to the IRS, aggravated identity theft, obstruction of a grand jury investigation, and falsification of records in a federal investigation. Lucas is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.
According to the indictment unsealed today:
On December 15, 2009, Lucas submitted a loan application to a New Jersey bank requesting $525,000 to finance his purchase of the Burke Farm property in Manalapan. Lucas provided the bank with falsified versions of his 2007 and 2008 tax returns, as well as a falsified version of a 2007 tax return for a relative whose name was also on the loan application. Lucas also falsely reported that he had a total of $210,000 in cash.
Lucas owned and operated Lucas Capital Advisors LLC (Lucas Capital), through which he served as an investment advisor and manager to multiple individuals. To obtain the $250,000 down payment for the property, Lucas approached Victim 1, who was a client of Lucas Capital, to pitch an investment in an entity called VLM Investments LLC (VLM). On February 15, 2010, Lucas presented a written note to Victim 1 that stated that the $250,000 investment was to be secured by “...interest in the equipment, fixtures, inventory, and accounts receivable” of VLM. However, Lucas failed to inform Victim 1 that at the time the note was signed, VLM did not exist. Lucas also failed to disclose to Victim 1 that Lucas intended to make personal use of the funds. It was not until three days later, on February 18, 2010, that Lucas created VLM by registering it with the state of New Jersey and the IRS, using the name and Social Security number of Lucas’s out-of-state relative, Victim 2, without Victim 2’s knowledge or permission.
On February 22, 2010, Lucas wired $250,000 from Victim 1’s Lucas Capital investment account to a VLM bank account that had Lucas as the only authorized signer. On March 1, 2010, Lucas withdrew this money in the form of a bank check, which he provided the next day to the closing attorney for the purchase of the Burke Farm property.
Lucas also filed tax returns for VLM for tax years 2011 and 2012, both times listing Victim 2’s name and Social Security number without Victim 2’s knowledge or permission.
Federal investigators served Lucas with subpoenas on February 7, 2013, for the records of VLM and Lucas Capital Advisors. In response, Lucas provided federal authorities with a fabricated and backdated letter purporting to be from Victim 2 concerning a transaction for the purchase of the Burke Farm property.
The counts of wire fraud and falsification of records in a federal investigation are each punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Loan application fraud is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Illegal monetary transaction and obstruction of a grand jury investigation are each punishable by a maximum potential penalty of 10 years. Each of the charges of false statements to the IRS is punishable by a maximum potential penalty of five years in prison. Aggravated identity theft is punishable by a mandatory prison term of two years, to be run consecutive to any other sentence.
U.S. Attorney Fishman credited special agents of the FBI Red Bank Office, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and investigators with the U.S. Attorney’s Office, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton and Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Special Prosecutions Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Friday, February 7, 2014
Alabama Man Admits Attempted Murder of Witness, Mortgage Fraud Conspiracy, and Money Laundering
CAMDEN, NJ—An Alabama man admitted today to conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Kinard Henson, 41, of Ventress, Alabama, also admitted to the attempted murder of a straw buyer who was a witness to the mortgage fraud scheme.
Henson pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, and one count of attempted murder of a witness in a federal case.
According to the documents filed in this case and statements made in court:
Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Two additional defendants, Nicholas Tarsia, 65, of Totowa, New Jersey, and Mashon Onque, 43, of East Orange, New Jersey, were charged in November 2013 with conspiracy to commit wire fraud. Tarsia was also charged with one count of conspiracy to commit money laundering.
Henson’s conspirators, including Timothy Ricks, 46, of East Orange, New Jersey, who pleaded guilty before Judge Simandle on February 27, 2013, located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties—located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey, and in Naples, Florida—to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Henson recruited one of the straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, paystubs, bank statements, and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Henson and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds from his conspirators, after his conspirators had funds wired or checks deposited into various accounts they controlled. Henson’s conspirators also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.
The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. The attempted murder of a witness charge carries a maximum potential penalty of 30 years in prison and a $250,000 fine. Henson’s is scheduled to be sentenced July 11, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, for their roles in the ongoing investigation.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Kinard Henson, 41, of Ventress, Alabama, also admitted to the attempted murder of a straw buyer who was a witness to the mortgage fraud scheme.
Henson pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, and one count of attempted murder of a witness in a federal case.
According to the documents filed in this case and statements made in court:
Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Two additional defendants, Nicholas Tarsia, 65, of Totowa, New Jersey, and Mashon Onque, 43, of East Orange, New Jersey, were charged in November 2013 with conspiracy to commit wire fraud. Tarsia was also charged with one count of conspiracy to commit money laundering.
Henson’s conspirators, including Timothy Ricks, 46, of East Orange, New Jersey, who pleaded guilty before Judge Simandle on February 27, 2013, located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties—located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey, and in Naples, Florida—to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Henson recruited one of the straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, paystubs, bank statements, and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Henson and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds from his conspirators, after his conspirators had funds wired or checks deposited into various accounts they controlled. Henson’s conspirators also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.
The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. The attempted murder of a witness charge carries a maximum potential penalty of 30 years in prison and a $250,000 fine. Henson’s is scheduled to be sentenced July 11, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, for their roles in the ongoing investigation.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Friday, January 31, 2014
CEO of Free Truth Enterprises Sentenced to Prison for Tax Fraud and Mortgage Loan Fraud
CINCINNATI, OH—Regina Shields, 41, of Cincinnati, Ohio, was sentenced in US. District Court to 12 months and one day in prison and ordered to pay $202,806 in restitution to the Internal Revenue Service and the lender she defrauded in a mortgage fraud scam.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by Chief U.S. District Court Judge Susan J. Dlott.
Shields pleaded guilty in June 2013 to one count of filing a false income tax return and one count of wire fraud. According to court documents, Shields formed a non-profit corporation called Free Truth Enterprises and has served as the president and CEO since 2000. From 2007 through 2010, Shields filed federal income tax returns with the IRS claiming $61,315 in false claims for income tax refunds.
“The mortgage loan offense involves a brazen scheme whereby she bid for and won a sheriff’s auction for a property that was in foreclosure,” Assistant U.S. Attorney Tim Mangan told the court. “She then purported to pay for the property using a check that had insufficient funds. To make matters worse, the defendant then used this temporary appearance of title to apply for a sizable loan from Quicken Loans in excess of $140,000. She then used the proceeds to purchase a luxury car.”
Shields’ sentence includes restitution to the IRS in the amount of $61,315 and restitution in the amount of $141,491 to Title Source Inc. (related to Quicken Loans).
Stewart commended the cooperative investigation by special agents of IRS-Criminal Investigation and the FBI, Assistant United States Attorney Timothy Mangan who prosecuted the case.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by Chief U.S. District Court Judge Susan J. Dlott.
Shields pleaded guilty in June 2013 to one count of filing a false income tax return and one count of wire fraud. According to court documents, Shields formed a non-profit corporation called Free Truth Enterprises and has served as the president and CEO since 2000. From 2007 through 2010, Shields filed federal income tax returns with the IRS claiming $61,315 in false claims for income tax refunds.
“The mortgage loan offense involves a brazen scheme whereby she bid for and won a sheriff’s auction for a property that was in foreclosure,” Assistant U.S. Attorney Tim Mangan told the court. “She then purported to pay for the property using a check that had insufficient funds. To make matters worse, the defendant then used this temporary appearance of title to apply for a sizable loan from Quicken Loans in excess of $140,000. She then used the proceeds to purchase a luxury car.”
Shields’ sentence includes restitution to the IRS in the amount of $61,315 and restitution in the amount of $141,491 to Title Source Inc. (related to Quicken Loans).
Stewart commended the cooperative investigation by special agents of IRS-Criminal Investigation and the FBI, Assistant United States Attorney Timothy Mangan who prosecuted the case.
Wednesday, January 29, 2014
Long Island Couple Involved in Decade-Long Mortgage Fraud Scheme in Bridgeport Sentenced to Prison
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that Winston Shillingford, 56, and his wife, Marleen Shillingford, 47, of Nesconset, New York, were sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to prison terms of 48 months and 36 months, respectively, for operating a multi-million-dollar mortgage fraud scheme that involved more than 40 properties in Bridgeport, Connecticut. Both defendants will serve three years of supervised upon their release from prison.
According to court documents and statements made in court, the Shillingfords were involved in the operation of Waikele Properties Corp., a real estate company with offices in Bridgeport and Garden City, New York. From approximately 2001 to August 2011, the Shillingfords, Robert Ilunga, and others conspired to obtain fraudulent mortgages for the purchase of more than 40 multi-family properties in Bridgeport. As part of the scheme, the Shillingfords and their co-conspirators purchased existing multi-family houses and vacant parcels of land and erected new houses on them to sell. The co-conspirators recruited individuals to purchase the properties, acted as the buyers’ real estate agent, and assisted the buyers in applying for residential mortgage loans to purchase the houses. The co-conspirators then prepared loan applications for the buyers that included fraudulent information concerning, among other things, the buyers’ employment, income, assets, and liabilities; previous property ownership; and intention to make the properties their primary residences. The co-conspirators also provided fraudulent supporting documentation with the loan applications, including false letters from fictitious employers, false earnings statements, and fraudulent bank records.
After the loans were approved, the illicit proceeds of the scheme were wired into the Waikele Properties bank account and then transferred to members of the conspiracy. Some of the proceeds also were used to continue the mortgage fraud scheme.
Contrary to the representations made on the loan applications, several straw purchasers never occupied the houses as their primary residences and subsequently defaulted on the loans.
The parties have agreed that victim financial institutions suffered losses of between $2.5 million and $7 million as a result of this scheme. A restitution order will be issued after further court proceedings.
In October 2011, Winston and Marleen Shillingford each pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
Robert Ilunga, of Naugatuck, pleaded guilty to the same charges and is scheduled to be sentenced on January 31.
This investigation is being conducted by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, the U.S. Department of Housing and Urban Development’s Office of Inspector General, and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
This case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and David T. Huang
According to court documents and statements made in court, the Shillingfords were involved in the operation of Waikele Properties Corp., a real estate company with offices in Bridgeport and Garden City, New York. From approximately 2001 to August 2011, the Shillingfords, Robert Ilunga, and others conspired to obtain fraudulent mortgages for the purchase of more than 40 multi-family properties in Bridgeport. As part of the scheme, the Shillingfords and their co-conspirators purchased existing multi-family houses and vacant parcels of land and erected new houses on them to sell. The co-conspirators recruited individuals to purchase the properties, acted as the buyers’ real estate agent, and assisted the buyers in applying for residential mortgage loans to purchase the houses. The co-conspirators then prepared loan applications for the buyers that included fraudulent information concerning, among other things, the buyers’ employment, income, assets, and liabilities; previous property ownership; and intention to make the properties their primary residences. The co-conspirators also provided fraudulent supporting documentation with the loan applications, including false letters from fictitious employers, false earnings statements, and fraudulent bank records.
After the loans were approved, the illicit proceeds of the scheme were wired into the Waikele Properties bank account and then transferred to members of the conspiracy. Some of the proceeds also were used to continue the mortgage fraud scheme.
Contrary to the representations made on the loan applications, several straw purchasers never occupied the houses as their primary residences and subsequently defaulted on the loans.
The parties have agreed that victim financial institutions suffered losses of between $2.5 million and $7 million as a result of this scheme. A restitution order will be issued after further court proceedings.
In October 2011, Winston and Marleen Shillingford each pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
Robert Ilunga, of Naugatuck, pleaded guilty to the same charges and is scheduled to be sentenced on January 31.
This investigation is being conducted by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, the U.S. Department of Housing and Urban Development’s Office of Inspector General, and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
This case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and David T. Huang
Norwich Resident Sentenced to 30 Months in Prison for Role in Mortgage Fraud Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that Marc Jean, 44, a citizen of Haiti residing in Norwich, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 30 months of imprisonment, followed by three years of supervised release, for his role in an extensive mortgage fraud scheme.
According to court documents and statements made in court, between 2006 and 2010, Syed Babar of New London orchestrated a scheme to obtain millions of dollars in residential real estate loans through the use of sham sales contracts, false loan applications, and fraudulent property appraisals. The scheme involved nearly 30 properties in Connecticut, most of which ended up in foreclosure, and resulted in a loss of more than $4 million to various private lenders and to the Federal Housing Administration, which insured many of the loans that were fraudulently obtained.
Jean conspired with Babar and others and was paid tens of thousands of dollars for acting as a straw buyer in a total of four residential property sales in New London, New Britain, and Meriden. At Babar’s direction, Jean accepted deposits of proceeds from the conspiracy into his bank account in order to show that he made more money than he actually did and that he had cash available for the real estate transactions. In connection with the fraudulent real estate transactions, Jean provided fictitious documentation and made false statements to lenders, including that he intended to occupy the property as his primary residence, that he earned income from a rental property, that he had provided cash for the transaction, and that he was a U.S. citizen.
The loss suffered by the lenders for the four properties was more than $725,000. Judge Thompson ordered Jean to pay restitution in the amount of $688,852.74.
On July 9, 2013, Jean pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud.
Fifteen individuals have been convicted in connection with this scheme. On November 28, 2011, Syed Babar was sentenced to 120 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Eric Glover, Susan Wines, and Liam Brennan.
According to court documents and statements made in court, between 2006 and 2010, Syed Babar of New London orchestrated a scheme to obtain millions of dollars in residential real estate loans through the use of sham sales contracts, false loan applications, and fraudulent property appraisals. The scheme involved nearly 30 properties in Connecticut, most of which ended up in foreclosure, and resulted in a loss of more than $4 million to various private lenders and to the Federal Housing Administration, which insured many of the loans that were fraudulently obtained.
Jean conspired with Babar and others and was paid tens of thousands of dollars for acting as a straw buyer in a total of four residential property sales in New London, New Britain, and Meriden. At Babar’s direction, Jean accepted deposits of proceeds from the conspiracy into his bank account in order to show that he made more money than he actually did and that he had cash available for the real estate transactions. In connection with the fraudulent real estate transactions, Jean provided fictitious documentation and made false statements to lenders, including that he intended to occupy the property as his primary residence, that he earned income from a rental property, that he had provided cash for the transaction, and that he was a U.S. citizen.
The loss suffered by the lenders for the four properties was more than $725,000. Judge Thompson ordered Jean to pay restitution in the amount of $688,852.74.
On July 9, 2013, Jean pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud.
Fifteen individuals have been convicted in connection with this scheme. On November 28, 2011, Syed Babar was sentenced to 120 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Eric Glover, Susan Wines, and Liam Brennan.
Tuesday, January 28, 2014
Former Modesto Real Estate Broker Sentenced to 10 Years in Prison in Mortgage Fraud Scam
FRESNO, CA—James Lee Lankford, 74, formerly a Modesto-based real estate broker, was sentenced today by Senior U.S. District Judge Anthony W. Ishii to 10 years in prison for orchestrating an 11-year mortgage fraud scam that looted elderly homeowners and lending institutions of close to $10 million dollars, United States Attorney Benjamin B. Wagner announced.
Lankford’s co-defendant, Jon Vance McDade, 49, formerly of Modesto, was sentenced to one year of home detention, to be followed by a five-year term of supervised release, in connection with the same mortgage fraud scam. (McDade and Lankford have married, and McDade is now known as Jon Vance Lankford.) The two were ordered to forfeit their interests in various properties and to pay $1,443,826 in restitution to the victims of the fraud scheme.
According to court documents, Lankford, who operated Century 21-Apollo Realty as a real estate agent and broker, fraudulently induced elderly property owners to sell their homes to him and to provide the financing for the purchase. In return, Lankford agreed to make interest-only payments and to pay the principal at a future date. Lankford fraudulently induced the elderly sellers into believing that their financing was secured by the property itself by filing deeds with the county recorder’s office. Unbeknownst to the elderly sellers, Lankford also obtained mortgages from lending institutions to finance the purchase of the same properties. In order to obtain the mortgages, Lankford would not inform the lending institutions that he had obtained seller-backed financing. Lankford and co-defendant McDade also made other material misrepresentations on the loan applications and, in some instances, submitted falsified documents regarding monthly income to ensure approval for the loans.
In many instances, Lankford then refinanced the properties with another lending institution after filing fraudulent deeds purportedly showing that the elderly property owners had been paid in full. After eliminating the seller’s lien on the property, Lankford would then obtain refinancing and draw out any equity that had accumulated in the property. Lankford, having refinanced the property and, in some instances, having obtained additional financing by reselling the property to co-defendant McDade, would then allow the property to go into foreclosure or would sell it as a short sale.
“James Lankford preyed on elderly homeowners in the course of his scheme,” U.S. Attorney Wagner said. “The sentence imposed in this case appropriately reflects the cruelty of Lankford’s conduct.”
“James Lee Lankford participated in a fraudulent scheme that preyed on elderly victims and the banking industry, causing millions of dollars in losses to those individuals and to Fannie Mae,” said Michael P. Stephens, Acting Inspector General for the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG). “We will continue to work with our law enforcement partners to dismantle such schemes and hold all involved accountable, just as Lankford was held accountable.”
“Lankford’s elaborate scheme was damaging not only to individual victims but also to lenders and the local economy,” said Special Agent in Charge Monica M Miller of the Sacramento Division of the FBI. “He used vulnerable, elderly citizens as mere pawns in his elaborate scheme, carelessly and irreparably damaging their financial well-beings while defrauding lenders to elevate his own lifestyle, lining his pockets with ill-gotten gains. This case exemplifies the importance of partnership among federal and local law enforcement agencies for successful investigation and pursuit of justice for victims of financial crime.”
This case was the product of an investigation by the FBI, the FHFA-OIG, and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorneys Christopher Baker and Michael Tierney prosecuted the case.
This case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Lankford’s co-defendant, Jon Vance McDade, 49, formerly of Modesto, was sentenced to one year of home detention, to be followed by a five-year term of supervised release, in connection with the same mortgage fraud scam. (McDade and Lankford have married, and McDade is now known as Jon Vance Lankford.) The two were ordered to forfeit their interests in various properties and to pay $1,443,826 in restitution to the victims of the fraud scheme.
According to court documents, Lankford, who operated Century 21-Apollo Realty as a real estate agent and broker, fraudulently induced elderly property owners to sell their homes to him and to provide the financing for the purchase. In return, Lankford agreed to make interest-only payments and to pay the principal at a future date. Lankford fraudulently induced the elderly sellers into believing that their financing was secured by the property itself by filing deeds with the county recorder’s office. Unbeknownst to the elderly sellers, Lankford also obtained mortgages from lending institutions to finance the purchase of the same properties. In order to obtain the mortgages, Lankford would not inform the lending institutions that he had obtained seller-backed financing. Lankford and co-defendant McDade also made other material misrepresentations on the loan applications and, in some instances, submitted falsified documents regarding monthly income to ensure approval for the loans.
In many instances, Lankford then refinanced the properties with another lending institution after filing fraudulent deeds purportedly showing that the elderly property owners had been paid in full. After eliminating the seller’s lien on the property, Lankford would then obtain refinancing and draw out any equity that had accumulated in the property. Lankford, having refinanced the property and, in some instances, having obtained additional financing by reselling the property to co-defendant McDade, would then allow the property to go into foreclosure or would sell it as a short sale.
“James Lankford preyed on elderly homeowners in the course of his scheme,” U.S. Attorney Wagner said. “The sentence imposed in this case appropriately reflects the cruelty of Lankford’s conduct.”
“James Lee Lankford participated in a fraudulent scheme that preyed on elderly victims and the banking industry, causing millions of dollars in losses to those individuals and to Fannie Mae,” said Michael P. Stephens, Acting Inspector General for the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG). “We will continue to work with our law enforcement partners to dismantle such schemes and hold all involved accountable, just as Lankford was held accountable.”
“Lankford’s elaborate scheme was damaging not only to individual victims but also to lenders and the local economy,” said Special Agent in Charge Monica M Miller of the Sacramento Division of the FBI. “He used vulnerable, elderly citizens as mere pawns in his elaborate scheme, carelessly and irreparably damaging their financial well-beings while defrauding lenders to elevate his own lifestyle, lining his pockets with ill-gotten gains. This case exemplifies the importance of partnership among federal and local law enforcement agencies for successful investigation and pursuit of justice for victims of financial crime.”
This case was the product of an investigation by the FBI, the FHFA-OIG, and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorneys Christopher Baker and Michael Tierney prosecuted the case.
This case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Friday, January 24, 2014
Rockville Man Sentenced in Mortgage Fraud Scheme
GREENBELT, MD—U.S. District Judge Peter J. Messitte sentenced Edgar Galdamez, age 37, of Rockville, Maryland, today to 18 months in prison, followed by three years of supervised release, for wire fraud in connection with a mortgage fraud scheme. Judge Messitte entered an order that Galdamez pay $515,000 in restitution and forfeiture, the amount of loss resulting from the scheme.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea, from at least September 2006 through May 2007, Galdamez and others contacted individuals who wished to purchase homes as investment properties. Galdamez and others prepared and submitted false loan applications in the buyers’ names to the lending institution to qualify these individuals for loans that they otherwise were unqualified to obtain. For instance, they typically inflated the buyer’s income and omitted liabilities. They also falsely stated that the purpose of the property was to be the borrowers’ primary residences in order to receive a lower interest rate. Galdamez knew that the property was intended to be used as an investment property. These residential mortgages were destined to fail because the borrowers did not have the income or assets to make the necessary mortgage payments. Galdamez and others profited from these fraudulent transactions by collecting origination fees, commissions, and brokers’ fees from each loan that closed.
As a result of the fraud scheme, the lender lost $515,000.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage‑Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Sujit Raman, who prosecuted the case.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea, from at least September 2006 through May 2007, Galdamez and others contacted individuals who wished to purchase homes as investment properties. Galdamez and others prepared and submitted false loan applications in the buyers’ names to the lending institution to qualify these individuals for loans that they otherwise were unqualified to obtain. For instance, they typically inflated the buyer’s income and omitted liabilities. They also falsely stated that the purpose of the property was to be the borrowers’ primary residences in order to receive a lower interest rate. Galdamez knew that the property was intended to be used as an investment property. These residential mortgages were destined to fail because the borrowers did not have the income or assets to make the necessary mortgage payments. Galdamez and others profited from these fraudulent transactions by collecting origination fees, commissions, and brokers’ fees from each loan that closed.
As a result of the fraud scheme, the lender lost $515,000.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage‑Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Sujit Raman, who prosecuted the case.
Thursday, January 23, 2014
Mortgage Broker Pleads Guilty to Conspiring to Commit Mortgage Fraud
TAMPA—Acting United States Attorney A. Lee Bentley, III announces that Michelle Carducci (37, Tampa) today pleaded guilty to conspiracy to commit wire fraud affecting a financial institution and making false statements to a federal agency. She faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to court documents, in 2001, Carducci moved from Ohio to Florida and, in 2002, became a Florida-licensed mortgage broker. Subsequently, she entered into a conspiracy with a Florida-licensed real estate agent and a primarily Pinellas County-based developer. The real estate agent was recruiting buyers to purchase houses that were being “flipped” by the developer through a series of companies. Buyers were falsely told that these deals would require no money from them. Instead, to hide the fact that the seller (the developer) was really providing closing funds (down payments) to otherwise unqualified buyers, Carducci, among other things, inflated the buyers’ assets on their loan-related documents.
Carducci’s role in the conspiracy is estimated to have caused losses between $400,000 and $1,000,000 for transactions that she handled in 2005 and 2006.
This case was investigated by Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.
According to court documents, in 2001, Carducci moved from Ohio to Florida and, in 2002, became a Florida-licensed mortgage broker. Subsequently, she entered into a conspiracy with a Florida-licensed real estate agent and a primarily Pinellas County-based developer. The real estate agent was recruiting buyers to purchase houses that were being “flipped” by the developer through a series of companies. Buyers were falsely told that these deals would require no money from them. Instead, to hide the fact that the seller (the developer) was really providing closing funds (down payments) to otherwise unqualified buyers, Carducci, among other things, inflated the buyers’ assets on their loan-related documents.
Carducci’s role in the conspiracy is estimated to have caused losses between $400,000 and $1,000,000 for transactions that she handled in 2005 and 2006.
This case was investigated by Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.
Monday, January 13, 2014
Seven Defendants Indicted in $49.6 Million Mortgage Fraud Scheme Involving North Carolina Property Development
Wifredo A. Ferrer, United States Attorney for the Southern District; Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Fred W. Gibson, Jr., Acting Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), announce the unsealing of a 15-count indictment charging seven defendants in a mortgage fraud scheme that resulted in the approval of approximately $49.6 million in fraudulent loans and millions in losses to the lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank. The properties referred to in the indictment consist of multiple vacant lots in a community development in North Carolina.
The indictment charges the following individuals as co-conspirators: Domenico “Dom” Rabuffo, 77, of Miami; Mae Rabuffo, 74, of Fort Lauderdale; Diane M. Hayduk, 64, of Miami; Raymond E. Olivier, 52, of Land O’ Lakes; Curtis Allen Davis, 51, of Tampa; Victor Miguel Vidal, 48, of Miami; and Lazaro Jesus Perez, 43, of Miami Lakes.
According to the indictment, the defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders from 2003 to 2008. Defendants Domenico Rabuffo and Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina. According to the indictment, Domenico Rabuffo, Mae Rabuffo, Diane M. Hayduk, Raymond E. Olivier, and Curtis Allen Davis recruited numerous straw buyers to purchase lots in the Hampton Springs development. The straw buyers financed the purchase of the building lots in Hampton Springs using mortgage loans and further obtained construction loans for the same properties. Defendants caused the straw buyers to submit false and fraudulent loan applications and related documents to the lenders to ensure that the straw buyers qualified for the loans. Defendant Victor Miguel Vidal served as a loan officer at SunTrust Mortgage, where he shepherded the fraudulent loan applications of the straw buyers through the approval process, including fraudulent applications for $33 million in construction loans. Defendant Lazaro Jesus Perez furnished fictitious and fraudulent accountant’s letters to Vidal in support of various fraudulent mortgage loan applications submitted to SunTrust Mortgage.
Ultimately, based on the indictment, the lenders were induced to advance approximately $49.6 million in loan proceeds in connection with this scheme. The proceeds of the defendants’ mortgage fraud scheme were funneled through shell-corporation accounts controlled by Domenico Rabuffo and Mae Rabuffo, and other accounts, for the use and benefit of the defendants and their co-conspirators and to further the defendants’ fraudulent scheme.
The indictment includes charges of conspiracy to commit bank fraud and wire fraud affecting a financial institution and substantive bank fraud offenses. The offenses charged in the indictment each carry a statutory maximum sentence of 30 years in prison, a $1 million fine, and mandatory restitution.
Mr. Ferrer commends the investigative efforts of the FBI and FDIC-OIG. The case is being prosecuted by Assistant U.S. Attorney Dwayne E. Williams.
An indictment is only an accusation, and the defendants are presumed innocent until proven guilty.
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 www.usdoj.gov/usao/fls.
The indictment charges the following individuals as co-conspirators: Domenico “Dom” Rabuffo, 77, of Miami; Mae Rabuffo, 74, of Fort Lauderdale; Diane M. Hayduk, 64, of Miami; Raymond E. Olivier, 52, of Land O’ Lakes; Curtis Allen Davis, 51, of Tampa; Victor Miguel Vidal, 48, of Miami; and Lazaro Jesus Perez, 43, of Miami Lakes.
According to the indictment, the defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders from 2003 to 2008. Defendants Domenico Rabuffo and Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina. According to the indictment, Domenico Rabuffo, Mae Rabuffo, Diane M. Hayduk, Raymond E. Olivier, and Curtis Allen Davis recruited numerous straw buyers to purchase lots in the Hampton Springs development. The straw buyers financed the purchase of the building lots in Hampton Springs using mortgage loans and further obtained construction loans for the same properties. Defendants caused the straw buyers to submit false and fraudulent loan applications and related documents to the lenders to ensure that the straw buyers qualified for the loans. Defendant Victor Miguel Vidal served as a loan officer at SunTrust Mortgage, where he shepherded the fraudulent loan applications of the straw buyers through the approval process, including fraudulent applications for $33 million in construction loans. Defendant Lazaro Jesus Perez furnished fictitious and fraudulent accountant’s letters to Vidal in support of various fraudulent mortgage loan applications submitted to SunTrust Mortgage.
Ultimately, based on the indictment, the lenders were induced to advance approximately $49.6 million in loan proceeds in connection with this scheme. The proceeds of the defendants’ mortgage fraud scheme were funneled through shell-corporation accounts controlled by Domenico Rabuffo and Mae Rabuffo, and other accounts, for the use and benefit of the defendants and their co-conspirators and to further the defendants’ fraudulent scheme.
The indictment includes charges of conspiracy to commit bank fraud and wire fraud affecting a financial institution and substantive bank fraud offenses. The offenses charged in the indictment each carry a statutory maximum sentence of 30 years in prison, a $1 million fine, and mandatory restitution.
Mr. Ferrer commends the investigative efforts of the FBI and FDIC-OIG. The case is being prosecuted by Assistant U.S. Attorney Dwayne E. Williams.
An indictment is only an accusation, and the defendants are presumed innocent until proven guilty.
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 www.usdoj.gov/usao/fls.
Former Sacramento-Area Loan Officer Pleads Guilty in Mortgage Fraud Scheme
SACRAMENTO, CA—Alexander A. Romaniolis, 48, of Irvine, pleaded guilty today to mortgage fraud, United States Attorney Benjamin B. Wagner announced. A federal grand jury returned the three-count indictment on March 21, 2013, charging Romaniolis with mail fraud.
According to court documents, Romaniolis recruited five straw buyers to purchase eight California residential properties in Rocklin, Roseville, and San Clemente. Romaniolis assisted the straw buyers in providing false information to lenders about their employment, income, assets, and intent to occupy properties as primary residences. In most cases, the straw buyers claimed to be executives of companies created and controlled by Romaniolis. He was responsible for the origination of more than $5 million in residential mortgage loans in the scheme. All of the properties were foreclosed on, resulting in a total loss of more than $2 million.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Attorney General’s Mortgage Fraud Task Force. The Huntington Beach Police Department assisted in the arrest. Assistant United States Attorney Jean M. Hobler is prosecuting the case.
Romaniolis is scheduled to be sentenced on March 27, 2014. He faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
According to court documents, Romaniolis recruited five straw buyers to purchase eight California residential properties in Rocklin, Roseville, and San Clemente. Romaniolis assisted the straw buyers in providing false information to lenders about their employment, income, assets, and intent to occupy properties as primary residences. In most cases, the straw buyers claimed to be executives of companies created and controlled by Romaniolis. He was responsible for the origination of more than $5 million in residential mortgage loans in the scheme. All of the properties were foreclosed on, resulting in a total loss of more than $2 million.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Attorney General’s Mortgage Fraud Task Force. The Huntington Beach Police Department assisted in the arrest. Assistant United States Attorney Jean M. Hobler is prosecuting the case.
Romaniolis is scheduled to be sentenced on March 27, 2014. He faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
New York City Man Pleads Guilty to His Role in Scheme Against Local Mortgage Company
ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Sean Ola-Ojo, 33, from Queens, New York, pleaded guilty to a felony charge for his role in a mortgage fraud scheme, before U.S. District Judge David H. Larimer. The defendant faces up to 41 months in prison when sentenced.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Ola-Ojo was indicted along with co-defendants Angelo Louissaint and Jennifer Johnson. The defendants organized a scheme to obtain large mortgage loans from Flaherty Funding. The defendants recruited straw buyers to purchase five properties in the New York City area at substantially inflated prices. These buyers did not qualify for the financing sought and had no intention of repaying the mortgages or of occupying the properties. To make the straw buyers appear wealthier than they actually were, the defendants submitted falsified income, asset, and down payment information to Flaherty Funding. Virtually every supporting document submitted by the defendants on behalf of the straw buyers was forged or altered, including the Form W-2s, earnings statements, bank account statements, and down payment checks. As a result of their scheme, Flaherty Funding approved approximately $1,700,000 in loans.
Charges are still pending against co-defendants Angelo Louissaint and Jennifer Johnson. The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
This plea is the culmination of efforts by the United States Postal Inspection Service, Boston Division, under the direction of Inspector in Charge Kevin Niland; the United States Postal Inspection Service, New York Division, under the direction of Inspector in Charge Ronald Verrochio; and the Federal Bureau of Investigation, under the direction of Brian P. Boetig, Special Agent in Charge.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Ola-Ojo was indicted along with co-defendants Angelo Louissaint and Jennifer Johnson. The defendants organized a scheme to obtain large mortgage loans from Flaherty Funding. The defendants recruited straw buyers to purchase five properties in the New York City area at substantially inflated prices. These buyers did not qualify for the financing sought and had no intention of repaying the mortgages or of occupying the properties. To make the straw buyers appear wealthier than they actually were, the defendants submitted falsified income, asset, and down payment information to Flaherty Funding. Virtually every supporting document submitted by the defendants on behalf of the straw buyers was forged or altered, including the Form W-2s, earnings statements, bank account statements, and down payment checks. As a result of their scheme, Flaherty Funding approved approximately $1,700,000 in loans.
Charges are still pending against co-defendants Angelo Louissaint and Jennifer Johnson. The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
This plea is the culmination of efforts by the United States Postal Inspection Service, Boston Division, under the direction of Inspector in Charge Kevin Niland; the United States Postal Inspection Service, New York Division, under the direction of Inspector in Charge Ronald Verrochio; and the Federal Bureau of Investigation, under the direction of Brian P. Boetig, Special Agent in Charge.
Monday, December 2, 2013
Nine Defendants, Including Title Company Owners and Lawyers, Indicted in Two Separate Mortgage Fraud Schemes
CHICAGO—A couple who owned a now-defunct suburban title company, a disbarred attorney, and an attorney are among nine defendants who have been indicted in two separate mortgage fraud cases, federal law enforcement officials announced today. Seven defendants were charged together in one case, and two in the second case, together alleging schemes to fraudulently obtain at least four residential mortgage loans totaling more than $1 million from lenders.
Both indictments allege that the mortgages were obtained to finance the purchase of properties on Chicago’s South Side, using fraudulent means such as straw purchasers, short sales, inflated prices, and unqualified buyers, while the defendants allegedly profited. As a result, the lenders incurred losses because the mortgages were not fully recovered through subsequent sale or foreclosure.
Seven defendants were charged in an indictment that was unsealed on Monday following the arrest of HARVEY WRIGHT, 46, of Chicago, a disbarred South Holland attorney; and PRECIOUS HOUSE, 47, of Chicago. Also indicted, but not arrested, were DAVID GUEL, 60, and his wife, MARY GLEASON, 48, both of Blue Island; MUNTAZER ALI SAIYED, also known as “Monty Saiyed,” 37, of Bartlett; SAGED ANSARI, 32, of Hanover Park; and AZEEM SYED, 30, of Bolingbrook. All seven were charged with two counts of wire fraud and House, Syed, Saiyed, and Ansari were also charged with one count each of identity theft. The indictment seeks forfeiture of more than $800,000.
Guel and Gleason owned and operated the former U.S. Worldwide Title Services LLC, a title company located in Downers Grove.
All seven defendants pleaded not guilty yesterday or Monday in U.S. District Court and were released on bond. A status hearing was scheduled for January 13.
According to the indictment, between September 2008 and March 2009, the defendants caused two fraudulent mortgage loans to be issued by lenders for properties at 4823 South Racine Avenue and 6738 South Marshfield Avenue. The alleged fraud involved false representations in documents, including real estate contracts, loan applications, title commitments, and HUD-1 settlement statements concerning sales prices, the true disbursement of the loan proceeds at closing, the buyer’s assets, employment, and income.
The defendants allegedly used straw buyers who had no intention of residing in the property and making mortgage payments, as well as stolen identities of individuals who did not know that their identities were being used to purchase property. Guel, Gleason, Wright, and House allegedly conducted “double closings” at Worldwide Title in which a single property was sold twice through a short sale of the property from an owner to a buyer, who only temporarily took ownership before immediately re-selling to a second buyer at an inflated sales price using a fraudulently obtained mortgage to finance the purchase.
House allegedly facilitated the double closings by recruiting individuals to pose as the first and second buyers and arranging for them to use stolen identities provided by Syed, Saiyed, and Ansari, in connection with the transactions, the indictment alleges.
Guel, Gleason, and Wright allegedly prepared fraudulent documents stating that the properties had been transferred into a trust approximately a year before the double closing to conceal from the lender that the property was being sold twice, including on the same day. These three defendants and House allegedly obtained loan proceeds for their own personal benefit.
This case is part of Operation Mad House, an undercover investigation designed to combat mortgage and real estate fraud in the Chicago area with a focus on professionals in the real estate industry. Since 2009, more than 50 defendants have been convicted, including title company operators, mortgage brokers, licensed appraisers, and attorneys.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Barry McLaughlin, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and James C. Lee, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
The government is being represented by Assistant U.S. Attorneys Sunil Harjani and Kathryn Malizia.
In an unrelated case, GEORGE KOUVELIS, 39, of Bloomingdale, who bought and sold residential properties, and KARIM DURE, 39, of Chicago, an Evanston attorney, were each charged with two counts of wire fraud in an indictment that was unsealed on November 14 after Kouvelis was arrested. Kouvelis and Dure, who was not arrested, both pleaded not guilty and were released on bond. Their next court date is January 6. The indictment seeks forfeiture of $521,250.
According to the indictment, between November 2008 and March 2009, Kouvelis and Dure caused a buyer to obtain two fraudulent mortgage loans to purchase Kouvelis’ properties at 5804 South Princeton Avenue and 5563 South Shields Avenue. The defendants allegedly made false representations in documents, including real estate contracts, loan applications, and HUD-1 settlement statements concerning inflated sales prices, money paid to the buyer for purchasing the properties, the buyer’s assets, liabilities, and source of down payment.
The indictment alleges that Kouvelis fraudulently obtained mortgage loan proceeds through false closing documents, which concealed that the buyer was being paid to purchase the properties; concealed that the funds being used for down payments were provided by another individual; inflated purchase prices; and concealed that the buyer was contributing little or no equity to the transactions. Dure allegedly represented the buyer knowing that the loans were being funded based on false information about the buyer’s qualifications, including a will submitted by the buyer and a letter that Dure submitted to the lender verifying that the buyer had received $200,000 from his grandfather’s estate.
Mr. Fardon announced the Kouvelis/Dure charges with Mr. McLaughlin, Mr. Holley, and Tony Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago. The government is being represented by Assistant U.S. Attorney Jason Yonan.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The identity theft count against defendants House, Syed, Saiyed, and Ansari carries a maximum of 15 years in prison and a $250,000 fine. If convicted, the court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Since 2008, several hundred defendants have been charged in federal court in Chicago and Rockford with engaging in various mortgage fraud schemes involving more than 1,000 properties and more than $300 million in potential losses, signifying the high priority that federal law enforcement officials give mortgage fraud in an effort to deter others from engaging in crimes relating to residential and commercial real estate.
Today’s announcement is part of efforts underway by the Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has facilitated increased investigation and prosecution of financial crimes; enhanced coordination and cooperation among federal, state, and local authorities; addressed discrimination in the lending and financial markets; and conducted outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Both indictments allege that the mortgages were obtained to finance the purchase of properties on Chicago’s South Side, using fraudulent means such as straw purchasers, short sales, inflated prices, and unqualified buyers, while the defendants allegedly profited. As a result, the lenders incurred losses because the mortgages were not fully recovered through subsequent sale or foreclosure.
Seven defendants were charged in an indictment that was unsealed on Monday following the arrest of HARVEY WRIGHT, 46, of Chicago, a disbarred South Holland attorney; and PRECIOUS HOUSE, 47, of Chicago. Also indicted, but not arrested, were DAVID GUEL, 60, and his wife, MARY GLEASON, 48, both of Blue Island; MUNTAZER ALI SAIYED, also known as “Monty Saiyed,” 37, of Bartlett; SAGED ANSARI, 32, of Hanover Park; and AZEEM SYED, 30, of Bolingbrook. All seven were charged with two counts of wire fraud and House, Syed, Saiyed, and Ansari were also charged with one count each of identity theft. The indictment seeks forfeiture of more than $800,000.
Guel and Gleason owned and operated the former U.S. Worldwide Title Services LLC, a title company located in Downers Grove.
All seven defendants pleaded not guilty yesterday or Monday in U.S. District Court and were released on bond. A status hearing was scheduled for January 13.
According to the indictment, between September 2008 and March 2009, the defendants caused two fraudulent mortgage loans to be issued by lenders for properties at 4823 South Racine Avenue and 6738 South Marshfield Avenue. The alleged fraud involved false representations in documents, including real estate contracts, loan applications, title commitments, and HUD-1 settlement statements concerning sales prices, the true disbursement of the loan proceeds at closing, the buyer’s assets, employment, and income.
The defendants allegedly used straw buyers who had no intention of residing in the property and making mortgage payments, as well as stolen identities of individuals who did not know that their identities were being used to purchase property. Guel, Gleason, Wright, and House allegedly conducted “double closings” at Worldwide Title in which a single property was sold twice through a short sale of the property from an owner to a buyer, who only temporarily took ownership before immediately re-selling to a second buyer at an inflated sales price using a fraudulently obtained mortgage to finance the purchase.
House allegedly facilitated the double closings by recruiting individuals to pose as the first and second buyers and arranging for them to use stolen identities provided by Syed, Saiyed, and Ansari, in connection with the transactions, the indictment alleges.
Guel, Gleason, and Wright allegedly prepared fraudulent documents stating that the properties had been transferred into a trust approximately a year before the double closing to conceal from the lender that the property was being sold twice, including on the same day. These three defendants and House allegedly obtained loan proceeds for their own personal benefit.
This case is part of Operation Mad House, an undercover investigation designed to combat mortgage and real estate fraud in the Chicago area with a focus on professionals in the real estate industry. Since 2009, more than 50 defendants have been convicted, including title company operators, mortgage brokers, licensed appraisers, and attorneys.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Barry McLaughlin, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and James C. Lee, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
The government is being represented by Assistant U.S. Attorneys Sunil Harjani and Kathryn Malizia.
In an unrelated case, GEORGE KOUVELIS, 39, of Bloomingdale, who bought and sold residential properties, and KARIM DURE, 39, of Chicago, an Evanston attorney, were each charged with two counts of wire fraud in an indictment that was unsealed on November 14 after Kouvelis was arrested. Kouvelis and Dure, who was not arrested, both pleaded not guilty and were released on bond. Their next court date is January 6. The indictment seeks forfeiture of $521,250.
According to the indictment, between November 2008 and March 2009, Kouvelis and Dure caused a buyer to obtain two fraudulent mortgage loans to purchase Kouvelis’ properties at 5804 South Princeton Avenue and 5563 South Shields Avenue. The defendants allegedly made false representations in documents, including real estate contracts, loan applications, and HUD-1 settlement statements concerning inflated sales prices, money paid to the buyer for purchasing the properties, the buyer’s assets, liabilities, and source of down payment.
The indictment alleges that Kouvelis fraudulently obtained mortgage loan proceeds through false closing documents, which concealed that the buyer was being paid to purchase the properties; concealed that the funds being used for down payments were provided by another individual; inflated purchase prices; and concealed that the buyer was contributing little or no equity to the transactions. Dure allegedly represented the buyer knowing that the loans were being funded based on false information about the buyer’s qualifications, including a will submitted by the buyer and a letter that Dure submitted to the lender verifying that the buyer had received $200,000 from his grandfather’s estate.
Mr. Fardon announced the Kouvelis/Dure charges with Mr. McLaughlin, Mr. Holley, and Tony Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago. The government is being represented by Assistant U.S. Attorney Jason Yonan.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The identity theft count against defendants House, Syed, Saiyed, and Ansari carries a maximum of 15 years in prison and a $250,000 fine. If convicted, the court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Since 2008, several hundred defendants have been charged in federal court in Chicago and Rockford with engaging in various mortgage fraud schemes involving more than 1,000 properties and more than $300 million in potential losses, signifying the high priority that federal law enforcement officials give mortgage fraud in an effort to deter others from engaging in crimes relating to residential and commercial real estate.
Today’s announcement is part of efforts underway by the Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has facilitated increased investigation and prosecution of financial crimes; enhanced coordination and cooperation among federal, state, and local authorities; addressed discrimination in the lending and financial markets; and conducted outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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