Restaurant Owner Sentenced For Role in Submitting Fraudulent Loan Applications

Stephanie Abbott —  August 29, 2024 — Leave a comment

Omar Hernandez-Lopez, 39, Springfield, Illinois as sentenced today to 18 months’ imprisonment for concealment of a felony in connection with wire fraud and false statements on loan applications.

At Hernandez-Lopez’s sentencing hearing, Senior U.S. District Judge Sue E. Myerscough, found that starting around June 2018 and continuing until at least June 2019, Hernandez-Lopez was aware of and acted to conceal the fraudulent nature of several falsified documents that were submitted to loan providers. Two fraudulent loan packages were submitted in an unsuccessful attempt to obtain a business loan for Hernandez-Lopez’s Springfield restaurant, La Fiesta Grande. The other two fraudulent loan packages were submitted in a successful attempt to obtain a home mortgage loan. Hernandez-Lopez was aware of the submission of fraudulent documents and took steps to conceal their fraudulent nature from the loan companies and law enforcement.

At the sentencing hearing, the government presented evidence showing that Hernandez-Lopez’s name is on the deed of the house for the fraudulently obtained mortgage and he operated the restaurant.

The sentencing follows Hernandez-Lopez’s guilty plea in April 2024. The statutory penalties for misprision of a felony are up to three years’ imprisonment, one year of supervised release, and a fine of up to $250,000.

Following his prison sentence, he will serve a 12-month term of supervised release.

The charges were investigated by the Federal Deposit Insurance Corporation Office of Inspector General, Chicago Region. Assistant U.S. Attorneys Sierra Senor-Moore and Tanner Jacobs represented the government in the prosecution.

 

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Man Arrested For Defrauding Federal Criminal Forfeiture

Stephanie Abbott —  August 21, 2024 — Leave a comment

Levelle Joseph Harris, 38, Kissimmee, Florida, was arrested on an indictment charging him with four counts of wire fraud.

According to court documents, between February 7, 2022, and January 31, 2023, Harris devised a scheme to defraud by obtaining a mortgage through false representations. Harris then used the proceeds from the fraudulently obtained mortgage to purchase a residence that was subject to federal criminal forfeiture. Harris fraudulently obtained more than $650,000 as part of the scheme.

If convicted, Harris faces up to 20 years in federal prison on each count. Harris is also facing a forfeiture order of $651,432, a sum which represents the total amount of proceeds obtained by Harris from the wire fraud scheme. A federal grand jury had indicted Harris on August 6, 2024.

United States Attorney Roger B. Handberg made the announcement.

An indictment is merely an allegation that a defendant has committed a federal criminal offense. Every defendant is presumed innocent unless, and until, proven guilty.

This case is being investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Hannah Nowalk. Assistant United States Attorney Jennifer Harrington is handling the forfeiture.

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Man Sentenced to Prison for FHA Fraud Scheme

Stephanie Abbott —  July 29, 2024 — Leave a comment

Jason Trador, 46, Scott Depot, West Virginia was sentenced today for fraudulently obtaining a $223,870 FHA-Insured Home Mortgage by making a false statement to federal agents, willfully overvaluing property on a loan application, and making a false statement to the United States Department of Housing and Urban Development (HUD).

A federal jury convicted Trador of the five felony offenses on April 10, 2024, after a two-day trial. Evidence at trial proved that Trador fraudulently obtained a $223,870 home mortgage insured by the Federal Housing Administration (FHA) from his then-employer, Victorian Finance LLC, a mortgage lending business. At the time he applied for the FHA loan in August 2018, Trador was delinquent on paying his federal taxes for a prior tax year. Because of the tax debt, Trador was not eligible for an FHA loan under existing FHA program rules. Trador deceived Victorian Finance into approving the application and the FHA into insuring the mortgage by providing a series of falsified documents including a falsified Internal Revenue Service (IRS) tax transcript purporting to show a payoff of the delinquent $8,151 tax debt.

Trador also submitted three heavily edited bank statements to Victorian Finance. Each falsified bank statement substantially inflated the balances in Trador’s bank accounts. Two of the falsified statements reported balances of approximately $27,000 and $15,000 for Trador’s personal bank account when in fact the account had negative balances. Line items, such as for insufficient funds fees, were removed from the falsified bank statements and a line item was added to deceive Victorian Finance into believing that he had paid off the delinquent $8,151 tax debt. Evidence at trial proved the purported payoff never occurred and that Trador was still delinquent on the federal tax debt as of March 2024.

On September 4, 2018, Trador willfully overvalued his assets on a loan application when he signed a Uniform Residential Loan Application that included the false balances from the falsified bank statements.

On May 6, 2022, Trador lied to investigators with HUD’s Office of Inspector General (OIG) and the Federal Bureau of Investigation (FBI) when they interviewed Trador at his Scott Depot residence about his application for the FHA-insured mortgage. Trador denied submitting false bank statements with his loan application, and blamed his fellow employees of the mortgage lending business for the inclusion of the false bank statements in the FHA loan file.

Trador was sentenced to one year and six months in prison, to be followed by three years of supervised release, and ordered to pay $65,302.16 in restitution

“Jason Trador was a loan officer with a duty to keep fraud out of the mortgage lending industry when he betrayed that position of trust and tricked his then-employer with his sophisticated criminal scheme,” said United States Attorney Will Thompson. “Since the fraud was discovered, Mr. Trador has chosen to attempt to deceive rather than own his mistakes. He lied to federal investigators. He took the stand and made over 30 false statements during his trial. He has shown no acceptance of responsibility or remorse for any of his crimes.”

Thompson made the announcement and commended the investigative work of the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG) and the Federal Bureau of Investigation (FBI).

“Jason Trador took advantage of his knowledge of the mortgage industry to circumvent the rules and abused the position of trust he held as a loan officer and gatekeeper of FHA-insured loans.  He created and passed false documents allowing him to qualify for a loan he knew he would not otherwise qualify for,” said Special Agent-in-Charge Shawn Rice with the U.S. Department of Housing and Urban Development, Office of Inspector General.  “The sentence handed down today serves as a warning that significant penalties await those willing to commit fraud involving HUD-funded programs. HUD OIG remains committed to working with our prosecutorial and law enforcement partners to aggressively pursue those who engage in activities that threaten the integrity of HUD programs.”

“Fraud activity of any kind has far-reaching consequences, and showing no remorse underscores the seriousness of this crime. The FBI will not stand for individuals who abuse their position for personal gain at the expense of others,” said FBI Pittsburgh Special Agent in Charge Kevin Rojek. “The FBI remains resolute in safeguarding our financial landscape, providing a level playing field for honest consumers, and ensuring the public maintains trust in the integrity of our institutions.”

United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorneys Andrew J. Tessman, Jonathan T. Storage and Erik S. Goes prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:23-cr-117.

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Woman Charged With Conspiracy To Commit Mortgage Fraud

Stephanie Abbott —  July 10, 2024 — Leave a comment

Angel Jackson, 44, Astatul, Florida, has been charged with one count of conspiracy to commit bank fraud.

According to the indictment, Jackson and others conspired to create and execute a mortgage fraud scheme targeting financial institutions. To ensure that otherwise unqualified borrowers obtained mortgage loans from financial institutions, Jackson created fictitious and fraudulent paystubs that falsely indicated that the borrowers worked at particular companies for certain periods of time and earned income that they did not. Further, Jackson altered legitimate Social Security benefit letters to reflect exaggerated monthly disability income, and she altered bank statements to show falsely inflated account balances. Based on Jackson’s and her co-conspirators’ misrepresentations, the financial institutions approved and funded the mortgage loans.

If convicted, Jackson faces a maximum penalty of 30 years in federal prison.

United States Attorney Roger B. Handberg announced the return of an indictment charging Jackson.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the U.S. Department of Housing and Urban Development – Office of Inspector General. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

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Real Estate Investor Pleads Guilty to $54.7M Mortgage Fraud Conspiracy

Stephanie Abbott —  June 17, 2024 — Leave a comment

Aron Puretz, 53, New Jersey, pleaded guilty today to engaging in an extensive, multi-year conspiracy to fraudulently obtain over $54.7 million in loans and to fraudulently acquire multifamily and commercial properties.

According to court documents, between 2016 and 2022, Puretz conspired with others to deceive lenders into issuing multifamily and commercial mortgage loans. Puretz and his conspirators provided the lenders with fictitious documents, including purchase contracts with inflated purchase prices, fake financial statements, and other fraudulent documents. Puretz was an employee of Apex Equity Group, a real estate investment and advisory firm, and one of the owners of Maple Lawn in Eureka, Illinois, and Big Country Chateau in Little Rock, Arkansas, both multifamily properties, and Troy Technology Park in Troy, Michigan, a commercial property.

In February 2017, Maple Lawn was acquired for $4.1 million. However, Puretz and his conspirators from Apex Equity Group utilized the identity of a conspirator to present a lender and Freddie Mac with a purchase and sale contract for $5.8 million and other fraudulent documents. On Feb. 17, 2017, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $4.1 million sales price and another for the fraudulent $5.8 million sales price presented to the lender. Part of the conspiracy was to create a nonprofit entity, JPC Charities, for the purpose of receiving tax-exempt status for the properties owned by Puretz and co-conspirators. Puretz and his conspirators provided false statements to the city of Eureka, Illinois, to receive a property tax exception.

In July 2019, Puretz and his conspirators acquired Big Country Chateau. However, Puretz knew the lender and Freddie Mac would not approve him as an owner, and used the identity of an associate instead of his own. Puretz hid his ownership and involvement with the property management company from the Department of Housing and Urban Development and other federal and state agencies.

In September 2020, Troy Technology Park was acquired for $42.7 million. However, Puretz and his co-conspirators presented the lender with a fraudulent purchase and sale contract for $70 million. To support the inflated purchase price, Puretz and his conspirators submitted to the lender and appraiser a fraudulent letter of intent to purchase the property from another party for $68 million and other fraudulent documents. To conceal the fraudulent nature of the transaction, Puretz and his conspirators arranged for a short-term $30 million loan, which was used to make it appear that they had the funds needed to close on the loan. On Sept. 25, 2020, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $42.7 million sales price and another for the fraudulent $70 million sales price presented to the lender.

Puretz pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution. He is scheduled to be sentenced on Oct. 30, 2024, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Philip R. Sellinger for the District of New Jersey; Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Inspector General Brian M. Tomney of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); and Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.

FHFA-OIG and USPIS are investigating the case.

Assistant U.S. Attorney Martha Nye for the District of New Jersey and Trial Attorney Siji Moore of the Criminal Division’s Fraud Section are prosecuting the case.

 

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Former Baltimore City State’s Attorney Marilyn J. Mosby Convicted

Stephanie Abbott —  May 23, 2024 — Leave a comment

Marilyn J. Mosby, 44, Baltimore, Maryland was sentenced today to twelve months of home confinement as part of thirty-six months of supervised release, for making a false mortgage application and two counts of perjury.

During the first twelve months of her supervised release Mosby was ordered to remain on home confinement, with electronic monitoring and forfeiture of 90% of the property purchased with the fraudulently obtained mortgage, including any appreciation.

On February 6, 2024, Mosby was convicted on the federal charge of making a false mortgage application when she was Baltimore City State’s Attorney, relating to the purchase of a condominium in Long Boat Key, Florida. Previously, on November 9, 2023, Mosby was convicted on two counts of perjury, relating to the withdrawal of funds from the City of Baltimore’s Deferred Compensation Plan claiming that she suffered adverse financial consequences during the COVID-19 pandemic while she was the Baltimore City State’s Attorney. 

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge William J. DelBagno of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.

U.S. Attorney Erek L. Barron commended the FBI and IRS-CI agents for their work in the investigation and thanked the Baltimore City Office of the Inspector General for its assistance and invaluable public service. Mr. Barron thanked Assistant U.S. Attorneys Sean R. Delaney and Aaron S.J. Zelinsky, who prosecuted the federal cases.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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Third Mortgage Professional Pleads Guilty to Mortgage Fraud Scheme

Stephanie Abbott —  May 20, 2024 — Leave a comment

German Antonio Lopez-Velasquez, 55, Modesto, California, pleaded guilty today to conspiring to commit bank fraud.

According to court documents, German Antonio Lopez-Velasquez, a real estate agent, worked with Lisa Santos, 48, Long Beach, California, a mortgage loan officer, and Marko Antonio Lopez, 27, Modesto, California, a real estate agent and notary public, to obtain fraudulent mortgage loans for properties based in Stanislaus, San Joaquin, and Santa Clara Counties in California, and elsewhere. The three defendants used false documents, fictional companies, and fictional individuals to obtain mortgage loans for borrowers who were not qualified to receive loans.

Santos pleaded guilty on May 13, 2024, to conspiring to commit bank fraud, and is scheduled to be sentenced on Sept. 30, 2024. Marko Antonio Lopez previously pleaded guilty and was sentenced on April 1, 2024.

Lopez-Velasquez is scheduled to be sentenced on Sept. 9, 2024, by U.S. District Judge Jennifer L. Thurston. Lopez-Velasquez 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.

U.S. Attorney Phillip A. Talbert made the announcement.

“The integrity of the FHA loan program is essential to helping hard working citizens realize the American dream of homeownership,” said Special Agent-in-Charge Mark Kaminsky with the U.S. Department of Housing and Urban Development, Office of Inspector General. “HUD OIG will continue to work with its prosecutorial and law enforcement partners to vigorously pursue those who seek to jeopardize this program and the health and stability of our nation’s housing market.”

This case is the product of an investigation by the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), the U.S. Department of Housing and Urban Development – Office of Inspector General (HUD-OIG) and the U.S. Postal Inspection Service (USPIS). Assistant U.S. Attorney Jeffrey A. Spivak is prosecuting the case.

 

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Businessman Pleads Guilty in Reverse Mortgage Scheme Targeting Elderly Homeowners

Stephanie Abbott —  May 7, 2024 — Leave a comment

Mark Steven Diamond, 67, Chicago, Illinois, pleaded guilty today to a federal fraud charge for bilking elderly homeowners in a home repair and reverse mortgage scheme.

Diamond schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform.  Diamond and the co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication.  In some instances, Diamond concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work, when, in fact, the documents that Diamond caused them to sign were related to applying for the loan.  After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs.

Diamond pleaded guilty to a federal charge of wire fraud affecting a financial institution, which is punishable by up to 30 years in federal prison.  Diamond acknowledged in a plea agreement that he victimized at least 18 Chicago-area homeowners by fraudulently obtaining approximately $929,000 from financial institutions in the form of reverse mortgage loan proceeds.  It will be the government’s position at sentencing that there were at least 80 victims and that Diamond’s actions caused at least approximately $6 million in losses.  U.S. District Judge Franklin U. Valderrama set Diamond’s sentencing for Sept. 4, 2024.

The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Substantial Assistance was provided by the Illinois Attorney General’s Office.  The government is represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.

All four co-schemers charged in the investigation – loan originators Gary Bohn, Hoffman Estates, Illinois., and Matthew Fefferman, Munster, Indiana., Diamond’s employee Cynthia Wallace, Sauk Village, Illinois., and title agency owner Forrest C. Fawcett, Fort Lauderdale, Florida. – previously pleaded guilty and admitted their roles in the fraud.  They are awaiting sentencing.

Diamond plea agreement

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Two Former Employees of Mortgage Lending Business Charged for Roles in Mortgage Fraud Scheme

Stephanie Abbott —  April 24, 2024 — Leave a comment

Christopher J. Gallo, 44, Old Tappan, New Jersey, and Mehmet A. Elmas, 32, a U.S. citizen who resides in Turkey, are charged by complaint with one count of conspiracy to commit bank fraud, in connection with their roles in a large-scale mortgage fraud scheme.

According to documents filed in this case and statements made in court:

Gallo and Elmas were previously employed by a New Jersey-based, privately owned licensed residential mortgage lending business. Gallo was employed as a senior loan officer and Elmas was a mortgage loan officer and Gallo’s assistant. From 2018 through October 2023, Gallo and Elmas used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans. Gallo and Elmas routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates. Gallo and Elmas often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties.

By fraudulently misleading lenders about the true intended use of the properties, Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates.  The conspiracy also included falsifying property records, including building safety and financial information of prospective borrowers to facilitate mortgage loan approval. Between 2018 through October 2023, Gallo originated more than $1.4 billion in loans.

They appeared today before U.S. Magistrate Judge André M. Espinosa in Newark federal court and were each released $200,000 unsecured bond.

U.S. Attorney Philip R. Sellinger made the announcement.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s arrests.

The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic Crimes Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

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Man Convicted for FHA Fraud Scheme

Stephanie Abbott —  April 11, 2024 — Leave a comment

Jason Trador, 46, Scott Depot, West Virginia, was convicted on April 10, 2024, of making a false statement to federal agents, willfully overvaluing property on a loan application, and three counts of making a false statement to the United States Department of Housing and Urban Development (HUD).

Evidence at trial proved that Trador fraudulently obtained a $223,870 home mortgage insured by the Federal Housing Administration (FHA) from his then-employer, Victorian Finance LLC, a mortgage lending business. At the time he applied for the FHA loan in August 2018, Trador was delinquent on paying his federal taxes for a prior tax year. Because of the tax debt, Trador was not eligible for an FHA loan under existing FHA program rules. Trador deceived Victorian Finance into approving the application and the FHA into insuring the mortgage by providing a series of falsified documents including a falsified Internal Revenue Service (IRS) tax transcript purporting to show a payoff of the delinquent $8,151 tax debt.

Trador also submitted three heavily edited bank statements to Victorian Finance. Each falsified bank statement substantially inflated the balances in Trador’s bank accounts. Two of the falsified statements reported balances of approximately $27,000 and $15,000 for Trador’s personal bank account when in fact the account had negative balances. Line items, such as for insufficient funds fees, were removed from the falsified bank statements and a line item was added to deceive Victorian Finance into believing that he had paid off the delinquent $8,151 tax debt. Evidence at trial proved the purported payoff never occurred and that Trador was still delinquent on the federal tax debt as of March 2024.

On September 4, 2018, Trador willfully overvalued his assets on a loan application when he signed a Uniform Residential Loan Application that included the false balances from the falsified bank statements.

On May 6, 2022, Trador lied to investigators with HUD’s Office of Inspector General (OIG) and the Federal Bureau of Investigation (FBI) when they interviewed Trador at his Scott Depot residence about his application for the FHA-insured mortgage. Trador denied submitting false bank statements with his loan application, and blamed his fellow employees of the mortgage lending business for the inclusion of the false bank statements in the FHA loan file.

Trador is scheduled to be sentenced on July 29, 2024, and faces a maximum penalty of 41 years in prison.

“Loan officers are supposed to be gatekeepers who protect the integrity of the FHA program. Mr. Trador abused his position of trust as a loan officer and used his knowledge of FHA requirements to obtain a mortgage he knew he did not qualify for, and then lied in an attempt to conceal his scheme,” said United States Attorney Will Thompson. “I commend HUD OIG and the FBI for their investigative work in this case, and Assistant United States Attorneys Andrew J. Tessman, Jonathan T. Storage and Erik S. Goes and our trial team for prosecuting the case and securing guilty verdicts on all five counts.”

“The integrity of the FHA loan program is essential to helping hard working citizens realize the American dream of homeownership,” said Special Agent-in-Charge Shawn Rice with the U.S. Department of Housing and Urban Development Office of Inspector General.  “This case demonstrates HUD OIG’s enduring commitment to working with U.S. Attorney’s Office for the Southern District of West Virginia and the FBI to investigate and hold accountable those who seek to jeopardize this program and the health and stability of the nation’s housing market.  I’d like to sincerely thank the U.S. Attorney’s Office and the entire investigative team, led by U.S. Attorney Thompson, for its tireless efforts to bring this matter to a just conclusion.”

United States District Judge Robert C. Chambers presided over the jury trial.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:23-cr-117.

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