Richard Lisnek, 56, a licensed mortgage broker and president of K&L Real Estate, Inc., and American Eagle Mortgage, Inc., and his wife, Judy Kien, 50, an attorney and president of D&J Properties II, Inc., both of Buffalo Grove and who had offices in Arlington Heights, together with 13 other individuals and two other businesses, were charged with various counts of mail fraud and wire fraud in a 22-count indictment that was returned June 23, 2009, by a federal grand jury. Other defendants include another mortgage broker, three real estate appraisers, a title company and one of its vice presidents. The additional defendants listed in the indictment include:
Alfredo Hilado, 50, Bloomington, Illinois – straw buyer recruiter;
Mark Vargo, 53, Elmhurst, Illinois – straw buyer recruiter;
James Heiland, 63, Barrington Hills, Illinois – appraiser;
Brandon Bradford, 37, Chicago, Illinois – appraiser;
Vlad Ostromogilsky, 38, Glenview, Illinois – appraiser;
Alex Bulmash, 32, Lincolnwood, Illinois – broker;
Michael Bulmash, 29, Norridge, Illinois – processor;
Allen Bulmash, 29, Chicago, Illinois – processor;
Anthony Navickas, 28, Chicago, Illinois – processor;
Lynn Liskiewicz, 48, Chicago, Illinois, title company vice president;
Joanne Ruiz, 47, Elmhurst, Illinois – buyer;
Kenneth Turner, 32, Woodridge, Illinois – buyer; and
Antoinette Laws, 47, Chicago, Illinois – buyer.
In one of the most comprehensive mortgage fraud schemes ever charged in Chicago, the Lisneks, acting through two real estate investment companies they controlled, allegedly directed a scheme in which 15 individual defendants and four businesses purchased distressed properties, including from the U.S. Department of Housing and Urban Development, and then resold them for fraudulently inflated prices approximately two to three times the purchase price. Between 2002 and 2007, the defendants allegedly fraudulently obtained mortgage loans in excess of $10 million on approximately 70 residential properties throughout Chicago, including many on the city’s south side in and around the Englewood neighborhood. As part of the alleged scheme certain defendants paid other defendants to make homes “camera ready,” by making them appear as though they had been rehabilitated.
Lisnek and Kien allegedly provided funds to buyers, which they falsely represented to lenders were the buyer’s own funds for down payments. Various other defendants allegedly made false representations concerning the buyer’s employment, financial condition, contribution towards the purchase price and intention to occupy the home, and the sales price, condition and value of the property. After fraudulently obtaining the loans, the victim lenders incurred losses totaling approximately $5.8 million because they were unpaid, causing the residences to be foreclosed upon and resold for amounts less than the outstanding mortgage loan balance. The indictment seeks forfeiture of the alleged loss amount.
According to the indictment, Lisnek solicited individuals with good credit to buy distressed properties from K&L Real Estate and D&J Properties by promising that they would not have to invest any of their own money and promising to repair the property and make the mortgage payments until the home was restored or provide funds to rehabilitate the property and assist in obtaining tenants under HUD’s Section 8 subsidized housing program.
Lisnek recruited Hilado and Vargo to recruit other buyers, knowing the transactions would be financed by making false statement to mortgage lenders. Lisnek paid Vargo and others to make the distressed properties appear what Lisnek called “camera ready” or “picture ready” by making cosmetic repairs to front and rear exteriors so the homes would look fully restored or better than their actual condition.
Three licensed real estate appraisers, Heiland, Bradford and Ostromogilsky allegedly prepared inflated appraisals, falsely representing that those properties were fully rehabilitated, knowing that they would be used to support fraudulent loan applications.
Lisnek and licensed mortgage broker Bulmash, president of Investment Group, Inc., which operated as Investment Mortgage Group (IMG) in Lincolnwood and Skokie, Illinois, allegedly caused employees of IMG including Bulmash‘s brothers, Michael and Allen Bulmash as well as Navickas to prepare and submit false loan applications and supporting documents, such as verifications of deposit and rent and property leases, on behalf of buyers of distressed properties from K&L and D&J.
Liskiewicz, a vice president and regional manager of LaSalle Title Company, located at 100 North LaSalle St., Chicago, allegedly caused LaSalle Title to close sales by K&L, D&J and Lisnek by creating false closing documents concealing that the down payments represented as the buyer’s funds were actually provided by the sellers, that the purchase price was inflated, and that lenders were being deceived into financing all or a greater portion of the sale than portrayed for buyers with little or no equity in the property being purchased. The fraudulent closings included Kien signing settlement statements, known as HUD-1s, on behalf of sellers falsely representing the source of the buyer’s funds.
Hilado, Vargo, and additional defendants Ruiz, Turner and Laws purchased property from K&L and D&J knowing that they and others signed false loan applications to fraudulently obtain mortgages.
The indictment seeks forfeiture of $5.8 million from the defendants. All defendants will be ordered to appear for arraignment in U.S. District Court.
The Government is being represented by Assistant U.S. Attorneys Brian Netols and Steven Block.