Anthony E. Carollo, 31, Raytown, Missouri, and Rebecca Gelwix, 25, Des Moines, Iowa, each pleaded guilty to one count of conspiracy to commit bank fraud, money laundering and wire fraud. As previously reported by Mortgage Fraud Blog, the defendants are two of 10 indicted in June, 2009. In their pleas, Carollo and Gelwix admitted that beginning in 2006 they conspired with Eric M. Rabicoff and other defendants to defraud federally insured mortgage lenders.
The conspirators arranged for straw buyers to purchase homes that were for sale by owners. They obtained financing for the deals by submitting false loan applications to lenders. False information including employment history, income and rent history was submitted in order for the straw buyers to obtain loans they would not otherwise qualify to receive. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing.
Carollo, who was the manager of a small, family-owned business called Gourmet Grocers, was listed as the employer for all the straw buyers. He provided false verifications of employment that were sent to lenders claiming the straw buyers worked for Gourmet Grocers. He was paid from the proceeds of the loans for providing the false employment verifications.
Gelwix was one of the people recruited by defendant Anthony “Gabe” Painton, Jr., to act as a straw buyers.
The conspirators used the straw buyers’ names, Social Security numbers and dates of birth to complete loan applications. The conspirators provided false information on loan applications because none of the straw buyers would have qualified for loans otherwise. In this manner, the conspirators fraudulently obtained a total of more than $3 million in mortgage loans.
Carollo and Gelwix are set for sentencing Nov. 16, 2009. Each of them faces a maximum penalty of 30 years and a fine up to $1 million. Painton is set for sentencing Oct. 19, 2009.
Co-defendants awaiting trial include: Eric M. Rabicoff, Jason L. Rabicoff, Lucas R. Collier, Deborah Saulmon, Bora Ly, Kong Bun Ly, and Richard Ngek. In all cases, defendants are presumed innocent until and unless proven guilty. The indictments filed merely contain allegations of criminal conduct.
US Attorney Lanny Welch announced the guilty pleas and commended the Internal Revenue Service, Assistant U.S. Attorney Christine Kenney and Assistant U.S. Attorney Richard Hathaway for their work on the case.