Mario Alvarenga, Rajesh Maddiwar, and Amir Meiri were arrested for participating in a scheme wherein, through an organization that advertised help to those seeking loan modifications to avoid foreclosure, obtained millions of dollars by deceiving homeowners into selling their homes to a company associated with the defendants.
The defendants were presented in Manhattan federal court before U.S. Magistrate Judge Kevin Fox.
According to the allegations in the Complaint unsealed in Manhattan federal court:
Since at least 2013, the defendants have defrauded distressed homeowners throughout the Bronx, Brooklyn, and Queens. They falsely represented to homeowners—some of whom were elderly or in poor health—that they could assist them with a loan modification or similar relief from foreclosure that would allow the homeowners to save their homes. But rather than actually assisting these homeowners, the defendants deceived them into selling their homes to Launch Development LLC (“Launch Development”), a for-profit real estate company also affiliated with the defendants.
The defendants lured victims through the Homeowners Assistance Service of New York (“HASNY”), which purported to provide assistance to homeowners who were seeking to avoid foreclosure of their homes. As part of the scheme, Meiri directed employees of Launch Development, a company owned in part by Meiri, to solicit owners of distressed properties and invite them to meet with HASNY representatives so that they could learn more about avoiding foreclosure and saving their homes.
When a homeowner arrived at the HASNY office, he or she met with Alvarenga, who typically advised the homeowner that HASNY could assist him or her with a loan modification. In still other cases, Alvarenga advised the homeowner that a loan modification could not be completed, but that the homeowner could engage in a type of short sale in which the homeowner would sell the property to a third party, Launch Development, and then within approximately 90 days arrange for a relative of the homeowner to repurchase the property from Launch Development. Alvarenga typically explained that the homeowner could remain in his or her home throughout the entire process. Alvarenga then typically scheduled a closing at which the homeowner would meet with Maddiwar, who was described as the homeowner’s attorney for the transaction.
At the closing, a homeowner who had been led to believe that he or she was about to receive a loan modification or transfer his or her property to a trusted relative was encouraged to sign documents presented by Maddiwar, which in some cases were blank. Unbeknownst to the homeowners, by signing the documents, they were selling to Launch Development the homes they had hoped to save. Homeowners often were then forced to vacate their homes soon thereafter.
The defendants are each charged with one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the Federal Bureau of Investigation (“FBI”), Christy Romero, and Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) announced the charges.
Mr. Bharara praised the outstanding work of the FBI, SIGTARP, and the New York State Department of Financial Services for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorney Jaimie L. Nawaday is in charge of the case.
Manhattan U.S. Attorney Preet Bharara said: “In what is alleged to be a brazen fraud, these defendants manipulated and took advantage of vulnerable people, and in some cases even tricked individuals into losing their homes. I would like to thank our partners—the FBI, SIGTARP, and DFS—for their ongoing assistance on this case.”
FBI Assistant Director Diego Rodriguez said: “The defendants took advantage of distressed home owners, mostly the poor and elderly, promising relief. In reality it was nothing more than a callous scheme that took advantage of the most desperate of victims. And in many cases, the owners were evicted from their homes after being tricked into selling their property to the defendants arrested today.”
Special Inspector General for SIGTARP said: “The three individuals taken into custody today stand charged with preying on struggling homeowners simply looking for a way to keep their homes from falling into foreclosure. These individuals are alleged to have dangled false promises of guaranteed mortgage modifications as a veil for secretly swindling homeowners out of their homes and forcing homeowners to vacate their properties. SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud related to the exploitation of TARP’s housing programs and bring perpetrators to justice. SIGTARP commends U.S. Attorney Bharara, Superintendent Lawsky, and the FBI for their shared commitment to safeguarding taxpayers from TARP-related crime.”