Karl Oreste, 56, Miramar, Florida, Marie Lucie Tondreau, a/k/a Lucie Tondreau, 54, North Miami, Florida, Okechukwu Josiah Odunna, a/k/a O.J. Odunna, 49, Lauderdale Lakes, Florida, and Kelly Augustin, 57, North Miami, have been charged for their roles in an alleged scheme whereby they recruited and paid people to pose as borrowers to purchase properties.
The defendants are charged with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and six counts of wire fraud, in violation of Title 18, United States Code, Section 1343.
According to the allegations in the indictment, between December 2005 and May 2008, Oreste, president of KMC Mortgage Corporation of Florida, a mortgage lending business in North Miami Beach, identified residential properties in South Florida that were for sale. Oreste and Tondreau hosted several radio show programs in the South Florida area in which they advertised the services offered by KMC Mortgage. Oreste and Tondreau recruited and paid some of the listeners who responded to those advertisements, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.
Thereafter, the indictment alleges that Oreste and Odunna, and other co-conspirators prepared or caused to be prepared loan applications on behalf of straw borrowers. Odunna was an attorney previously licensed to practice law in Florida, and president of O.J. Odunna, P.A. and Direct Title and Escrow Services. These loan applications included false information relating to employment, wages, assets and intent to make the property being purchased a primary residence. The loan applications and documents were submitted by co-conspirators to various mortgage lenders throughout the United States. Once the loan applications were approved, the lenders wired loan funds to O.J. Odunna, P.A., Direct Title or other title companies for closing.
The indictment alleges that in some instances Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-1 Settlement Statement Forms, which grossly inflated the true purchase price of the properties. HUD-1 Settlement Statements also falsely and fraudulently represented to the mortgage lenders that the straw borrowers had met their down payment and cash to close obligations, when, in fact, the straw borrowers had never made any such payments.
At closing, a portion of loan proceeds were disbursed to Oreste through his corporation, JR Investment and Mortgage Corporation, or other bank accounts controlled by him. In some instances, a portion of the loan proceeds was diverted to O.J. Odunna, P.A. or Direct Title accounts. Oreste disbursed some of the proceeds he received to pay recruiters – such as Tondreau and Augustin – and straw borrowers. Oreste also transferred a substantial portion of the funds to bank accounts of LTO Investment Corporation, a corporation controlled by Tondreau. Tondreau used funds deposited in LTO Investment Corporation’s bank accounts to make payments on the falsely and fraudulently obtained mortgages in order to maintain the loans, and to conceal and further the fraud. She also used a portion of the funds deposited into LTO Investment Corporation’s bank accounts for her own personal use and benefit.
The indictment alleges that over the course of the conspiracy, the defendants fraudulently obtained loans on approximately 20 properties, for which the lenders have suffered losses in the amount of approximately $8,000,000.00. If convicted, each defendant faces a maximum term of 30 years in prison.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew J. Breakspear, Commissioner, Florida Office of Financial Regulation, announce the charges.
Mr. Ferrer commended the investigative efforts of the FBI and Florida’s Office of Financial Regulation. The case is being prosecuted by Assistance U.S. Attorney Lois Foster-Steers.