RaÃºl A. Morales-Guanill; Rafael Antonio Pina-Nieves, aka “Raphy Pina“; Orlando Javier Sierra-Mercado, aka “ChiquitÃn,” “Chiqui“; and Wilson Ãlvarez-Luna have been indicted on 19 counts of conspiracy to commit bank fraud, conspiracy and aiding and abetting to submit false statements to a financial institution, and money laundering.
According to the indictment, the defendants conspired and aided and abetted each other and others to submit false statements to a financial institution with the purpose of illegally obtaining money and funds in excess of $4 million from Doral Mortgage, a wholly owned subsidiary of Doral Bank of Puerto Rico. The defendants knowingly engaged and attempted to engage in monetary transactions affecting interstate or foreign commerce in criminally derived property greater than $10,000.
The indictment alleges that on December 2007, Morales-Guanill entered into a sales contract with Sierra-Mercado for the sale of residential property Harbour Lights Estates #7, Palmas del Mar, Humacao. Sierra-Mercado applied for a loan at Doral Mortgage and falsely represented his income, his marital status, the purpose of the purchase of the residential property, and his source of income. As part of his loan application, he also submitted a false investment account statement which belonged to RAP Development Inc., a corporation owned by Pina-Nieves.
It is also alleged that from on or about January 24 until January 30, 2008, Morales-Guanill activated numerous lines of credit, two commercial loans, and a cash advance at Western Bank, Banco Popular de Puerto Rico, Banco Santander de Puerto Rico, and Doral Bank totaling $1,403,400. He subsequently deposited the proceeds of these transactions in his personal Western Bank account. The next day, he purchased two Western Bank manager’s checks in the amounts of $1,300,000 and $50,000, both made payable to Pina-Nieves.
On January 28, 2008, Pina-Nieves issued a check from his business account, RAP Development Inc., for $200,000 made payable to Wilson Ãlvarez-Luna, who deposited the check in his d/b/a Nephesh Management Properties bank account. Ãlvarez-Luna purchased a Doral Bank manager’s check in the amount of $200,000 made payable to Doral Mortgage, which Sierra-Mercado used as part of his down payment for the purchase of the residential property in Palmas del Mar.
Subsequently, Pina-Nieves issued two more checks from his personal bank account and the RAP Development Inc. bank account, totaling $290,007.03, used to pay part of the purchase of the house for Sierra-Mercado.
After the sales transaction of the Harbour Lights Estates #7 was completed, Pina-Nieves received in excess of $1.3 million. The property is currently being foreclosed because Sierra-Mercado defaulted on his mortgage payments.
This case is being prosecuted by Assistant United States Attorney Dina Ãvila-JimÃ©nez.
If convicted, the defendants face a maximum term of 30 years’ imprisonment, with fines of up to $1,000,000, or both. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
United States Attorney Rosa Emilia RodrÃguez-VÃ©lez announced the indictment. FBI agents collaborated during the investigation. The investigation was led by the Internal Revenue Service (IRS).
“We are committed to ensuring the integrity of the banking system and to prosecuting those who undermine it for their personal gain,” stated Rosa Emilia RodrÃguez-VÃ©lez, U.S. Attorney for the District of Puerto Rico. “Mortgage fraud hurts homeowners, businesses, and the economy, and we will hold those who exploit our banking system accountable for their actions.”
“IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to unjustly enrich themselves by submitting false information to financial institutions,” stated Jose A. Gonzalez, IRS-CI Special Agent in Charge. “We will continue to work with our federal and local law enforcement partners to bring this investigation to a thorough and complete conclusion.”