Eduardo Hernandez, Jr., 32, Miami, Florida, Alexander Orriols, 43, Miami Beach, Florida, Jose Arias, 50, Miami, and Milena Hernandez, 30, Miami, have been charged with various counts of bank fraud, money laundering, and wire fraud.
The indictment also seeks the forfeiture of criminal proceeds derived from the fraud, including real property and $1,585,657.10. All four defendants were arrested and made their initial appearances in front of Magistrate Judge Edwin G. Torres.
The defendants have been charged with one count of conspiracy to commit bank fraud (Count 1), and one count of conspiracy to commit money laundering (Count 21). Additionally, the indictment charges various individual defendants with 19 counts of substantive bank fraud (Counts 2-20), 18 counts of money laundering (Counts 22-39), and one count of wire fraud (Count 40).
According to the indictment, the defendants engaged in a bank fraud scheme using straw buyers to obtain loans using false supporting information and documentation. To execute the scheme, the defendants allegedly recruited and induced individuals to act as straw buyers/loan applicants for boats from companies owned by or associated with the defendants. The straw buyers/loan applicants would then submit loan applications to financial institutions. The applications contained false financial information and documentation regarding purported down payments and deposits allegedly made by the straw buyers/loan applicants to the defendants’ boat companies.
The defendants also allegedly falsified the financial records of the straw buyers/loan applicants, including IRS W-2 Forms, bank statements and federal income tax returns, and submitted these false financial documents to the financial institutions. Based on these false documents and misrepresentations, the financial institutions approved and issued loans to the straw buyers/loan applicants.
The indictment further alleges that the defendants paid the straw buyers/loan applicants a portion of the loan proceeds that the boat companies received from the lending institutions, as payment for their service and also to cover some of the monthly payments on the loans so as to keep the fraud afloat. The defendants paid the straw buyers/loan applicants in cash and through third party checks to avoid detection. Lastly, the defendants diverted the loan proceeds for their personal use and used some of the money to perpetuate the fraud scheme.
If convicted, the defendants face the following possible maximum statutory sentences: 30 years in prison for conspiracy to commit bank fraud and substantive bank fraud; 20 years for money laundering conspiracy, substantive money laundering (Counts 22-31), and wire fraud; and 10 years for substantive money laundering (Counts 32-39).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and J.D. Patterson, Director, Miami-Dade Police Department, announced the indictment.
Mr. Ferrer commended the ICE-HSI, IRS-CI, Florida Department of Insurance Fraud, and the Miami-Dade Police Department for their outstanding investigative work in this case. The case is being prosecuted by Assistant U.S. Attorney Robert J. Lehner.