5 Admit Stealing $5 Million from Lenders

Allison Tussey —  November 10, 2010 — Leave a comment

Thanh Van Ngo, 29, Plymouth, Minnesota, and Dang Hai Nguyen, 27, Austin, Texas, the last two of five defendants connected to a $20 million mortgage fraud scheme appeared in federal court in Minneapolis, Minnesota, to plead guilty to charges in connection to that crime.

Ngo pleaded guilty to one count of aiding and abetting wire fraud, and Dang Hai Nguyen pleaded guilty to one count of conspiracy to commit wire fraud. Both defendants entered their pleas before United States District Court Judge Ann D. Montgomery. The two men were indicted, along with three co-defendants, on April 21, 2010. The co-defendants include Vince Long Nguyen, 36, Minneapolis, Minnesota; Jesse Steven Moxness, 33, Blaine, Minnesota; and Trung Quang Tran, 28, Minneapolis. The scheme involved 54 Minnesota homes and resulted in a $5 million loss to various mortgage lenders.

In their plea agreements, the defendants admitted operating the mortgage fraud scheme between 2006 and 2009. During that time period, Tran was either an owner or co-owner of several businesses that negotiated with builders to purchase residential properties at discount prices. Those properties were located in a number of Minnesota communities, including Buffalo, Coon Rapids, and St. Paul. Vince Nguyen was the owner of a business that handled real estate closings. Ngo worked as a loan
officer and co-owned a company with Tran through which he too negotiated with builders to purchase residential properties at discounted prices. Moxness was a home builder, and Dang Nguyen worked to recruit real estate investors.

Ngo admitted that on November 28, 2006, he recruited a straw buyer to purchase a St. Paul, Minnesota, residence, and that he reported false information about that buyer on the mortgage loan application so the buyer would qualify for a loan. Based on the fraudulent application, a $380,000 loan was awarded; and at closing, Ngo received a $70,753 kickback. Then, three days after closing, Ngo issued a $10,000 check to the straw buyer. The financial transactions were made via wire transfers. In all, Ngo was responsible for fraudulent activities involving 15 properties, with a related loss amount of approximately $1.7 million.

Dang Nguyen admitted that between 2007 and 2008, he too recruited straw buyers and produced fraudulent loan applications, which were then sent to various mortgage lenders and ultimately approved. Dang Nguyen also received a portion of the loan proceeds, as a “commission,” for each straw buyer he recruited. Dang Nguyen was responsible for illegal activity involving eight properties, with a related loss amount of approximately $1.3 million.

The co-defendants already have pleaded guilty. On November 3, 2010, Vince Long Nguyen pleaded guilty to one count of wire fraud. On October 29, 2010, Moxness, pleaded guilty to one count of conspiracy. And, on October 28, 2010, Tran, pleaded guilty to one count of wire fraud.

Specifically, Moxness admitted building homes that were then appraised for significantly more money than they were worth. Those homes were purchased by straw buyers through Tran and Ngo and, eventually, went into foreclosure. Moxness received a kickback of $15,000 for each residence built for the scam. Moxness was responsible for criminal activity involving nine properties, with a resulting loss amount of approximately $1 million. Tran admitted recruiting investors with good credit to buy homes, promising them kickbacks of between $1,250 and $10,000 per purchase. Investors were told Tran‘s company, Invescorp, would lease the purchased properties on their behalf and use the rental income to pay the investors’ mortgage payments and other property expenses. Investors were also told the properties would be sold for profit, to be shared by them and the defendants. In addition, Tran admitted helping prepare false loan applications, which were submitted to mortgage lenders. Based on those fraudulent applications, more than $20 million in loan proceeds were approved. The proceeds were disbursed contrary to the understanding of the lenders, and Vince Nguyen admittedly provided false settlement statements to the lenders to conceal the fraud scheme. Tran was responsible for fraudulent activity involving 30 properties, with a related loss amount of approximately $4.8 million, while Vince Nguyen‘s actions involved 34 properties, with a resulting loss amount of approximately $5 million.

For their crimes, the defendants face a potential maximum penalty of five years in prison on the conspiracy charge and 20 years on the wire fraud charge. Judge Montgomery will determine their sentences at a future hearing, yet to be scheduled.

This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Christian S. Wilton.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The Task Force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Allison Tussey

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