Lilia Casal-Diaz, 42, a real estate attorney, Andres Mendez, a/k/a “Andy Mendez, Sr.,” 47, and his son, Andy Mendez, a/k/a “Andy Mendez, Jr.,” 26, who both worked as real estate brokers, Josephine Santana, 57, a mortgage broker, Jose Rafael Martinez, 36, and Basilio Gomez, 52, all of Miami-Dade County, Florida, have been sentenced to terms of imprisonment for their participation a multi-million dollar mortgage fraud scheme at the luxury Jade apartment complex, Brickell Bay Drive, Miami, Florida.
According to the indictment and other court documents, the mortgage fraud scheme resulted in more than $5.6 million in mortgage proceeds that were fraudulently obtained from various lending institutions, as well as tax related offenses involving willful failure to declare to the IRS proceeds from such transactions.
According to statements in open court and court documents, the defendants engaged in a multi-million dollar mortgage fraud scheme using straw buyers to purchase residential properties at The Jade apartment complex. As part of the scheme, the defendants submitted mortgage loan applications and supporting documents containing false information to lending institutions. The lending institutions relied on these documents to make mortgage loans to the straw buyers to purchase the residential properties. The defendants then prepared and submitted to the lenders false HUD-1 statements.
The defendants created a second version of the HUD-1 statements, listing the actual sales prices, which were provided to the seller. To conceal and perpetuate the fraud, the defendants made some payments to the condominium association and made some mortgage payments to the lenders to prevent foreclosure and continue to receive rental income for the units. The defendants thereafter diverted the mortgage fraud proceeds into shell companies for their personal use.
On December 7, 2012, Casal-Diaz was sentenced by U.S. District Judge Donald M. Middlebrooks to a year and day in prison, along with one year of home confinement and three years supervised release. Casal-Diaz also was ordered to pay restitution to the IRS of $509,543.36. As previously reported by Mortgage Fraud Blog, Casal-Diaz pled guilty on October 4, 2012 to conspiracy to commit tax fraud, in violation of Title 18, United States Code, Section 371, in connection with creating false documents to conceal from the IRS loan proceeds that were derived from the mortgage fraud scheme.
According to court documents, Casal-Diaz, who practiced law in Coral Gables, falsified HUD-1 documents to support the loan fraud scheme, and then failed to report on IRS Form 1099-S the sales proceeds from the transactions, or otherwise intentionally under-reported such proceeds. In addition, when approached by IRS-CI agents, Casal-Diaz provided the agents with a phony Form 1099-S document, falsely indicating that proceeds from one of the real estate closings was properly reported to the IRS.
Previously, on November 28, 2012 before Judge Middlebrooks, Andres Mendez, Sr. was sentenced to 60 months in prison, to be followed by five years of supervised release. Also on November 28th, Andy Mendez Jr. was sentenced to a year and a day in prison, 18 months of home confinement and five years of supervised release. Both were and was ordered to pay restitution of $4,232,542.67. Both defendants previously pleaded guilty (Mendez, Sr., Medez, Jr.) to conspiracy to commit mail fraud in violation of 18 U.S.C. • 1349, on September 6, 2012.
On October 29, 2012 before Judge Middlebrooks, Josephine Santana was sentenced to 21 months in prison, Jose Rafael Martinez was sentenced to 18 months in prison, and Basilio Gomez was sentenced to 15 months in prison. All three defendants were also sentenced to five years of supervised release and ordered to pay $1,202,861.14 in restitution. Previously, all three defendants pled guilty to conspiracy to commit mail fraud in connection with the Jade mortgage fraud scheme, in violation of Title 18, United States Code, Section 1349.
In a related case, Raquel DeJesus Martinez pled guilty to conspiracy to commit mail fraud and money laundering, in violation of Title 18, United States Code, Section 371, in connection with the same mortgage fraud scheme. Sentencing is scheduled for January 22, 2013 before Judge Middlebrooks. At sentencing, the defendant faces a possible statutory maximum sentence of up to five years in prison and a possible fine of up to $250,000.
In another related case, defendant Jose Arnaldo Rosario, 55, Miami-Dade County, was sentenced on August 5, 2011 for his role in the scheme. Rosario was sentenced to 46 months in prison, to be followed by 3 years of supervised release. Rosario previously pled guilty to conspiracy to commit money laundering and wire fraud, in violation of Title 18, United States Code, Section 371. Rosario provided false information to the lending institution and received two kickbacks from the purchase of two apartments.
To date, eight defendants have been convicted in connection with this mortgage fraud scheme involving the Jade condominiums.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), and Paula Reid, Special Agent in Charge, United States Secret Service, Miami Field Office, announced the sentence.
Mr. Ferrer commended the investigative efforts of IRS-CID and the U.S. Secret Service. This case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.