Seven people were charged with mail fraud, wire fraud, and making false statements in connection with a mortgage fraud scheme involving the purchase of at least 23 homes.
On March 28, 2013, a federal grand jury returned an indictment charging: Aleksandr Kovalev, 50, Rocklin, California; Arthur Chang Menefee, 42, Stockton, California; Adil Qayyum, 31, Rosele, Illinois; Jannice Riddick, aka Jannice Frazier, 30, Sacramento, California; Florence Francisco, 62, Houston, Texas; Elsie Pamela Fuller, 38, Richmond, California; and Leona Yeargin, 46, San Pablo, California Fuller and Yeargin were also charged with aggravated identity theft for using stolen identification to purchase a home as part of the mortgage fraud scheme.
According to the indictment, Kovalev developed, built and sold property in Sacramento. In a declining real estate market, Kovalev, Menefee, a licensed real estate salesperson, Riddick, a licensed real estate salesperson, and Francisco, a licensed mortgage broker, recruited others with sufficient credit scores to act as straw buyers for residential properties. Kovalev, through Menefee, Riddick, Francisco, and Qayyum, made cash incentive payments to the straw buyers. These payments were concealed from the lenders.
In order to qualify for the mortgage loans, Menefee, Riddick, Francisco, and Fuller also allegedly prepared fraudulent loan applications to lenders, falsely stating the straw buyer’s income, assets, and intent to occupy the homes as their primary residences. Further, Yeargin and Fuller used the identification of another individual without that individual’s knowledge or authorization to purchase a property from Kovalev as part of the mortgage fraud scheme. Additionally, Menefee and Qayyum participated in a similar mortgage fraud scheme with respect to properties sold by individuals other than Kovalev.
United States Attorney Benjamin B. Wagner announced the indictment.
This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Sacramento County District Attorney’s Office. Assistant United States Attorney Todd A. Pickles is prosecuting the case.
If convicted of wire or mail fraud, or making false statements on a loan application the defendants Kovalev, Menefee, Qayyum, Riddick and Francisco face a maximum penalty of 30 years in prison and a $1 million fine. Fuller and Yeargin face a maximum penalty of 20 years in prison and a $250,000 fine for the charges of wire and mail fraud, and a consecutive two-year sentence for the aggravated identity theft counts. Any sentences, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
These cases were done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.