Guilty Plea Entered in Case Involving Fraudulent Loan Documents

Alexander Sivels, II, 28, Baltimore, Maryland, pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore using fraudulent loan documentation and settlement documents, resulting in actual or attempted losses of more than $1 million.

According to Sivels‘ plea agreement, in 2007 or 2008, Sivels met Andreas Tamaris, a Baltimore real estate developer whose business focused on buying, renovating and reselling homes in Baltimore City, especially in the area east of Patterson Park.

Sivels, who owned Royal Real Estate Consultants LLC, agreed to assist Tamaris to find purchasers for houses he had bought and renovated, or that were owned by developers who owed money to Tamaris for renovation work. Tamaris told Sivels what he needed to receive from the sale of each property to recover his investment and earn a profit. Tamaris told Sivels that he could keep any excess funds generated if Sivels sold the house for more than the amount Tamaris needed to cover his costs.

Between 2008 and 2011, Sivels participated in the sale of at least nine properties, all of which were eventually foreclosed upon, resulting in a loss of at least $1 million. In 2008 and 2009, Sivels recruited buyers to purchase houses, knowing that they did not qualify for the home mortgages. Two of the buyers purchased two properties, neither of which they could afford. To enable the buyers to purchase the properties, Sivels prepared fraudulent mortgage applications which misrepresented the buyers’ income and assets.

Sivels sometimes created fake tax documents and false pay stubs, and falsified bank statements to reflect the substantial balances referenced by the loan application. Sivels often inflated the price of the house to insure a profit for himself. At the settlements for the properties, the proceeds of the sale were generally distributed to Tamaris, who would write checks to Sivels for his portion of the profits.

In 2010 and 2011, Sivels assisted with the sales of several other Tamaris-owned properties by providing prospective lenders with fraudulent verifications of employment for the purchasers, falsely representing that they worked at a home renovation company Sivels owned, receiving cash payments in return for his assistance.

Tamaris previously pleaded guilty to one count of conspiracy to commit mail and wire fraud and is scheduled to be sentenced on March 6, 2013 at 10:00 a.m.

Sivels faces a maximum sentence of 20 years in prison and a fine of $250,000. U.S. District Judge James K. Bredar scheduled his sentencing for March 20, 2013, at 2:00 p.m.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Joe Clarke of the U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) – Office of Investigations; and Special Agent in Charge Robert Jasinski of the United States Secret Service – Baltimore Field Office.

“Mortgage fraud perpetrators steal from lenders that are induced to make loans that will never be repaid and damage neighborhoods when the resulting foreclosures drive down property values,” stated U.S. Attorney Rod J. Rosenstein.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.

The announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

United States Attorney Rod J. Rosenstein praised the FBI, HUD OIG-Office of Investigations and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.