Archives For Stephanie Abbott

Patrick Lee, 45, formerly of Canton and Easton, Massachusetts, a dual U.S.-Irish citizen,  pleaded guilty yesterday to charges arising out of a multi-year mortgage fraud scheme.

Between July 2005 and May 2007, Lee engaged with others in a mortgage fraud scheme. Specifically, Lee or a relative bought five multi-family buildings in Dorchester and South Boston, Massachusetts financed those purchases with fraudulently obtained mortgage loans, and quickly converted the buildings to condominiums which facilitated the resale of individual units in the buildings to straw buyers. The straw buyers were recruited for this purpose and their purchases were financed with fraudulently obtained mortgage loans. The straw buyers were assured that they would not have to put any money down or pay the mortgages, and that they would get a fee at closing and/or a share of the profits when the properties were sold. The loans were funded with interstate wire transfers from the mortgage lenders to the closing attorneys’ conveyancing accounts, and the proceeds were then distributed to Lee and/or a family member, the recruiters, and others involved in the scheme. According to the government, mortgage lenders suffered losses of more than $1.5 million.

Lee pleaded guilty to wire fraud and making an unlawful monetary transaction. Chief U.S. District Judge Patti B. Saris scheduled sentencing for Feb. 28, 2019. Lee was extradited from Ireland to the United States last year to face the charges. It was Ireland’s first extradition to the United States since 2012.

The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of unlawful monetary transactions provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the amount of criminally derived property. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service, Boston Field Office, made the announcement today. Assistant U.S. Attorneys Sandra S. Bower and Christine Wichers of Lelling’s Criminal Division are prosecuting the case.

 

Blanche O’Neal, 49, Bedford-Stuyvesant, Brooklyn, New York , a former New York City police officer, has been sentenced today to six months in jail and five years’ probation for transferring the title from a neglected three-family house in Bedford-Stuyvesant to herself. The defendant filed a deed transferring the property from the deceased owner’s nephew to herself in 2012, only to see her scheme unravel when the nephew was approached by an actual potential buyer in 2014.

According to trial testimony, on September 12, 2012, the defendant, who was an NYPD officer, executed a deed that stated that she bought the property, 23A Vernon Avenue, Bedford-Stuyvesant, Brooklyn, New York from the nephew of the deceased homeowner, Lillian Hudson, who died in 1993. The nephew and several relatives inherited the property, though it sat vacant and neglected for many years.

The defendant, according to trial testimony, falsely indicated in her filings with the New York City Department of Finance, Office of the City Register, that she purchased the property for $10,000 from the nephew and the deed was purportedly signed by him. The Office of the City Register recorded the deed on October 11, 2012.

Furthermore, in connection with a burglary involving the property, the defendant falsely testified before a grand jury on September 29, 2014, that she owned the property.

In 2014, the nephew and the other heirs were approached by a buyer in the form of a business entity known as 23A Vernon LLC. That is when Lillian Hudson’s heirs discovered the 2012 deed that was filed by the defendant.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “This defendant has now been held accountable for this fraudulent real estate scheme. I will continue to protect Brooklyn homeowners whose valuable properties may be targeted by scam artists. I urge property owners to register their homes with ACRIS (Automated City Register Information System) so that they are automatically informed of changes made to documents associated with their property, such as occurred in this case.”

O’Neal was sentenced today to six months in jail and five years’ probation by Brooklyn Supreme Court Justice Danny Chun. She was convicted of first-degree perjury, second-degree criminal possession of a forged instrument and first-degree offering a false instrument for filing in February following a bench trial before Justice Chun.

The case was prosecuted by Senior Assistant District Attorney Frank Dudis and Assistant District Attorney Ellen Koenig of the District Attorney’s Real Estate Fraud Unit, and Assistant District Attorney Richard Farrell, Unit Chief, under the supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the District Attorney’s Investigations Division.

 

Surjit Singh, 72, Dublin, California, Rajeshwar Singh, 44, Pleasanton, California and Anita Sharma, 56, Gilroy, California were sentenced today for crimes relating to their involvement in a mortgage fraud scheme.

According to court documents, in 2006 and 2007, Surjit Singh recruited individuals with good credit to act as straw buyers for residential properties owned by his family members and associates. Rajeshwar Singh, a licensed real estate agent, assisted in the scheme by submitting loan applications for the straw buyers. Anita Sharma, a dental assistant at the time, was one of the straw buyers. Because Sharma and the other straw buyers could not afford the homes based on their true incomes, the Singhs submitted fraudulent loan applications and supporting material to lending institutions that included false statements about the straw buyers’ income, employment, liabilities, and intent to occupy the homes as their primary residences.

At least 14 properties were involved in the scheme. Anita Sharma alone purchased five homes in San Jose, San Ramon, Elk Grove, Sacramento, and Modesto, California. Other straw buyers purchased or refinanced properties in Stockton, Modesto, Patterson, Lathrop and Tracy, California. All of these homes were ultimately either foreclosed upon or sold in a short sale where the bank lets homeowners sell their homes for less than is owed on the mortgage.

Sharma was paid for her involvement in the scheme. Rajeshwar Singh received financial benefits through broker commissions for the transactions and as the seller of seven of the properties. He also continued to occupy the San Ramon property at a time when Anita Sharma should have been living there. Surjit Singh benefitted through payments out of escrow directed to shell companies, such as SJR Investments and BK Investments, which were associated with his daughter and significant other, whose initials are SJR and BK respectively. These payments were purportedly for contracting services, which did not occur. He also benefitted through rental payments made to him and his significant other by the renters of the homes, as the straw buyers were not living in the homes. In addition, many of his family members received money by selling properties and had money directed to them out of escrow. According to court documents and evidence produced at trial, the defendants were responsible for the origination of more than $9.3 million in fraudulently procured residential mortgage loans.

Surjit Singh was sentenced to 11 years and three months in prison, his son, Rajeshwar Singh was sentenced to 11 years and three months in prison on four counts of mail fraud, four counts of bank fraud, and four counts of false statements on loan and credit applications. Anita Sharma, was sentenced to three years and 10 months in prison on two counts of mail fraud, two counts of bank fraud, and two counts of false statements on loan and credit applications. Surjit Singh was ordered to pay a $2 million fine, $698,787 in restitution, and $847,000 in forfeiture. Raj Singh was ordered to pay a $1 million fine, $928,287 in restitution, and $838,399 in forfeiture. Anita Sharma was ordered to pay $603,180 in restitution and $30,000 in forfeiture.

Surjit Singh is in custody.  Rajeshwar Singh and Anita Sharma are scheduled to self‑surrender on January 9, 2019.

U.S. Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Lee S. Bickley, Kelli L. Taylor, and Kevin Khasigian prosecuted the case.

Christopher B.  Pitts, 48, Georgia, who was previously a practicing attorney in Montgomery, Alabama, received a 37-month sentence on November 6, 2018 for devising a scheme to commit wire fraud affecting a financial institution.

According to court documents, between 2005 and 2008, Pitts served as a closing attorney for the sales of all homes owned by HUD in northern and central Alabama.  As the closing attorney, it was Pitts’ job to receive purchase money, pay closing costs, and transmit to HUD the remaining purchase money.  As Pitts admitted when he pleaded guilty, on numerous occasions, he did not actually remit payments to HUD.  As a result of Pitts’ fraud, HUD never received the money it was owed for the sale of HUD-owned houses.

United States District Judge L. Scott Coogler sentenced Pitts after he pleaded guilty to defrauding the United States Department of Housing and Urban Development (HUD).

At the sentencing hearing, Judge Coogler found that Pitts was responsible for causing a total loss to HUD of $1,090,888.53.  The judge ordered that Pitts make full restitution to HUD upon his release from prison.

This case was investigated by HUD’s Office of Inspector General.  Assistant U.S. Attorney Jonathan S. Ross prosecuted the case.

 

UBS AG  and several of its United States affiliates (together, UBS), has been sued by The United States Government alleging that UBS defrauded investors throughout the United States and the world in connection with its sale of residential mortgage-backed securities (RMBS) in 2006 and 2007.

The complaint alleges that UBS’ actions violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud, and other misconduct.  FIRREA authorizes the Attorney General to seek civil penalties up to the amount of the gain derived from the violation or the losses suffered by persons other than the violator resulting from the violation.

As detailed in the complaint, from 2006 through 2007, UBS allegedly misled investors about the quality of billions of dollars in subprime and Alt-A mortgage loans backing 40 RMBS deals.  Specifically, in publicly-filed offering documents, UBS is alleged to have knowingly misrepresented key characteristics of the loans, thereby concealing the fact that the loans were much riskier and much more likely to default than UBS represented.  In the end, the 40 RMBS sustained catastrophic losses.

The complaint alleges that instead of ensuring that their representations to investors were accurate and transparent, UBS affirmatively misled investors and withheld crucial information from them about the loans in its deals,” said U.S. Attorney Pak.  “UBS allegedly placed a higher priority on selling bonds and making profits than accurately representing the quality of the underlying loans to investors.  These practices resulted in massive losses to investors, harmed homeowners, and ultimately jeopardized the banking system.”

The fraudulent actions by UBS as alleged in the complaint contributed to the 2008 financial crisis, which resulted in lasting economic harm to the nation and unnecessary suffering for Americans,” said Principal Deputy Associate Attorney General Jesse Panuccio. “This suit aims to hold UBS accountable and sends a strong message that the Department of Justice will not tolerate fraud committed by corporations.

Investors who bought RMBS from UBS suffered catastrophic losses, which not only caused direct harm to those investors, but also contributed to the financial crisis of 2008,” stated U.S. Attorney Richard P. Donoghue.  “The filing of this complaint makes it clear that we will continue to hold financial institutions fully accountable for their conduct and will aggressively pursue financial fraud.”

The government’s case is being handled by the U.S. Attorney’s Offices for the Northern District of Georgia and the Eastern District of New York.  The Office of the Inspector General for the Federal Housing Finance Administration also provided assistance in the government’s investigation.

Assistant U.S. Attorneys Austin M. Hall and Armen Adzhemyan with the Northern District of Georgia; and Assistant U.S. Attorneys Bonni J. Perlin, Michael J. Castiglione, Richard K. Hayes with the Eastern District of New York are prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov (link sends e-mail) or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Angela Grace Cotton, 46, Lawrence Edward Cotton, 52, Denaysha Coleman, 26, and Latrese Gevon Breaux, 26, California, have been charged today with running a sophisticated real estate scheme that resulted in the theft of more than $1.4 million.

From July 2014 through September 2016, Angela Cotton, assisted by her co-defendants, allegedly used fictitious escrow and title companies that she had created to deceive a lending company into believing it was funding two legitimate real estate transactions, according to Deputy District Attorney Daniel Kinney of the White Collar Crime Division’s Real Estate Fraud Section.

The group is accused of stealing the identities of nine people in order to facilitate the fictitious real estate sales. Along with the fake escrow and title companies, the defendants allegedly created a fictitious place of employment for one supposed homebuyer under whose name the two loans were approved, the prosecutor said.

To convince the lender of the legitimacy of the transactions and the entities involved, the defendants allegedly created fraudulent websites, emails and phone networks along with fake employment documentation and bank account statements from a non-existent financial institution for the borrower.

The lender transferred funds to a bank account it believed to be owned by a legitimate title company but was allegedly owned by one of the defendants.

The properties for which the defendants received loans were located in Los Angeles and La Cañada Flintridge, California and had not been listed for sale, the prosecutor added.

They are charged with 28 felony counts, including identity theft, forgery, mortgage fraud, grand theft of personal property, attempted grand theft of personal property, money laundering and counterfeit seal, according to the criminal complaint in case BA472018.

Additionally, Angela Cotton faces one felony count of possession of a firearm by a felon with four priors, and Lawrence Cotton is charged with one felony count of receiving stolen property exceeding $950 in value.

The charges include allegations of fraud and embezzlement resulting in the loss of more than $500,000, taking property exceeding $1.3 million in value and theft of more than $100,000. The case was filed for arrest warrant on October 16, 2018.

Angela Cotton, Coleman and Breaux were arraigned this week and pleaded not guilty. A preliminary hearing setting is scheduled for December 6, 2018 in Department 30 of the Foltz Criminal Justice Center.

Lawrence Cotton is still at large.

Angela Cotton was convicted in March 2010 in federal court for a similar real estate fraud scheme.

Angela and Lawrence Cotton each face a possible maximum sentence of 22 years and eight months in state prison if convicted as charged. Coleman and Breaux face a possible maximum sentence of 22 years in prison.

Bail was set at $1.41 million for Angela Cotton, $1 million for Coleman and $1.37 million for Breaux. The prosecutor is requesting bail for Lawrence Cotton be set at $1.39 million.

The Los Angeles County District Attorney’s Office made the announcement.

The case remains under investigation by the Los Angeles County Sheriff’s Department, Fraud and Cyber Crimes Bureau.

Jason Anthony Martinez, 38, Tampa, Florida has been sentenced to an additional three months’ imprisonment for a total of 27 months’ imprisonment for lying to the U.S. Attorney’s Office’s Financial Litigation Unit and U.S. Probation to avoid his restitution obligation in a mortgage-related fraud case.

According to the plea agreement, Martinez was previously convicted and ordered to pay $3,008,551.01 in restitution. On October 24, 2017, Martinez signed and submitted a Financial Disclosure Form, upon which he falsely claimed a net income that was approximately half his actual net income and failed to disclose a number of credit accounts. This false information materially and adversely affected the resulting restitution-related payment calculations in his prior case. http://www.mortgagefraudblog.com/?s=Jason+Anthony+Martinez

In addition, he was sentenced to an additional two years of supervised release, extending his post-incarceration supervision to a total of five years.

The U.S. Attorney’s Office, recognizing the critical importance of recovering restitution for victims, has a Financial Litigation Unit that collects criminal monetary penalties, including restitution, imposed on criminal defendants by the U.S. District Court as part of his or her sentence. One of the tools used by the Unit to collect restitution is the Financial Disclosure Statement, which requires defendants to truthfully disclose, among other things, their income, expenses, assets, and liabilities.

This case was investigated by the U.S. Attorney’s Office’s Economic Crimes Section. It was prosecuted by Assistant United States Attorney Thomas N. Palermo.

Sergio Roman Barrientos, 64, Poway, California was sentenced today in multimillion dollar mortgage and foreclosure rescue fraud scheme. Barrientos was sentenced to 14 years in prison for conspiring to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, from about September 2004 through February 2008, Barrientos and co-conspirators Zalathiel Aguila and Omar Anabo operated an entity named Capital Access LLC, Vallejo, California. They preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the distressed homeowners’ properties was then used for operational expenses of the scheme and personal expenses of Barrientos and his coconspirators. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud. http://www.mortgagefraudblog.com/?s=Sergio+Roman+Barrientos

Co-defendant Zalathiel Aguila pleaded guilty and is scheduled for sentencing on November 16, 2018. Aguila faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will 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.

U.S. Attorney McGregor W. Scott made the announcement.

This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

James Bayfield, 46, Queens, New York was sentenced today to 21 months’ imprisonment, to be followed by three years of supervised release, for conspiracy to commit bank and wire fraud.

Bayfield, a self-described mortgage specialist, was convicted by a federal jury in January 2017 for his role in a multi-million dollar mortgage fraud scheme. http://www.mortgagefraudblog.com/?s=James+Bayfield

Between September 2008 and May 2011, Bayfield and his co-conspirators caused mortgage loan applications with false information to be submitted to lending institutions, including Amtrust, Bank of America and JPMorgan Chase, in connection with the purchase of residential properties located in Brooklyn and Queens, New York.  These applications contained fraudulently inflated purchase prices and false information about the assets and income of the purported purchasers, many of whom were paid to act as straw purchasers.  Bayfield and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and other borrowers had made down payments on the properties.

To complete their scheme, Bayfield and his co-conspirators conducted simultaneous and secretive purchases and sales of the properties, sometimes called “flips,” at inflated prices.  Ultimately, the lending institutions issued millions of dollars of mortgage loans secured by properties with inflated appraisal values, and many of these loans were placed into default status.

Bayfield was also ordered to pay $184,651 in forfeiture.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentencing.

Bayfield has portrayed himself as a mortgage specialist, but now stands exposed as a convicted thief who used his knowledge of real estate transactions to carry out his fraudulent schemes against lending institutions,” stated United States Attorney Donoghue.  “This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of lenders left holding the loans.”  Mr. Donoghue thanked the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of Inspector General; the Federal Deposit Insurance Corporation, Office of Inspector General; and the New York State Department of Financial Services for their hard work and dedication over the course of this multi-year investigation and prosecution.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David C. Pitluck, Mark E. Bini and Michael T. Keilty are in charge of the prosecution.

Joseph Bates III, 38, Wakefield, Massachusetts pleaded guilty today in connection with a decade-long mortgage fraud scheme involving at least two dozen fraudulent loan transactions and $4.3 million in losses to lenders.

According to the charging documents, from 2006 through 2015, Bates and others engaged in a scheme to defraud banks and other financial institutions by causing false information to be submitted to those institutions on behalf of borrowers, people recruited to purchase properties, located primarily in Salem,Massachusetts . The properties were usually multi-family buildings with two-to-four units, which the co-conspirators then converted into condominiums. The co-conspirators recruited other borrowers to purchase the individual condominium units, which were also financed by fraudulent mortgage loans. http://www.mortgagefraudblog.com/?s=Joseph+Bates+III

Bates was charged with one count of conspiracy, three counts of wire fraud affecting a financial institution, and two counts of bank fraud. A sentencing date has not yet been scheduled. One of Bates’ alleged co-conspirators, George Kritopoulos, 46, Salem, Massachusetts was indicted on related charges in September 2018, and another participant, David Plunkett, 52, Lynn, Massachusetts was charged by Information.

The false information submitted to lenders included, among other things, representations concerning the borrowers’ employment, income, assets, and intent to occupy the property. Specifically, the false employment information included representations that borrowers were employed by entities that were, in fact, shell companies used to advance the fraudulent scheme. The employment information included false representations about the income that the borrowers received from the entities, when, in fact, the borrowers received little or no income from them.  Furthermore, the income asserted on the borrowers’ loan applications substantially overstated their true income. The false information also included representations that the recruited borrowers intended to live in the properties that they were purchasing, when the borrowers, in fact, did not intend to do so. Plunkett allegedly assisted the scheme by preparing tax returns for some of the borrowers that contained false and inflated income. Some of those tax returns were submitted to lenders in support of the fraudulent loan applications.

Because the borrowers did not have the financial ability to repay the loans, in many instances, they defaulted on their loan payments, resulting in foreclosures and losses to the financial institutions of more than $4.3 million.

The charges of bank fraud and wire fraud affecting a financial institution each provide for sentences of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million. The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  Assistant U.S. Attorneys Mark J. Balthazard and Sara Miron Bloom of Lelling’s Securities and Financial Fraud Unit are prosecuting the case.

The details contained in the charging documents are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.