Business Owner Admits Mortgage and Tax Fraud Schemes

Allison Tussey —  May 11, 2015 — Leave a comment

Luis R. Valladares, 52, Hanover, Maryland, pleaded guilty to mail fraud, admitting that his fraud schemes resulted in total losses of approximately $779,277. Valladares applied for and obtained mortgages from lenders using false and forged documents.

Valladares owned and operated two businesses, Amazing Cleaning and Amazing Contractors, which provided janitorial services and drywall repair to vacated commercial and residential apartments.

According to his plea, in late 2006, Valladares applied for a loan to purchase a house in Miramar, Florida.  Valladares provided fake lease documents with forged signatures of one of his employees and the employee’s relatives, and three fake money orders to make it appear that he was collecting rent.  After obtaining a mortgage loan for $484,900, Valladares only made a few payments on the loan.  The home was foreclosed upon, resulting in a loss of approximately $250,000.

In late 2007, Valladares applied for two separate loans totaling $767,000 to buy a house in Hanover, Maryland.  At the closing, Valladares omitted the Florida house as a property he owned; and reported owning a rental property in Burtonsville, Maryland, which he didn’t own or receive rental income from.  In October 2014, the Maryland house was sold in a short sale for approximately $530,000, causing a loss of approximately $237,000.

As a result of the mortgage fraud scheme, Valladares has agreed to pay restitution of $487,000, the total amount of the victims’ losses.

Beginning in approximately 2003, Vallardares also engaged in tax fraud by substantially understating income on business and personal tax returns.  He diverted about $346,951 in third-party checks payable to the businesses to his personal accounts, and did not provide tax return preparers with information pertaining to these transactions.  As a result, income deposited into his personal account was not reported either on business or personal tax returns.

In 2005 and 2006, Vallardares also engaged in tax fraud by writing a series of company checks to his brother and his brother’s business, ostensibly for business expenses.  For nine of these checks totaling $152,000, his brother then endorsed the checks back over to Valladares or his then-wife, who deposited the checks into their personal bank account. They claimed these checks as business expenses on their tax returns.

Vallardes wired approximately $618,500 from a personal account to an account he controlled in Ecuador, and falsely claimed to IRS investigators that he was building apartment buildings in Ecuador as an investment.

The tax loss resulting from the tax fraud schemes totaled $292,277.

After the IRS investigation had begun, Valladares left the United States for Ecuador in September 2011.  Charges against him were filed in federal court in Maryland in October 2011.  Valladares was arrested in September 2014 when he arrived in Aruba for his honeymoon, and he was returned to the United States for prosecution.

Valladares faces a maximum sentence of 20 years in prison.  U.S. District Judge William D. Quarles, Jr. scheduled his sentencing for July 29, 2015, at 1:00 p.m.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.

United States Attorney Rod J. Rosenstein commended the IRS – Criminal Investigation for its work in the investigation and thanked Assistant U.S. Attorney Gregory R. Bockin, who is prosecuting the case.

Allison Tussey

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