California Man Sentenced for Downpayment Fraud

Allison Tussey —  February 23, 2012 — Leave a comment

Gabriel Viramontes, 49, Elk Grove, California, was sentenced by United States District Judge Edward J. Garcia to four years and nine months in prison and ordered to pay restitution to his victims for a mortgage fraud scheme.

On March 31, 2011, a federal jury found Viramontes guilty of six counts of bank fraud and seven counts of mail fraud. Three co-defendants pleaded guilty to related charges before the trial.

According to testimony presented at trial, Viramontes and his co-defendants engaged in a Sacramento, California-area mortgage fraud scheme that involved at least 19 homes with loans of more than $8 million. From July 2006 through October 2006, they used VFM Investment Group, Esnian Mortgage Realty, and Freedom Capital Mortgage to engage in a mortgage fraud scheme. They solicited people to purchase with no money down single-family homes on behalf of others with bad credit who wished to purchase homes.

Those solicited were told they would benefit financially from the transactions. The defendants then defrauded lenders such as Washington Mutual Bank, Long Beach Mortgage, and Fremont Investment and Loan by submitting fraudulent loan applications that inflated the buyers’ income, falsely stated that a buyer was employed at a specific job, and falsely stated that the properties would be owner-occupied. The purpose of the scheme was to ensure that the home-purchase transactions closed, so that the defendants would receive substantial loan broker commissions and illegal kickbacks from real estate sales commissions.

Co-defendants James Roy Martin, 34, and Mario Fellini III, 42, who pleaded guilty and testified against Viramontes at trial were also sentenced. Martin was sentenced to 20.5 months in federal prison and Fellini was sentenced to six months prison and five months home detention. The fourth defendant, Joseph Salvatore Gallo, 38, was sentenced last month to five years’ probation. All are from the Sacramento area.

United States Attorney Benjamin B. Wagner announced the sentence.

This case was the product of an investigation by the IRS Criminal Investigation, the Federal Bureau of Investigation, and the California Department of Real Estate. Assistant United States Attorneys Matthew C. Stegman and Michael D. Anderson prosecuted the case.

Allison Tussey

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