Archives For Mortgage Fraud

Michael Quiroz, Tucson, Arizona, was sentenced by U.S. Chief District Judge Raner C. Collins to 36 months in prison.  Quiroz was previously found guilty at trial of wire fraud and conspiracy to commit wire fraud.

The evidence established that Quiroz, a loan officer and mortgage broker, was involved in a multi-year, multi-million dollar cash-back mortgage fraud conspiracy.  Quiroz and others recruited straw buyers to purchase residential properties at inflated prices and Quiroz also helped the straw buyers fraudulently obtain the loans needed to purchase the properties.  The methods used to obtain the loans included fake lease agreements, fake letters of employment, fake letters of credit, and false statements of intent to occupy a property as a primary residence.  Portions of the fraudulently-obtained mortgages were diverted to the bank accounts of Quiroz’s co-conspirators, who would thereafter send kickbacks to Quiroz.  Many of the properties purchased during the scheme eventually went into foreclosure, and the lenders’ losses relating to Quiroz’s conduct during the conspiracy totaled approximately $2.3 million.

The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation.  The prosecution was handled by the U.S. Attorney’s Office, District of Arizona, Tucson.

 

Margie P. Shephard, 51, Kansas City, Missouri, pleaded guilty to obstruction of justice after forging a court order to get another inmate released from prison.

Shephard was incarcerated as an inmate at Federal Prison Camp-Bryan in Bryan, Texas, after being sentenced to 10 years for conspiracy to commit bank fraud and identity theft, aggravated identity theft and obstruction of justice.

By pleading guilty, Shephard admitted that, while incarcerated, she fabricated a document purporting to be an Amended Judgment in a Criminal Case for fellow inmate Leann Raejeana Turner, 48, Blue Springs, Missouri. Turner was also incarcerated at Federal Prison Camp-Bryan after being sentenced to three years in prison for her role in an $11 million mortgage fraud scheme. The fake court order, with a reduced sentence of 120 days of imprisonment for Turner (which would have resulted in her immediate release), included the forged signature of U.S. District Judge Greg Kays.

Shephard mailed the fake court order to her sister, who then faxed it to prison officials from a Sunfresh grocery store in Kansas City, Mo., on November 9, 2014. Upon receiving the document, prison officials determined it was a forgery.

Under federal statutes, Shephard is subject to a sentence of up to 20 years in federal prison without parole.

Tom Larson, Acting United States Attorney for the Western District of Missouri, announced the plea.This case is being prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes, IV. It was investigated by the FBI.

Michael Rizzi, 45, Brooklyn, New York,and Edward Monahan, 45, Staten Island, New York, were each charged in a criminal complaint with one count of bank fraud and on count of conspiracy to commit bank fraud, in connection with a scheme to submit false documentation to a bank to make Rizzi’s sale of property to his friend and business partner look like an “arm’s length” transaction. Monahan was arrested in Staten Island, New York, and was presented in federal court. Rizzi is currently incarcerated in Federal Correctional Institute, Loretto in Pennsylvania.

Each charge carries a maximum sentence of 30 years in prison.

Rizzi, a retired New York City police officer, is currently serving a 15 month sentence for money laundering conspiracy in connection with his operation of a multi-million dollar online escort service that catered to wealthy clients who arranged assignations at their homes, at major hotels and, in at least one instance, on a five-day trip to a secluded resort in Jamaica.

According to the allegations in the Complaint unsealed in Manhattan federal court:

Rizzi purchased a property (the “Rizzi Property”) in 2007 with the assistance of a mortgage (the “Mortgage”) The Mortgage was acquired by a bank (“Bank-1”) that same year. Over time, RIZZI stopped paying the Mortgage and, in 2009, the Mortgage fell delinquent. In 2015, Rizzi contacted Bank-1 and requested a short sale due to financial hardship (the “Short Sale”). Bank-1 advised Rizzi that the Short Sale was required to be an “arm’s length” transaction, meaning that the buyer could not have any personal, familial, or business connections with Rizzi.

Later that year, Monahan agreed to buy the Rizzi Property from Rizzi. In connection with the sale and closing of the Rizzi Property, Rizzi and Monahan both executed various documents in which they affirmed that the buyer and the seller were engaged in an “arm’s length” transaction, and the seller and buyer of the Rizzi Property did not have a personal or business relationship. Rizzi and Monahan were, in fact, friends and business partners. Among other things, Rizzi and Monahan were partners in the ownership of Nitecap Megastore, a Staten Island adult sex and smoke shop. Monahan also has posted photos and videos on social media, which depict Rizzi and Monahan socializing with each other.

As a result of this scheme, Bank-1 suffered more than $250,000 in losses.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent in Charge of the United States Department of Homeland Security’s Homeland Security Investigations, announced the unsealing of the criminal Complaint.  U.S. Attorney Kim praised the investigative work of HSI’s El Dorado Task Force in this case, and thanked the New York City Police Department for its assistance.

The case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the prosecution.

Matt Garner, 34, licensed real estate appraiser, Lexington, Kentucky, was sentenced in federal court to five months in prison and five months home confinement. He was also ordered to pay a $5,500 fine. Garner pled guilty in May of 2017 to conspiracy to commit wire fraud and making false statements to a federal agency,

Garner made false statements in connection with appraisals he submitted for use by lenders in connection with federally-backed mortgages.

Garner owned and operated Lexington-based Garner & Associates. Between 2012 and 2016, his company was paid for more than 700 appraisals, on homes being purchased or refinanced in numerous counties surrounding Lexington and Owensboro, Kentucky. In his guilty plea, acknowledged that, in a significant percentage of these appraisals, he falsely certified on federal appraisal forms that he had personally visited the property and conducted the appraisal.  In fact, had paid unlicensed individuals a small portion of the appraisal fee to perform the appraisals.

Senior U.S. District Court Judge Joseph M. Hood sentenced Garner. Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, and Amy S. Hess, Special Agent in Charge, Federal Bureau of Investigation, Louisville Field Office, announced the sentence today.

The Louisville Division of the Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Ken Taylor and Kate Anderson represented the federal government

Mahendra Prasad, 55, Fremont, California, was sentenced by to 15 months in prison and ordered to pay $328,000 in restitution for his role in a mortgage fraud scheme.

On May 22, 2017, Prasad pleaded guilty to one count of mail fraud affecting a financial institution. Co-defendants Jyoteshna Karan, Praveen Singh, Sunita Singh and Nani Isaac are scheduled for a jury trial in U.S. District Court in Fresno, California, on Monday, December 11, 2017.

According to court documents, in 2006, Prasad caused loan application packages that contained false statements to be submitted to a mortgage lender in order to buy a property in Sacramento. The false statements included statements concerning Prasad’s employer, income, and purported intention to occupy the property as his primary residence. Following his fraudulent purchase, Prasad, with the assistance of others, rented the property as Section 8 housing and collected rents. Prasad did not reside in or occupy the property as his primary residence.

In 2013, Prasad applied to a bank to sell the property to another person at a loss to the bank. He falsely claimed to the bank that the “short” sale was an “arm’s length” transaction, and that neither he nor the buyer were related by commercial enterprise. Prasad’s conduct caused a loss to a financial institution of approximately $328,000.

Prasad was sentenced by U.S. District Judge Lawrence J. O’Neill.  The sentence was announced by U.S. Attorney Phillip A. Talbert.  The case was the product of an investigation by the Federal Bureau of Investigation, the Stanislaus County District Attorney’s Office, the Federal Housing Finance Agency Office of Inspector General, and the Federal Deposit Insurance Corporation Office of Inspector General, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. Assistant U.S. Attorneys Henry Z. Carbajal III and Christopher D. Baker are prosecuting the case.

 

 

Lori Lynn Andrew, 48, Cashmere, Washington, the owner of Hartman Escrow, Inc., a now defunct real estate escrow firm, was indicted by a federal grand jury on ten counts of bank fraud, and one count each of mail and wire fraud.  The Washington State Department of Financial Institutions arranged for a receiver to take over the Tukwila, Washington escrow company in 2012 after finding evidence of fraud. Andrew had her license to act as an escrow agent suspended in 2013 and her license has since been revoked.

According to the indictment, beginning in about January 2011, and continuing until July 2012, Andrew used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions. Andrew made, or had others make, false settlement statements on the transactions listing false or inflated fees and charges to hide the fact that she was embezzling money. Andrew forged signatures on various statements and created false invoices, statements and bills; she altered and deposited checks to her company account that should have gone to others; she took funds from her trust account and transferred them to her personal account for her own use. Andrew used the money for casino payments, credit card bills and other personal expenses. Andrew defrauded individual customers as well as Bank of America, Wells Fargo, Citi Bank, Chase and GMAC.

In all the indictment alleges Andrew defrauded the financial institutions and other customers of approximately $2 million.

Each count of bank, mail or wire fraud is punishable by up to 30 years in prison and a fine of up to $1 million.

The indictment was announced by U.S. Attorney Annette L. Hayes. The case was investigated by the Washington State Department of Financial Institutions, the FBI, the Postal Inspection Service (USPIS) and the Housing and Urban Development Office of Inspector General (HUD-OIG).

The case is being prosecuted by Special Assistant United States Attorney Hugo Torres and Assistant United States Attorney Norman Barbosa. Mr. Torres is a Senior King County Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.

Jeffrey Halpern, 62, Hewlett, New York, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of wire fraud. Halpern was the sole proprietor of a purported loan modification consulting company and admitted that he fraudulently billed clients more than $400,000 for services that were never performed,

According to documents filed in the case and statements made in court:

Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of over $400,000.

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his plea agreement, Halpern must also pay restitution to the victims. Sentencing is scheduled for November 22, 2017.

Acting U.S. Attorney William E. Fitzpatrick announced the guilty plea and credited investigators with the U.S. Attorney’s Office and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Special Agent in Charge Steven Perez; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.

The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark. Defense counsel is Mitchell C. Elman Esq., Port Washington, New York

Robert Jacobsen, 69, formerly of Lafayette, California, pleaded guilty to wire fraud and money laundering charges in connection with a scheme to use sham companies and collusive lawsuits to create the appearance that mortgage liens had been invalidated. The plea was accepted by the Honorable Maxine M. Chesney, U.S. District Judge.

According to the plea agreement, Jacobsen admitted that from October 2012 through October 2013, he executed a scheme to sell homes to buyers who were duped into believing that the homes had clear title.  Jacobsen admitted that he identified homes with mortgage deeds of trust that were recorded for the benefit of an entity called “American Brokers Conduit” (ABC).  Jacobsen also admitted that he registered a separate entity in New York called “American Brokers Conduit Corporation” (ABC Corp.).  Jacobsen then hired an attorney to file lawsuits against his phony ABC Corp., claiming that mortgages that had been originated by the real ABC were invalid.  Controlling both sides of the lawsuits, Jacobsen caused the attorneys to enter into stipulated judgments, agreeing that the mortgage deeds of trust were invalid.  The courts then entered judgment based on these fraudulent agreements, which Jacobsen recorded with county recorder’s offices.  The result created the impression that the deeds of trust had been legitimately invalidated by federal or state courts.

Jacobsen admitted that two homes that were the subjects of such lawsuits were in Danville, California, and San Francisco, California.  Jacobsen admitted that, after obtaining fraudulent judgments, he sold the Danville home for $540,000 and the San Francisco home for $1.2 million.  Jacobsen admitted that in both cases, his representations regarding the fraudulent court judgments had a natural tendency to influence the buyers to purchase the homes.

As part of his plea agreement, Jacobsen further admitted that proceeds from the sale of the Danville and San Francisco homes were used to pay for a 54’ Hylas sailboat that the government seized at a marina in Beaufort, North Carolina on November 18, 2015.  Jacobsen agreed that his interest in this sailboat was subject to forfeiture.

On December 5, 2015, a federal grand jury indicted Jacobsen charging him with 13 counts of wire fraud, in violation of 18 U.S.C. § 1343 and 9 counts of engaging in monetary transactions in property derived from specified unlawful activity (money laundering), in violation of 18 U.S.C. § 1957.  Pursuant to the plea agreement, Jacobsen pleaded guilty to one count of each crime.

Jacobsen’s sentencing is scheduled for November 15, 2017.  Jacobsen faces a maximum sentence of 20 years of imprisonment, and a fine of $250,000, plus restitution, for the wire fraud count and a maximum sentence of 10 years of imprisonment, and a fine of $250,000, for the money laundering count.

The plea was announced by United States Attorney Brian J. Stretch, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.  Assistant United States Attorneys Benjamin Kingsley, Meredith Osborn, and Gregg Lowder are prosecuting the case with the assistance of Beth Margen and Bridget Kilkenny.  The prosecution is the result of an investigation by the FBI and IRS-CI.

Robert O. Moore, 68, Albuquerque, New Mexico, was sentenced in federal court for his bank fraud conviction. Moore was sentenced to a 27-month term of imprisonment followed by three years of supervised release. Moore also was ordered to pay $150,535.10 in restitution to the victim of his criminal conduct.

On April 26, 2016, a federal grand jury filed an indictment charging Moore, a licensed real estate broker, with bank fraud and aggravated identity theft. According to the indictment, between April 2014 and September 2014, Moore perpetuated a scheme to defraud a loan and finance business that was involved in real estate closings and settlement out of more than $150,000, and facilitated the scheme by using the identification of another person.

On November 10, 2016, Moore entered a guilty plea to a felony information charging him with bank fraud. In entering the guilty plea, Moore admitted fraudulently transferring the ownership of a house that he was leasing to himself by presenting fraudulent documents to a financial institution so that he could obtain a mortgage against the house. Moore admitted that he used the name of an actual person as the notary public on the warranty deed without authorization.

The case was investigated by the Albuquerque office of the FBI and was prosecuted by Assistant U.S. Attorney Nicholas Jon Ganjei.

Dustin M. Lewis, 42, Henderson, Nevada and Brian Sorensen, 49, Las Vegas, Nevada, were each charged with one count of conspiracy to commit bank fraud and one count of bank fraud arising from a real estate scheme. If convicted, Lewis and Sorenson each face a statutory maximum penalty of 30 years in prison and up to a $1,000,000 fine.

According to allegations made in the indictment, from about August 15, 2011 to about January 17, 2014, Lewis and Sorensen conspired with each other to defraud OneWest Bank. The defendants allegedly devised and executed a scheme to avoid foreclosure so that Lewis could retain ownership of a 5,331 square foot, five-bedroom Henderson, Nevada home. As part of the scheme, Lewis submitted a fraudulent short sale application to the bank, which induced the bank to allow Lewis to sell the property to Sorensen’s family member for much less than Lewis owed under the existing mortgage loan. It is further alleged that Lewis did not disclose that he and Sorensen agreed that Lewis would continue to reside at the property and Sorensen would later cause the property to be sold back to Lewis free of the bank’s mortgage loan. It is further alleged that on or about July 21, 2017, Lewis then listed the property for sale at a price of $1,195,000.

Acting U.S. Attorney Steve W. Myhre for the District of Nevada made the announcement.  The case is being investigated by the FBI, the IRS-Criminal Investigation, with assistance from the U.S. Department of Interior-Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorney Patrick Burns.