Archives For Mortgage Fraud

Penny Bradley, 54, New York, New York, a real estate developer, was indicted today for residential mortgage fraud in which Bradley forged member signatures to illegally obtain millions of dollars. Bradley is charged with Residential Mortgage Fraud in the First Degree, Grand Larceny in the Second Degree, and two counts of Forgery in the Second Degree and Criminal Possession of a Forged Instrument in the Second Degree.

According to the indictment and documents filed in court, from 2014 to 2016, Bradley violated her duties as the managing member of 46 East 82nd Street LLC and stole company funds for personal expenses and unrelated business ventures. Bradley also used company property as collateral to obtain a loan for unrelated real estate investments, and forged member signatures to refinance debt encumbering the townhouse.

In March 2014, 46 East 82nd Street LLC was formed to acquire, renovate, and sell a townhouse located at 46 East 82nd Street. Bradley was the sole member of Norfolk Street Management LLC, the managing member of 46 East 82nd Street LLC. In that capacity, Bradley was solely responsible for managing the renovation and potential sale of the townhouse and safeguarding company money and property, including funds invested by members of 46 East 82nd Street LLC and two loans from Alpine Capital Bank.

Between 2014 to 2016, Bradley stole over $500,000 from 46 East 82nd Street LLC to pay for personal expenses and unrelated business debts. Personal expenditures included rent payments, vacations, monthly payments on her auto loan for her Range Rover, and monthly parking garage fees.

In 2015, Bradley obtained a personal loan from Global Payment Services Limited (“GPS”) to invest in unrelated real estate projects. To procure the loan, Bradley agreed to allow GPS to record a lien against the 46 East 82nd Street townhouse if she failed to pay $2.6 million by its maturity date. Subsequently, Bradley defaulted on the loan and GPS recorded a mortgage against the townhouse.

In 2016, Bradley attempted to refinance the GPS mortgage by encumbering the townhouse with a junior mortgage from Atlas Union Corp (“Atlas”). Atlas and First American Title Insurance Company (“First American”), the title insurance company insuring the loan, required the defendant to obtain a new company operating agreement executed by all the members of the company. In August 2016, Bradley falsely claimed that all the members were contacted and requested to close on the Atlas loan without submitting the new operating agreement; Atlas denied the defendant’s request.

Thereafter, in late August 2016, Atlas agreed to refinance the existing loans from both Alpine and GPS with a loan for $11.5 million to 46 East 82nd Street LLC. However, to obtain this loan, Atlas required the defendant to get written consent of a majority in interest of members of 46 East 82nd Street LLC.

In September 7, 2016, the defendant emailed her attorney the “Consent of Majority in Interest of Members of 46 East 82nd Street LLC” and its six signatures pages for purposes of closing on the Atlas loan. The signature pages included forged signatures of two LLC members. Two days later, on September 9, 2016, the defendant signed the required documents on behalf of 46 East 82nd Street LLC and certified as to the validity of the signatures on the Consent of Majority in Interest of Members of 46 East 82nd Street LLC document to close on the Atlas loan of $11.5 million.

In December 2017, the Atlas loan matured and 46 East 82nd Street LLC defaulted on the loan.

Bradley has been charged with

  • Residential Mortgage Fraud in the First Degree, a class B felony, 1 count
  • Grand Larceny in the Second Degree, a class C felony, 1 count
  • Forgery in the Second Degree, a class D felony, 2 counts

Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, 2 counts

The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court, including the indictments, and statements made on the record in court.

Manhattan District Attorney Cyrus R. Vance, Jr. made the announcement.

As alleged, Penny Bradley cashed in on her insider position and stole company funds to support her lavish lifestyle,” said Manhattan D.A. Cy Vance, Jr. “My Office is dedicated to protecting the integrity of our City’s residential mortgage market and holding those who attempt to undermine it criminally responsible.

Assistant D.A. Jaime Hickey-Mendoza is handling the prosecution of this case under the supervision of Assistant D.A.s Judy Salwen, Principal Deputy Chief of the Rackets Bureau; Michael Ohm, Deputy Bureau Chief and Jodie Kane, Chief of the Rackets Bureau, as well as Executive Assistant D.A. Michael Sachs, Chief of the Investigation Division. Supervising Financial Investigator Wei Man Tang assisted with the investigation, under the supervision of Irene Serrapica, Deputy Chief of FAFI, and Robert Demarest, Chief of FAFI. Supervising Rackets Investigator Donato Siciliano, Rackets Investigator Samuel Morales, and paralegals Madeleine Lippey and Maximilian Perkins also assisted with the case.

 

Jorge Flores, 48, Oakdale, New York; Joseph A. Gonzalez, 45, Henderson, Nevada; and Jose L. Piedrahita, 57, and Yorce Yotagri, 52, both of Freeport, New York, have been indicted for carrying out a scheme to use phony information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit (HELOCs).

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

From 2010 through 2018, Flores and Simon Curanaj, a real estate broker in the Bronx, New Yourk who has previously pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.

For instance, Gonzalez and Flores used a property in Jersey City, New Jersey, as part of the scheme. Gonzalez had been allowed to live at the property by the owner in exchange for management services, but neither he nor Flores owned the property. Gonzalez also recruited an individual with good credit to act as a straw buyer (Individual 1). Later, unbeknownst to the owner of the property, a “quitclaim” deed – a deed which contains no warranties of title – was prepared transferring the property to Individual 1. The signatures on the deed were forged.

Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City property as collateral in Individual 1’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Individual1’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the property was less than the amount of the HELOC loans for which Gonzalez and Flores applied.

The victim banks eventually issued loans to Individual 1 in excess of $500,000. After the victim banks funded the HELOCs and deposited money into Individual 1’s bank account, Individual 1 disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Individual 1 eventually defaulted on both HELOC loans.

In another example, Flores, Piedrahita, and Yotagri used a property in Freeport, New York, to carry out a similar scheme.

Each defendant is charged by indictment with one count of conspiracy to commit bank fraud. Flores and Gonzalez are also charged with two substantive counts of bank fraud. Yotagri was arraigned July 8, 2019, before U.S. District Judge John Michael Vazquez in Newark federal court. Flores and Piedrahita remain at large. Gonzalez will be arraigned at a date to be determined.

The conspiracy to commit bank fraud and substantive bank fraud counts carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross pecuniary gain to the defendants or twice the gross pecuniary loss to others, whichever is greater.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the U.S. Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presume innocent unless and until proven guilty.

 

Min Jin Zhao, a/k/a Michael Zhao, a/k/a Michael West, 56, San Francisco, California, a real estate agent has been indicted on charges of wire fraud, mail fraud, and money laundering.

According to the indictment filed May 9, 2019, and unsealed today, Zhao, defrauded his clients out of down payments meant for the purchase of homes in and around the Bay Area.  From 2014 through 2015, Zhao misrepresented to prospective homebuyers and investors that Portfolio Consulting, Inc., offered a loan program that would enable his clients to procure financing to make all-cash offers on real property.  Zhao told his victims that, as part of the loan program, they had to wire, transfer, or deposit 10% to 20% of the sale price of the real property they sought to purchase into Portfolio’s bank account.  According to the indictment, Zhao told his clients that once they delivered their funds to Portfolio, the company then would provide the remaining portion of the purchase price.  In reality, however, after Zhao’s victims deposited their funds into Portfolio’s account, Zhao either spent the funds or transferred the funds to another bank account in Portfolio’s name.  Further, Zhao used the funds to make purchases unrelated to the purchase of real property for the victims, including for purchases for Zhao’s benefit and the benefit of businesses he controlled.  In sum, Zhao is charged with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of money laundering, in violation of 18 U.S.C. § 1957.

Zhao was arrested in San Francisco, California on July 2, 2019, and made his initial federal court appearance this morning in Oakland, California.  Zhao is currently out on bond.  His next scheduled appearance is on September 11, 2019, at 10:30 a.m., for an initial appearance before the Honorable James Donato, U.S. District Judge.

The announcement was made by United States Attorney David L. Anderson; Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter; and Federal Bureau of Investigation (FBI) Special Agent In Charge John F. Bennett.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Zhao faces a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution for each violation of wire and mail fraud, as well as 10 years in prison and a fine of $250,000, plus restitution for the money laundering count.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Jose Apolinar Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Katie Turner.  The prosecution is the result of an investigation by the IRS-CI and the FBI.

 

Phillip Yoder, 41, Ligonier, Indiana, was sentenced on his guilty pleas to wire fraud, bank fraud, mail fraud and bankruptcy fraud.

According to his plea agreement, beginning in or about 2014 and continuing until in or about July 2015, Yoder and others, sometimes working through the entity, KOH Enterprises, LLC, defrauded persons via a “Foreclosure Rescue Scheme.” As part of the scheme to defraud, Yoder and others monitored foreclosure notices of properties, and would then approach distressed homeowners and convince them to transfer title of the property in exchange for false promises of being able to avoid further foreclosure obligations. They falsely represented to these homeowners that they would handle their mortgage arrearages and the foreclosure process.  Because of these false representations, the homeowners vacated the property and transferred their interest in the property through a Quitclaim deed to business entities. Those entities then furthered the scheme by recording the Quitclaim at the local Recorder’s Office. However, the Quitclaim deed did not extinguish the homeowner’s outstanding mortgage debt.  Yoder and others would use the mail to send a fraudulent document, entitled an “International Promissory Note”, purporting to satisfy the outstanding mortgage debt to the financial institution holding the mortgage.  Simultaneously, Yoder and others would cause a fraudulent “Satisfaction of Mortgage” to be filed with the county recorder’s office in an attempt to discharge the mortgage.  They would then convey another Quitclaim deed to an investor or purchaser of the properties, even though the property was still encumbered.   The total loss to investors and insurers was $1,466,136.20.

With regard to the bankruptcy fraud, which resulted from a referral by the U.S. Trustee for Region 10, according to his plea agreement, on or about February 24, 2016, Yoder knowingly and fraudulently made a material false declaration, certificate and verification under the penalty of perjury in his bankruptcy proceeding.  He claimed as an asset a “Billion dollar gold bond” when he knew that the purported bond was fraudulent and worthless.  In his bankruptcy proceeding, Yoder claim $792,592.46 in debts.

Yoder was sentenced to serve 87 months each on the mail fraud, bank fraud, and mail fraud counts, and 60 months on the bankruptcy fraud count, all to run concurrently.   Yoder also was sentenced to two years of supervised release and ordered to pay a total of $581,386.04 in restitution.

The announcement was made by U.S. Attorney Kirsch.

Creating a scheme that enriches the defendant while defrauding banks, insurers and average home owners, jeopardizes our financial system,” said U.S. Attorney Kirsch.  “My Office in coordination with all our law enforcement partners will continue to aggressively prosecute these type of cases.

Everyone has the right to expect honest representation from those they do business with.  Targeting homeowners with this type of fraudulent activity when they are already dealing with financial hardship is not only illegal but a violation of trust and won’t be tolerated by the FBI,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division.  “The FBI and our law enforcement partners will continue to investigate and pursue those who try to line their pockets at the expense of others and hold them accountable.”

HUD Special Agent in Charge Geary stated, “At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those resources are completely dedicated to those in need. The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Single Family housing programs.

Today’s sentence sends a strong message to those who abuse the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Indiana and Southern and Central Illinois (Region 10).  “Providing false documents such as fictitious “bonds” to the United States Bankruptcy Court undermines the integrity of the system and will not be tolerated.  We appreciate the commitment of U.S. Attorney Kirsch and our law enforcement partners to holding those who abuse the bankruptcy system accountable.  We welcome information that will help detect fraud and abuse in the bankruptcy system and we encourage citizens to report suspected bankruptcy fraud through our Internet hotline at USTP.Bankruptcy.Fraud@usdoj.gov.”   The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development’s Office of Inspector General in collaboration with the Northern Indiana Bankruptcy Fraud Working Group coordinated by the U.S. Trustee.  The case was handled by Assistant U.S. Attorney John M. Maciejczyk.

 

Christopher Coburn, 34, Winter Garden, Florida has been found guilty of five counts of bankruptcy fraud and two counts of falsification of records in a bankruptcy proceeding.

According to testimony and evidence presented at trial, Coburn solicited homeowners whose mortgages were in default and offered to rescue their homes from foreclosure. In order to prevent the Federal National Mortgage Association (“Fannie Mae”) and multiple financial institutions holding mortgages from lawfully foreclosing on homeowners’ properties, Coburn engaged a bankruptcy fraud scheme in which he filed or caused to be filed fraudulent bankruptcy petitions in the name of the homeowner, without homeowner’s knowledge or consent, just prior to the scheduled foreclosure sale dates. These fraudulent bankruptcies invoked the automatic stay provision of the bankruptcy code, preventing Fannie Mae and the financial institutions from conducting lawful foreclosure sales and obtaining title to the property. The fraudulent bankruptcy petitions filed by Coburn enabled him to collect fees and allowed him to refer the properties to real estate agents in order to obtain ill-gotten commissions for short-sales. Coburn also filed other false and fraudulent bankruptcy forms in the names of some homeowners relied on by the Office of the United States Trustee and the United States Bankruptcy Court for the Middle District of Florida. http://www.mortgagefraudblog.com/?s=Christopher+Coburn

Coburn faces a maximum penalty of 5 years’ imprisonment for each bankruptcy fraud count and up to 20 years in prison for each falsification of records count. His sentencing hearing has been scheduled for September 9, 2019.

United States Attorney Maria Chapa Lopez made the announcement.

This case was investigated by the Federal Housing Finance Agency—Office of Inspector General, with substantial assistance from the Office of the United States Trustee for the Middle District of Florida. It is being prosecuted by Special Assistant United States Attorney Chris Poor.

Anthony Garvin, 49, Jersey City, New Jersey was charged in a superseding indictment returned June 25, 2019 for his role in running a large-scale mortgage fraud scheme that involved properties in Jersey City, Union, and elsewhere in New Jersey and caused losses of millions of dollars.

According to the documents filed in this case:

From January 2011 through November 2017, Garvin and others engineered fraudulent short sale “flips” of various New Jersey properties with mortgages that were in default, and also fraudulently obtained numerous home equity lines of credit, or “HELOC” loans, using fraudulent documents and information.

The conspirators allegedly arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.

In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. The second transaction frequently closed for significantly more or even double the price of the first transaction.

Garvin and others allegedly rigged the short sale process at each step to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud. The conspirators used various kinds of phony documents and misrepresentations, including generating false pre-approval letters from a New Jersey corporation controlled by a conspirator and generating phony deeds that backdated the closing date of the first transactions.

To obtain HELOC loans, the conspirators allegedly submitted loan applications in the name of straw borrowers, who did not in fact reside at the subject properties, and used false and fraudulent information – including false pay stubs and tax information – to make it appear as though the straw borrowers made more money than they actually did. The conspirators frequently applied for multiple HELOC loans on the same property nearly contemporaneously, withholding from each lender the existence of other applications.

The conspirators then disbursed the funds received from financial institutions – which totaled millions of dollars – into various accounts they controlled to conceal their illegal activities and split the profits.

The count of conspiracy to commit bank fraud and each substantive count of bank fraud are each punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.

Garvin was charged with one count of bank fraud conspiracy and five counts of bank fraud. Garvin was originally indicted on one count of bank fraud conspiracy and one count of bank fraud on January 11, 2019.

U.S. Attorney Craig Carpenito made the announcement today.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation leading to the superseding indictment.

The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater of the U.S. Attorney’s Office in Newark.

The charges and allegations in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Defense counsel: Murdoch Walker II Esq., Atlanta, Georgia; Charles D. Dawkins Jr. Esq., Elizabeth, New Jersey.

 

Lawrence Humphrey, 50, Brooklyn, New York, was sentenced today to five years in state prison for engaging in a fraudulent scheme in which he conspired with a woman to use bad checks to purchase three homes in New Jersey.

Humphrey was indicted in December 2016 along with his co-conspirator, Tara Stokes, 51, Flushing, New York, as the result of an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau. Stokes pleaded guilty to second-degree theft by deception and was sentenced on May 18, 2018 to four years in prison by Judge Smith. Humphrey was wanted as a fugitive in this case for two years.

The investigation revealed that Stokes and Humphrey presented checks drawn on a closed bank account to buy three homes in New Jersey. In each case, Stokes used the name “Tara Humphrey.” Two of the properties are located in Gloucester County, Greenwich Township and Monroe Township, and one is located in Winslow Township, Camden County, New Jersey. The closed bank account was in the name of a fictitious law firm, Law Offices of Tara Humphrey. Tara Stokes is not a lawyer.

Stokes and Humphrey wrote multiple bad checks for two of the properties, writing new checks when the first checks bounced. Three bad checks for $240,000 were written for the Monroe property, all from the account of the fictitious law firm. Bad checks for $296,639 and $299,139 were issued for the Greenwich property, with the second check being drawn on a different bank account, which was open but did not have sufficient funds. A bad check for $305,684 drawn on the law firm account was written for the Winslow property. Bad checks for $2,500 and $10,000 were also written from that account to pay deposits on the Greenwich and Winslow homes.

While titles for the three properties changed hands at the closings, in each case the fraud was quickly uncovered, and two of the deeds were not recorded. The state’s investigation began with a referral from a law firm representing the title company that handled the closing for the Monroe Township property.

Humphrey pleaded guilty on April 29, 2019 to a charge of second-degree theft by deception.

Attorney General Gurbir S. Grewal made the announcement.

Because of the large sums of money involved, real estate transactions and mortgage loans are a prime target for con artists, who impose major costs on the industry that are passed on to honest consumers,” said Attorney General Grewal. “By sending criminals like Humphrey and Stokes to prison, we deliver a strong deterrent message to others who might consider committing this type of fraud.

Financial fraud disrupts commerce and imposes major costs on individuals as well as businesses,” said Director Veronica Allende of the Division of Criminal Justice. “We are committed to fighting fraud by aggressively investigating and prosecuting white collar criminals like Humphrey and his co-conspirator, Stokes. I commend the attorneys, detectives, and staff in our Financial & Computer Crimes Bureau who ensured that both of these defendants received substantial prison sentences.”

Deputy Attorney General William N. Conlow was the lead prosecutor on the case, and Deputy Attorney General Derek Miller handled the sentencing for the Division of Criminal Justice Financial & Computer Crimes Bureau. Detective Richard Loufik was the lead detective for the Division of Criminal Justice.

Jacqueline Graham, 53, formerly of Levittown, Pennsylvania was convicted at trial on Wednesday, June 12, 2019, of participating in a conspiracy to commit bank fraud, wire fraud, and mail fraud in connection with a fraudulent debt-elimination scheme to defraud homeowners and banks.

According to the Indictment in the case and the evidence presented at trial:

From at least 2011 to at least 2012, Graham partnered with Bruce Lewis, 67, formerly of Alaska and Washington State and John Ruzza in operating the Valhalla, New York-based Terra Foundation (“Terra”) ,which was originally known as the Pillow Foundation, which held itself out as a business that would investigate and eliminate mortgage loans in exchange for fees, soliciting clients who were having difficulties making their mortgage payments.  In fact, however, Terra engaged in a wide-ranging scheme to defraud clients, county clerks’ offices, and banks.

The fraudulent scheme, which was created by Graham and Lewis, involved Terra performing “audits” of clients’ mortgages, sending pseudo-legal paperwork to the banks and/or lenders holding the mortgages, and ultimately filing purported mortgage discharges with the relevant county clerks’ offices, which discharges were signed by Lewis or other co-conspirators, claiming falsely to represent the banks and/or mortgage lenders.  As a result, anyone doing a title search for one of Terra’s clients would see that the client’s mortgage had been satisfied.  The mortgages had not, however, been discharged, and the mortgages were eventually reinstated, after the clients paid their fees.

In order to effectuate the scheme, Graham, Lewis, and Ruzza involved others, including Rocco Cermele, 56, Yonkers, New York , who was Terra’s director of operations and who recruited clients, among other duties; Paula Guadagno, who did real estate title work for, and filed discharges on behalf of, Terra; and Anthony Vigna, 61, Thornwood, New York,  a lawyer and CPA who worked in Terra’s offices.

To profit from their scheme, Graham and her co-conspirators charged various fees to Terra’s clients.

In total, Graham and her co-conspirators filed over 60 fraudulent discharges in Westchester and Putnam Counties in New York, and in Connecticut.  The fraudulent discharges claimed to discharge mortgages with a total loan principal of nearly $38 million.

Graham was convicted of one count of conspiracy to commit bank fraud, wire fraud, and mail fraud.  The count carries a maximum sentence of 30 years in prison.

Lewis pled guilty to one count of wire fraud relating to the Terra scheme, which carries a maximum sentence of 20 years in prison.

Vigna pled guilty to one count of participating in a conspiracy to commit bank fraud, wire fraud, and mail fraud relating to the Terra scheme, which carries a maximum sentence of five years in prison.

Cermele pled guilty to one count of participating in a conspiracy to commit mail, wire, and bank fraud, and one count of wire fraud, each relating to the Terra scheme, each of which carries a maximum potential sentence of 30 years in prison, and three additional counts of wire fraud relating to other crimes, each of which carries a maximum potential sentence of 20 years in prison.

Graham was found guilty of the one count she faced after a two-week trial before U.S. District Judge Nelson S. Román.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the court.

All defendants are awaiting sentencing.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, made the announcement.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Jacqueline Graham preyed on vulnerable homeowners who could not afford their mortgage payments during a time of crisis in the housing market.  Because of her greed, these homeowners ended up financially worse off than when they found her.  We will continue to work with our law enforcement partners to bring to justice those who victimize the vulnerable.”

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Berman also thanked the Office of the Westchester County District Attorney’s Office and the Department of Housing and Urban Development for their assistance in the case.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys David Felton, Michael Maimin, and James McMahon are in charge of the prosecutions.

John F. Iacono (also known under the alias Vito Yodice), 46, and Shpresa Gjekovic (also known under the aliases Hope Gjekovic, Hope Iacono, Hope Yodice, and Shpresa Hadzovic), 32 , were sentenced today for defrauding banks throughout New York State and laundering those criminal proceeds to further their scheme.

The co defendants were convicted for mortgage fraud, money laundering and scheme to defraud after a joint investigation by the Office of the Attorney General and the New York State Police revealed that the couple utilized shell companies, forged cashier’s checks, and provided fake bank statements, W2s, paystubs, and tax returns in order to solicit over $1.3 million in loans from multiple upstate New York banks.

According to the indictment and statements made by the prosecutor in court, between April 2016 and March 2017, Iacono and Gjekovic applied for mortgages, a construction loan, personal lines of credit, personal loans, a commercial loan, a debt consolidation loan, and a Home Equity Line of Credit with fraudulent documentation that overstated their income, assets, and source of funds. The couple also created fake entities, including but not limited to JF Iacono, LLC and Iacono, LLC, and purported to have worked for them for years. In reality, these companies were created just days prior to their submissions of applications for hundreds of thousands of dollars in bank funds.

The investigation also revealed that Iacono and Gjekovic supplied over $125,000 in counterfeit cashier’s checks to financial institutions, law firms, title companies, and the sellers of a Schoharie County, New York property in order to secure financing and establish residency in the area. The couple allegedly intended to turn the Schoharie County property into a swingers club, but instead rented it out as a hunting cabin while pretending to raise money for children in need. Utilizing online postings, including on Facebook and Airbnb, they advertised the rental property.

The defendants also created a false personal financial statement showing net worth in excess of $1.1 million, with cash on hand of $400,000, while their actual account balances were in the negative. The balances on these statements were grossly inflated, as the couple never had more than a few thousand dollars in the accounts – the vast majority of which was from other loans. To support their claims, Iacono and Gjekovic also supplied fake bank statements showing counterfeit assets.

In addition, Iacono and Gjekovic concealed outstanding judgments against them totaling in excess of $1.4 million from the financial institutions from which they tried to secure loans. Moreover, the couple laundered the fraudulently-obtained loan proceeds to fund real estate transactions, utilizing at least five financial institutions during the course of the year-long scheme. In total, the couple stole over $460,000 from three financial institutions, and attempted to steal over $860,000 in additional proceeds from five financial institutions.

In December 2018, both defendants were arrested on a 19-count indictment charging Residential Mortgage Fraud in the Second Degree, Grand Larceny in the Second and Third Degrees, Money Laundering in the Third Degree, Criminal Possession of a Forged Instrument, Falsifying Business Records in the First Degree, and Scheme to Defraud in the First Degree, among other charges.

On March 29, 2019, Iacono and Gjekovic pleaded guilty before Schoharie County Court Judge George R. Bartlett, III to Residential Mortgage Fraud in the Second Degree (a class C felony), Money Laundering in the Third Degree (a class D felony), and Scheme to Defraud in the First Degree (a class E felony). Iacono and Gjekovic’s pleas resolve additional alleged crimes of money laundering, grand larceny, forgery, and identity theft for which the defendants could have been charged in Albany, Delaware, Greene, Kings, Otsego, Queens, and Rensselaer Counties.

Attorney General Letitia James and State Police Superintendent Keith M. Corlett made the announcement.

Iacono and Gjekovic falsified document after document in order to pad their own pockets,” said Attorney General Letitia James. “Let this serve as a warning to all of those who try to carry out such deliberate schemes: There is no place in this state for individuals who try to cash in at the expense of hardworking New Yorkers. I thank the State Police for their bringing accountability and justice to this elaborate and deceitful plot.”

This couple knowingly defrauded financial institutions and businesses, and preyed on the public’s philanthropy, all to fill their pockets and satisfy their greed,” said New York State Police Superintendent Keith M. Corlett. “This sentencing brings justice and should remind those thinking of carrying out these types of schemes, that you will be held accountable. Thank you to the Attorney General’s Office, our State Police Financial Crimes Unit and other law enforcement partners for their hard work in exposing this plot.”

The case is being prosecuted as part of Attorney General James’ Combatting Upstate Financial Frauds and Schemes (“CUFFS”) Initiative, led by Assistant Attorney General Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative was created to assist local law enforcement and District Attorney’s Offices in the investigation and prosecution of complex financial crimes and money laundering cases such as this one.

Attorney General James thanks the New York State Police Financial Crimes Unit and State Police Bureau of Criminal Investigations, as well as Schoharie County District Attorney Susan J. Mallery for their valuable assistance on this investigation.

This case is being prosecuted by Assistant Attorney General Philip V. Apruzzese, with the assistance of Legal Support Analysts Kira M. Russom, Caitlin Carmody and Samantha Wintner and Supervising Analyst Paul Strocko. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo. The Criminal Division is led by Chief Deputy Attorney General José Maldonado.

The OAG investigation was conducted by Investigator Mark J. Terra, under the supervision of Supervising Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by First Deputy Chief Investigator John Reidy.

 

Yale Schiff, 44, Riverwoods, Illinois, a north suburban businessman has been indicted on Wednesday, on bank fraud and identity theft charges for allegedly fraudulently obtaining millions of dollars in mortgage and vehicle loans and using stolen identities to secure credit from financial institutions.

Schiff made false statements in loan applications to obtain mortgage loans secured by a variety of properties, according to an indictment returned in U.S. District Court in Chicago.  The charges allege that Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.

The identity theft charges pertain to Schiff’s alleged use of multiple fake and stolen identities to fraudulently obtain loans for vehicles, including a Jeep Grand Cherokee and a Lexus RX350.  The indictment accuses Schiff of submitting to the Recorder’s office fake letters from financial institutions and false releases of the vehicle liens, claiming that the loans were paid in full.  In reality, Schiff knew the letters were bogus and that the loans were not paid in full, the indictment states.  Schiff then allegedly sold the vehicles, keeping the proceeds without paying the loans.

Schiff also used stolen identities to obtain lines of credit and credit cards, including a charge card at Nordstrom department store that he used for personal use, the indictment states.  He then allegedly left large unpaid balances on the cards and the credit lines.

The charges allege that three of Schiff’s relatives and a business associate aided him in the schemes.  The indictment seeks forfeiture of a personal money judgment of approximately $4.7 million, as well as a property in Riverwoods.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory minimum sentence of two years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.