Closing Attorneys Admit Straw Buyer Scam

Allison Tussey —  September 10, 2012 — Leave a comment

Daniel Nathan Hoskins, 42, Orlando, Florida, and Alexander Zouzoulas, 56, Winter Park, Florida, have both pleaded guilty to conspiracy to commit bank and wire fraud. Hoskins, who is suspended from practicing law, pleaded guilty and Zouzoulas pleaded guilty on August 17, 2012. Both men face maximum penalties of five years in federal prison.

According to court documents, from March 2006 through October 2008, Hoskins and Zouzoulas were licensed to practice law in the state of Florida. Both men worked at Nate Hoskins, P.A. (NHPA), which had exclusive rights to conduct residential real estate closings for three local condominium conversion projects. Hoskins and Zouzoulas conspired with individuals involved in the development of the three condominium conversion projects, to artificially inflate the sales prices of the condominium units through the use of nominee purchasers.

Nominee purchasers, also known as straw buyers, obtained home loans on condominium units they had no intention of inhabiting. They were usually paid a sum of money for the use of their identities and credit scores. The straw buyers signed all of the documents required to purchase the condominium units, including forms falsely stating that the units would be their primary residences.

In furtherance of the scheme, numerous straw purchasers and real estate agents received cash back, or “kick-backs,” after the condominium units were sold. The illegal payments were disguised as “decorator’s allowances” or other miscellaneous charges on the closing statements. NHPA paid a 25% monthly fee to a co-conspirator involved with the development of the three condominium conversion projects for all of the closings done for units in the three developments. These payments were not disclosed on closing statements.

Both Hoskins and Zouzoulas allowed closings to occur on multiple condominium purchases, using a single straw buyer that reflected that the condominiums would be the buyer’s “primary residence,” even though Hoskins and Zouzoulas knew or should have known this was false. Both men scheduled closings on multiple condominium purchases by the same straw buyer in such a way to conceal from lenders the fact that the straw buyer had purchased multiple condominium units. The defendants also allowed payments to be made to shell companies that were established so that real estate agents could receive illegal kickbacks for participating in the scheme. Neither disclosed, to lenders, the existence of the kickbacks or the disguised payments to straw buyers and real estate agents.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. It is being prosecuted by the Assistant United States Attorney Daniel W. Eckhart.

Allison Tussey

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