Developer Admits Role in Illegal Flipping Scheme

Allison Tussey —  June 5, 2013 — Leave a comment

Joseph Daniele, 42, Tampa, Florida, pleaded guilty to conspiracy to commit wire fraud affecting a financial institution. Daniele faces a maximum penalty of thirty years in federal prison.

Daniele’s three co-conspirators, also real estate professionals, previously pleaded guilty for their roles in the conspiracy. Misty Rudd, a real estate agent, Michael Jordan, a mortgage broker, and Adam Ort, the owner of a title company owner, are currently awaiting sentencing.

According to the plea agreement, Daniele moved from Ohio to Florida in 2002. Directly and through a series of companies, he bought numerous houses, primarily in Pinellas County, for the purpose of flipping them. In total, the conspiracy involved approximately 400 mortgage transactions.

Rudd helped Daniele to flip the properties by soliciting investors to buy the houses. As a part of the scheme, Rudd and others claimed that these investments would require no money from investors to buy the houses. In reality, to obtain these loans, the lenders required the borrowers to contribute money toward the transactions.

In the documents submitted to the lenders, the banks were told that the borrowers were paying the down payments and funds-to-close. In fact, the conspirators concealed the actual source of the money from the banks.

In some cases, the borrower’s contribution was netted out of the transaction. That is, it was taken out of the money the seller (Daniele or his companies) was supposed to receive. This required the direct involvement of the title agents closing the loans. Most of the loans were closed by title companies run by Ort. In other cases, the borrower’s contribution was paid by a check from one of Daniele‘s companies. Frequently, the borrower’s contribution came from a company called Premiere Financial, a company run by Ort and Jordan. Premiere Financial would fund the borrower’s contribution and then, on the seller’s side of the transaction, the money would be paid back to Premiere Financial, along with a small fee. This concealed the fact, from lenders, that the borrower had not made a financial contribution to the deal.

In addition, mortgage brokers, including Jordan, facilitated the scheme by adding false information to the mortgage loan applications. Applications were falsified to make the borrowers appear to have the financial ability to make the down payment and qualify for loans which they could not really afford.

United States Attorney Robert E. O’Neill announced the guilty plea.

This case was investigated by FBI. It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.

Allison Tussey

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