Developer Sent to Prison for Downpayment Fraud

Allison Tussey —  June 1, 2012 — 1 Comment

Richard Cartagena, 43, Oldsmar, Florida, was sentenced to 21 months in federal prison for mortgage fraud conspiracy. Cartagena was one of the developers of La Encantada Villas, a development consisting of seven townhomes located on Watrous Avenue, Tampa, Florida.

According to court documents, Cartagena was one of the developers of La Encantada Villas from May 2007 through July 2008. He later purchased one of the townhomes himself. Cartagena was aware of fraudulent mortgage practices in connection with at least two of the townhome purchasers. The fraudulent practices included payments received for down payments and later returned, and other misrepresentations.

These material misrepresentations allowed these purchasers, and ultimately the developers as sellers, to borrow money to close loans for properties that they could not afford. The misrepresentations also induced lenders to disburse funds for the loans based on misrepresentations as to the equity in these properties.

The townhomes were sold at prices ranging from $600,000 to $900,000 and have since been foreclosed by the lenders, with foreclosure sales prices ranging from $255,00 to $340,000. Misrepresentations and mortgage fraud conducted in connection with two of Cartagena‘s former residences located on Mobbley Bay Drive and Woodley Road, Tampa, Florida, were also considered as part of the mortgage fraud conspiracy.

On March 5, 2012, United States District Judge Steven D. Merryday sentenced Neil Ferrigno, 49, Tampa, Florida, the minority partner in the development. Ferrigno was sentenced to eight months in federal prison for conspiring to commit mortgage fraud. Two purchasers of townhomes at La Encantada development were each previously sentenced to nine months’ imprisonment. The court ordered each individual in this case to make restitution payments to victim lenders in an amount totaling more than $2 million. In addition, the court forfeited all traceable monetary proceeds received by each individual.

This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.

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Allison Tussey

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One response to Developer Sent to Prison for Downpayment Fraud

  1. The Man is a crook and deserves what he got and more!!!

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