Eleven defendants have been indicted for a mortgage fraud scheme that resulted in the issuance of thirteen fraudulent mortgage loans, totaling approximately $4,728,000: Those indicted were:
Juan A. Garcia, Miami, Florida;
Yenisley Acosta, Miami, Florida;
Juan J. Garcia, Hialeah, Florida;
Omar Alfonso, Hialeah Gardens, Florida;
Yurima Espinosa, Miami, Florida;
Yolanda Gomez, Hialeah Gardens, Florida;
Ulises Avila, Miami, Florida;
Luis Cordero, Miami, Florida;
Julissa Amaral, Miami, Florida;
Roberto Portilla, Miami, Florida; and
Eugenio Garcia, Miami, Florida.
Ten of the eleven defendants were arrested on Thursday, March 26, 2009 and had their initial appearances on Thursday and Friday, March 26 and 27, 2009. Defendant Julissa Amaral remains at large.
According to the twenty-four count Indictment, from August 2004 to September 2008, defendants Juan A. Garcia and Yenisley Acosta orchestrated 13 fraudulent residential sales involving six different properties in South Florida. Defendant Garcia and his co-conspirators recruited individuals to pose as actual buyers in the 13 transactions. These individuals, known as “straw buyers,” applied for loans using false information in their loan applications regarding employment, income, deposits and intent to occupy the property as a primary residence.
The Indictment alleges that at the closing of the 13 residential sales, defendants Garcia and Acosta paid the closing costs of the straw buyers, without reflecting these payments on the HUD-1 settlement statements. Thereafter, the conspirators would re-sell the properties to other straw buyers, each time significantly increasing the price of the properties. The multiple flip transactions were conducted in the same manner: the straw buyers applied for loan proceeds from lenders using false personal and financial information, and received a fee from defendants Juan A. Garcia and Yenisley Acosta. Juan A. Garcia and Yenisley Acosta would then divert the sale proceeds for their personal use. The straw buyers never lived in the property and never paid any closing costs or mortgage payments.
Several of the purchases were financed through FHA loans. One of the conditions of an FHA loan is that the buyer make a 3% equity investment in the home and that money, while it can be borrowed, cannot be obtained from the seller of the property. According to the Indictment, in certain of the thirteen residential property sales, defendants signed an Addendum to the HUD-1 settlement statement expressly certifying that, as seller, they were not in fact financing the buyer’s closing contributions, which was false. This addendum was sent to HUD by UPS as part of process of receiving FHA approval to guarantee the loans.
Once the loans were closed, five of the six properties went into foreclosure. As a guarantor of certain of the loans, HUD was required to take title to the property and reimburse the banks for their losses. The approximate aggregate losses related to the six properties is approximately $1,600,000.
The Indictment includes charges of conspiracy to commit wire fraud, substantive wire fraud, false statements to a federal agency, and false statements to HUD for the purpose of obtaining guaranteed commercial mortgage loans. The wire fraud offenses carry a statutory maximum sentence of 20 years’ imprisonment. The false statement charges carry a statutory maximum sentence of 5 years’ imprisonment for those alleging false statements to an agency within the Executive Branch and 2 years’ imprisonment for those alleging false statements to HUD.
This case was investigated by agencies participating in the Federal-State Mortgage Fraud Strike Force. R. Alexander Acosta, United States Attorney for the Southern District of Florida commended the investigative efforts of the Mortgage Fraud Strike Force with particular commendation to the Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.