Daniel Stephen, 43, Miramar, Florida, and Patricia De Pons, 53, Miami Shores, Florida, have been sentenced in connection with their participation in a fraud scheme to sell vacant land to more than 1,000 victims.
According to the indictment, various documents filed with the court and as previously reported on Mortgage Fraud Blog, this case arose out of the sale of land in various counties in North Florida and in Georgia by First Loan Solution, a company owned and operated by Daniel Stephen. Stephen falsely represented to the buyers that he owned the land that he was selling and that he would retain the buyers’ deposits in escrow accounts pending the closing of the transactions. Based upon these false representations, the prospective buyers agreed to enter into land sale contracts with First Loan Solution to purchase the land in one-acre increments and to make 50% down payment deposits on the land. In fact, however, and contrary to his representations, Stephen did not own the land. Stephen fraudulently diverted a significant portion of these buyers’ deposits to pay business expenses of First Loan Solution and for his personal enrichment. In this way, Daniel Stephen induced more than 1,000 persons to enter into contracts to purchase vacant land in North Florida.
Daniel Stephen hired a law firm to serve as the closing and escrow agent in the land sale transactions between the prospective buyers and First Loan Solution. Defendant Patricia De Pons was administrator of the title operation at the law firm assigned to handle these transactions. Despite knowing that Daniel Stephen had never purchased the land he was selling, Patricia De Pons conducted fraudulent closings purporting to transfer title of the land plots from First Loan Solution to the buyers. As part of the closing, De Pons demanded payment from the buyers of the balance purportedly owed on the land purchases. De Pons then sought to establish the legitimacy of these transactions by sending fabricated, unrecorded warranty deeds to the buyers. De Pons sent letters to the buyers representing that closings on their land had taken place and that a recorded copy of the warranty deed would be returned to the buyers upon receipt from the county where the land was located.
Ultimately, the buyers never received any lands nor any refunds of their purchase money. More than 1,000 victim buyers fell prey to this scheme, with total losses to the victims estimated at $10,600,000.
U.S. District Court Judge Jose E. Martinez sentenced defendant Daniel Stephen to 240 months in prison, to be followed by three years of supervised release. Defendant Patricia De Pons was sentenced to 151 months in prison, and three years supervised release. The judge also scheduled a hearing in July 2010, to determine the amount of restitution to be paid to the victims by the defendants. The defendants had pled guilty to one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, and J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulation made the announcement.
This case was investigated by agencies participating in the Federal-State Mortgage Fraud Strike Force. Mr. Ferrer commends the investigative efforts of the Mortgage Fraud Strike Force with particular commendation to the Federal Bureau of Investigation and the State of Florida Office of Financial Regulation. The case was prosecuted by Assistant U.S. Attorneys Peter A. Forand and Michael Sherwin.