Thursday, July 16, 2009
12 Charged in 6 Mortgage Fraud Schemes
12 individuals have been charged in United States District Court in Pittsburgh, Pennsylvania, in connection with six separate mortgage fraud schemes:
John L. Chaffo, Jr., 49, Murrysville, Pennsylvania; Michael Dokmanovich, 36, Bethel Park, Pennsylvania; and Bernardo Katz, 49, Mt. Lebanon, Pennsylvania, have been charged in a 15‑count Superseding Indictment with Wire Fraud, Wire Fraud Conspiracy and Bank Fraud.
According to the Superseding Indictment, Dokmanovich, who was a licensed mortgage broker, and Chaffo, who was an attorney, participated in two different mortgage fraud conspiracies involving the submission of fraudulent loan applications and other documents, including appraisals, in connection with loan applications. The Superseding Indictment also alleges that Bernardo Katz participated in one of those conspiracies.
The law provides for a maximum total sentence of 260 years in prison, a fine of $3,250,000, or both for Chaffo; 210 years in prison, a fine of $3,250,000, or both for Dokmanovich; and 130 years in prison, a fine of $2,250,000, or both for Katz.
Nicholas DeRosa, 64, New Castle, Pennsylvania, and Anthony J. Staph, Jr., 43, also of New Castle, have been charged in a four‑count Superseding Indictment with Bank Fraud, Mail Fraud, and Money Laundering Conspiracy, and with Bank Fraud.
According to the Superseding Indictment, DeRosa participated in a bank fraud scheme, and in a similar mail fraud scheme, in which he arranged for Affordable Housing of Lawrence County (AHLC) to purchase properties at prices in excess of their fair market values. The Superseding Indictment alleges that DeRosa caused the preparation and execution of fraudulent sales agreements related to properties that AHLC intended to purchase in that the sales agreements failed to disclose that some of the sellers intended to kick back to DeRosa money after the closing. The Superseding Indictment also alleges that Staph, who was an appraiser, prepared appraisals for properties that were to serve as collateral for AHLC's loan from First Commonwealth Bank that he then knew were false and fraudulent in that they contained misrepresentations related to the value of the properties, the condition of the properties, and whether the properties were occupied.
The Superseding Indictment also alleges that DeRosa participated in a money laundering conspiracy in which a seller of one of the properties withdrew $5,000 in cash from a bank account to pay DeRosa a kickback, that some of the kickback funds were deposited into a bank account of an individual known to the grand jury, and then withdrawals were made from that account via checks made payable to an entity known to the grand jury.
The law provides for a maximum total sentence of 50 years in prison, a fine of $2,000,000, or both for DeRosa, and thirty 30 years in prison, a fine a $1,000,000, or both for Staph.
The United States Attorney filed a related, one‑count Bill of Information charging Robert Ratkovich, 40, New Castle, Pennsylvania, with one count of Bank and Mail Fraud Conspiracy and one count of Money Laundering Conspiracy.
According to the Information, Affordable Housing of Lawrence County (AHLC) hired Ratkovich to provide consulting services related to the purchase of seven properties all of which were owned or associated with an individual known to the United States Attorney. The Information alleges that Ratkovich provided false information to First Commonwealth Bank in connection with a loan that was used to purchase the seven properties and caused AHLC to purchase the properties in excess of their fair market values.
The law provides for a maximum total sentence of 40 years in prison, a fine of $750,000, or both for Ratkovich. Senior United States District Judge Gustave Diamond will schedule a date for Ratkovich to enter a guilty plea.
A five‑count Superseding Indictment charges Colleen Chiavetta, 36, and John Chiavetta, 70, both of McKees Rocks, Pennsylvania, with Wire Fraud Conspiracy, Money Laundering Conspiracy, and Tax Evasion in connection with a mortgage fraud scheme.
According to the Superseding Indictment presented to the Court, Colleen Chiavetta and another individual operated People's Home Mortgage that assisted individuals to obtain loans collateralized by real estate. Colleen Chiavetta and other individuals allegedly submitted fraudulent loan applications and supporting documents that overstated the financial condition of the borrowers, including their income and assets. The supporting documents also overstated the true sales prices of the properties and included appraisals that overstated the true value of the properties. Some of the fraudulent loan applications were submitted on behalf of John Chiavetta.
The Superseding Indictment further alleges that Colleen Chiavetta participated in a money laundering conspiracy that used the proceeds of the mortgage fraud scheme to further that fraud and to conceal the proceeds of that fraud. In addition, the Superseding Indictment charges Colleen Chiavetta with tax evasion, and alleges that, among other things, Colleen Chiavetta failed to file her income tax returns for the 2004 through 2006 calender years.
The law provides for a maximum total sentence of 55 years in prison, a fine of $1,500,000, or both for Colleen Chiavetta, and 20 years in prison, a fine of $250,000, or both for John Chiavetta.
A one‑count Indictment charges David McCloskey, 44, Finleyville, Pennsylvania, with Wire Fraud Conspiracy in connection with a mortgage fraud scheme.
According to the Indictment presented to the Court, McCloskey was a mortgage broker who operated a mortgage broker firm called First Atlantic Financial. He allegedly participated in a conspiracy to present fraudulent appraisals to mortgage lenders. The appraisals were fraudulent in that they overstated the true fair market values of the properties that served as collateral for the loans, and represented that they were prepared by licensed appraisers, when they were really prepared by an unlicensed appraiser.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both for McCloskey.
In addition, the grand jury returned a one‑count Indictment charging Karen Atkison, 50, West Sunbury, Pennsylvania, with Wire Fraud Conspiracy in connection with a mortgage fraud scheme.
According to the Indictment presented to the Court, Atkisonwas employed by entities that closed real estate transactions. She allegedly participated in a conspiracy with a mortgage broker in which they submitted documents to lenders falsely representing that borrowers had made down payments in connection with the closings when, in fact, they had not made down payments. Rather, the Indictment alleges that Atkison, prior to the closings, forwarded funds to the mortgage broker, who converted those funds to cashier's checks or certified checks that the broker then brought to the closing. All of that was done to make it falsely appear to the lenders that the borrowers made down payments at the closings.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both for Atkison.
Finally, the United States Attorney filed separate, but related, one‑count Bills of Information charging Daniel W. O'Connor, 38, and Lawrence J. Kraynak, 40, both of Shaler, Pennsylvania, with Wire Fraud Conspiracy in connection with a mortgage fraud scheme.
The Bills of Information allege that O'Connor and Kraynak operated a mortgage broker company called Financial Freedom Mortgagethat assisted borrowers in obtaining loans collateralized by real estate. Each defendant participated in a conspiracy to defraud lenders by submitting to the lenders appraisals knowing that the appraisals vastly overstated the true fair market values of real estate that served as collateral for the loans. The appraisals were prepared by Kenneth Cowden, who was not licensed to prepare appraisals, who has pleaded guilty to similar charges, and who is awaiting sentencing. O'Connor and Kraynak are alleged to have submitted Cowden's appraisals under the name of licensed appraisers as if they had been prepared by the licensed appraisers.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both for O'Connor and Kraynak. United States District Judge Joy Flowers Conti will schedule dates for both O'Connor and Kraynak to enter guilty pleas.
Mary Beth Buchanan, United States Attorney for the Western District of Pennsylvania, made the announcement.
In all cases an Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
mortgage fraud
Its good that these people are gettig punishments for their wrong activities. I still thing that changes would be more strict.
Posted by on 07/17 at 12:23 AM
Its good that these people are gettig punishments for their wrong activities. I still thing that changes would be more strict.
<a > Hillsborough homes for sale </a>
Posted by on 07/17 at 12:25 AM
Guilty people should be punished. Not everyone on this list is guilty. This is a modern day witch hunt to find blame for the real estate collapse and to make this US Attorney look good for reappointment.
Posted by on 07/23 at 07:50 AM
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Mortgage Fraud Risk Index Jumps 11 Percent, According to Verisk Analytics Subsidiary Interthinx
CNNMoney.com
The report...indicates that the overall Interthinx Mortgage Fraud Risk Index surged more than 11 percent from the previous quarter...
Mortgage Fraud Case Appears Headed to Jury in Jackson County Circuit Court
The Jackson Citizen Patriot - MLive.com
The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.
Wyoming Woman Charged with Mortgage Fraud After Allegedly Stealing Sister's Identity
MLive.com
A Wyoming woman is facing felony charges accusing her of stealing her sister's identity to obtain a mortgage...then defaulting on that mortgage, leaving taxpayers on the hook.
U.S. Attorney Targets White-Collar Crime
Wall Street Journal
In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.
Arrests Made in Orlando Mortgage Fraud Roundup
MyFoxOrlando.com
During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.
10 Accused of Mortgage Fraud at PR Coastal Resort
Forbes
A developer and nine other people, including a former salsa singer, have been charged in an alleged $14 million mortgage fraud in Puerto Rico...
Strodtman Jury Selected in Mortgage Fraud Trial
Greeley Tribune
Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.
FHA Digging Out After Loans Sour
Wall Street Journal
Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...
Mortgage Fraud Probe Nets 105 Across State
Bradenton Herald
At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.
Mortgage Fraud Increases
MortgageRates.co.nz
The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
