Thursday, November 20, 2008
16 Indicted In New York Mortgage Fraud Scheme
Two indictments were unsealed in federal court in Brooklyn charging sixteen defendants for their participation in two separate schemes to defraud mortgage lenders of more than $13 million in mortgage loans. A third indictment was unsealed charging four defendants, including three indicted on the mortgage fraud charges, with participating in a cocaine distribution ring. The defendants are scheduled to be arraigned before United States Magistrate Judge Ramon E. Reyes, Jr.
The defendants by Indictment include:
Property Cash/Home Cash Indictment
Lawrence Albers, 51;
Al Cassiano Jr., 41;
Alison Edelman, 30;
Rony Philippe Exantus, 45;
Robert Alexander Guerrero, 33;
Victor Guerrero, 35;
Ansy Guerrier, 29;
Gary Jacques, 33;
Jeffrey Jacques, 25;
Michael McEnroe, 37;
Johanny Mendez, 26;
Sandra Sam, 44.
Able Scheme Indictment
Al Cassiano, Jr, 41;
Gloria Espenas, 43;
Ryan Gosin, 34;
Brian Klein, 30;
Michael McEnroe, 37
Irving Salzberg, 57.
Cocaine Trafficking Indictment
Robert Alexander Guerrero, 33;
Gary Jacques, 33;
Jeffrey Jacques, 25;
Cesar Polanco, 36.
The Property Cash/Home Cash Scheme
As alleged in the first indictment, Robert Guerrero controlled Property Cash, located in Greenlawn, New York, and Gary Jacques controlled Home Cash, located in Huntington Station, New York. Through these entities, Guerrero and Jacques used straw buyers, including Alison Edelman, Rony Philippe Exantus, and Johanny Mendez, to purchase New York properties located in Huntington, Huntington Station, Greenlawn, Bay Shore, Uniondale, and elsewhere, by fraudulently overstating the straw buyers’ financial condition. According to the indictment, Guerrero and Jacques used some of these properties as sites to conduct narcotics distribution activities, conduct for which they and two others are charged separately in the cocaine distribution indictment described below. Guerrero and Jacques sold many of the fraudulently acquired properties, often at inflated prices, to buyers including Sandra Sam, who also obtained mortgage loans through fraudulent loan applications. In furtherance of the scheme, Michael McEnroe served as a loan processor and mortgage broker for many of the fraudulent mortgage applications; real estate appraisers Lawrence Albers and Al Cassiano, Jr. inflated the value of properties that served as collateral for the loans; Ansy Guerrier recruited straw buyers; and Jeffrey Jacques and Victor Guerrero helped falsely inflate the financial condition of the borrowers. As a result of the defendants’ scheme, lenders were defrauded of more than $8.8 million in mortgage loans in connection with approximately nineteen different properties. Several of the properties are now in foreclosure.
The Able Scheme
The second indictment alleges that Michael McEnroe and Ryan Gosin controlled the Able Group and its related companies Able Funding and Able Development, which were located at different times in East Meadow and Baldwin, New York, and used these entities and others to carry out a mortgage fraud scheme. Specifically, as alleged in the indictment, McEnroe purchased properties in Middle Village and Levittown with funds obtained from mortgage lenders through fraudulent loan applications; McEnroe and Ryan Gosin recruited straw buyers including Irving Salzberg and Brian Klein to purchase properties located in Merrick, East Islip, and Valley Stream, among other locations, with mortgage loans obtained through fraud; Gloria Espenas, then a vice president at a JP Morgan Chase branch on Long Island, signed and provided fraudulent verification of deposit forms in which she overstated the value of the straw buyers’ assets on deposit at the bank; and Cassiano, Jr. inflated the appraised value of property that served as collateral for the loans. Through this scheme, lenders were defrauded of more than $4.9 million in mortgage loans in connection with approximately nine different properties. Several of the properties are now in foreclosure.
Cocaine Distribution Conspiracy
The third indictment charges Gary Jacques, Robert Guerrero, Jeffrey Jacques, and Cesar Polanco with distributing and conspiring to distribute more than five kilograms of cocaine. Guerrero and Gary Jacques allegedly conducted their drug distribution activities in part at properties acquired through the Property Cash/Home Cash mortgage fraud scheme. strong>Gary Jacques is also charged with separate offenses involving the importation of more than five hundred grams of cocaine into the United States.
“This case represents the results of a truly cooperative effort,” stated United States Attorney Campbell. “I want to extend my grateful appreciation to all of our law enforcement partners for their contributions, with special recognition to ICE for leading the investigation, and to the members of the Organized Crime Drug Enforcement Task Force (OCDTEF), including the United States Marshals Service, Drug Enforcement Administration, Suffolk County Police Department, and the Suffolk County Department of Probation, for their hard work.” In May 2008, Mr. Campbell announced the formation of a task force comprised of federal, state, and local law enforcement agents and investigators to address the burgeoning problem of mortgage fraud.
“ICE agents, the U.S. Attorney, and our law enforcement partners have collared individuals trying to defraud lenders of millions of dollars worth of loans,” said ICE Special Agent-in-Charge Smith. “These mortgage fraud conspirators included straw buyers, corrupt appraisers, a bank employee, and individuals involved in cocaine trafficking and money laundering. We at ICE will continue to work to seek out those individuals who conspire to commit these crimes.”
FDIC-OIG Inspector General Rymer stated, “The FDIC-OIG is committed to its partnerships with others in the law enforcement community as we address mortgage fraud cases throughout the country. Now, more than ever, the American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal activities that undermine that integrity will be held accountable.”
IRS Special Agent-in-Charge Haynes stated, “Mortgage fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system, and threatens the financial health of our communities. IRS-Criminal Investigation is always ready to work with our law enforcement partners on investigations like this one.”
HUD-OIG Special Agent-in-Charge Febles stated, “When one deliberately defrauds the Section 8 program, it deprives those individuals who really need the funding. HUD-OIG will continue to work with our law enforcement partners to investigate individuals who steal from HUD programs.” Mr. Febles praised the efforts of the U.S. Immigration and Customs Enforcement and also thanked the investigative team for their outstanding work in the investigation.
If convicted, the defendants face a maximum sentence of 30 years in prison on each count of bank fraud or conspiracy to commit bank fraud; 20 years in prison on each count of wire fraud, money laundering, and conspiracy to commit wire fraud or money laundering; 10 years in prison on the count of stealing government funds; and up to life in prison on each count of trafficking in more than five kilograms of cocaine. Gary Jacques also faces up to 40 years in prison on each count relating to the importation of cocaine into the United States.
The government’s cases are being prosecuted by Assistant United States Attorneys Paul Tuchmann, Raymond Tierney, Justin Lerer, and Duncan Levin.
The charges were announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, Peter J. Smith, Special Agent-in-Charge, United States Department of Homeland Security, Immigration and Customs Enforcement (ICE), Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation (FDIC), Patricia J. Haynes, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York, and Rene Febles, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of Inspector General, New York (HUD-OIG).
mortgage fraud
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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.
More Trial Coverage
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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 
