Thursday, July 12, 2007

26 Indicted in New York Mortgage Fraud Scheme

A superseding Indictment was unsealed charging 26 individuals with participating in a wide-ranging scheme to commit mortgage fraud. According to the superseding Indictment filed in Manhattan federal court, the defendants committed the fraud by submitting loan applications and supporting documents, which contained false information and material omissions, to sub-prime lenders in order to induce the lenders to make loans that otherwise would not have been funded.  The superseding Indictment added over two dozen new counts charging some of the defendants with committing mortgage fraud in the purchase of a block of ten rent-regulated condominium apartments at 243 West 98th Street on the Upper West Side of Manhattan, New York.

Specifically, the Indictment alleges that certain defendants obtained millions of dollars in loan proceeds from sub-prime lenders by submitting fraudulent loan documents containing false information and material omissions regarding the fact that the apartments were subject to New York’s rent regulation laws, the borrower’s intent to live in the apartment as a primary residence, the borrower’s employment and income, and the fair market value of the apartments, among other things.

Three additional defendants are also named in the Indictment, including Galina Zhigun, the owner of the mortgage brokerage AGA Capital NY, Inc. (”AGA Capital”), Brooklyn, New York, where many of the co-defendants worked as mortgage brokers and/or loan processors.

From 2004 through December 2006, AGA Capital, and its successor, Lending Universe Corporation, and another related brokerage, Northside Capital, brokered over one thousand home mortgages and home equity loans—with various sub-prime banks and lending institutions—with a total face value of at least $200 million dollars. AGA Capital, Lending Universe and Northside Capital earned a total of at least $4 million in commissions and fees on the loans. The sub-prime lenders that issued the mortgages and loans brokered by Northside Capital, AGA Capital and Lending Universe have suffered actual losses of at least $4.5 million as a result of the defendants’ scheme to defraud.

mortgage fraud

1. Was Wilmington finance in valed? They are surpost to be part of AGA capital, or GTO capatial. Where do I find this case and how do I get copies of it?

   Posted by  on  07/12  at  03:37 AM

2. This article is grossly inaccurate as to Northside Capital’s involvement.  The individuals under indictment were brief employment of Northside and were terminated after 4 months.  We are only mentioned in the indictment as a former employer.  We are NOT under indictment.  Thanks to articles like this, we have to unnecessarily defend our name and business to countless banks and customers.  I would like to formally thank you for not checking your facts before printing articles and hurting people’s livelyhoods.

   Posted by  on  07/12  at  10:49 AM

3. galina unfortunately let too many people “co-broker” without overseeing their deals.  unfortunately her greed overwhelmed her responsibility and now she will probably be sentenced.  beware of the deals being done under your license, everyone likes to make money but the cost is sometimes too steep.

   Posted by  on  07/13  at  04:15 AM

4. Good morning Kyle:

   The article on Mortgage Fraud Blog was taken directly from a press release by the US Attorney for the Southern District of New York.  If you have issue with the characterization of Northside’s invovleemnt, your issue is with the US Attorney.  If they issue a retraction, we would be pleased to print it or to revise the article.

   Rachel Dollar

   Posted by Rachel Dollar  on  07/13  at  08:40 AM

5. Is there any way to find out who the real estate appraisers are who where charged?

   Posted by  on  08/02  at  05:34 AM