Monday, August 27, 2007
Appraiser Pleads Guilty in $50 Million Real Estate Investor Fraud
William Page, 37, Old Bridge, New Jersey, pled guilty before U.S. District Judge Jose L. Linares to a one-count Information charging him with conspiracy to commit mail fraud for creating materially false and misleading property appraisals and construction progress letters. The scheme involved the following defendants:
John Morris, 61, Fort Lee, New Jersey;
Michael Meehan, 47, Belmar, New Jersey;
John Kurzel, 55, New Brunswick, New Jersey;
Lucesita Santiago, 37, Woodbridge, New Jerswey.
Katrina Arrington, 34, Hillside, New Jersey;
The inflated appraisals were used to assure individuals that their investments in NJ Affordable Homes Corp., (NJAH) were secured by investment properties. The false construction progress letters falsely stated that renovations and improvements were made to investment properties and were used to fraudulently disburse investors’ funds from escrow.
Morris pled guilty before Judge Linares to a one-count Information charging him with conspiracy to commit wire fraud in connection with his role in a conspiracy to defraud mortgage lenders of at least $2 million. Morris oversaw the creation of fraudulent property appraisals that were sold by NJAH to nominee or straw buyers. Using the fraudulent appraisals, NJAH prepared fraudulent loan applications in the names of nominee buyers and sold the properties at inflated prices. The scheme left mortgage lenders with loans that were grossly undersecured, and nominee buyers with outstanding mortgage loans in their names.
Page and Morris are the fifth and sixth individuals associated with NJAH who have pleaded guilty in related investment and mortgage fraud schemes. NJAH, Perth Amboy, New Jersey, purported to be in the real estate financing and investment business. The company first came under scrutiny of the Securities and Exchange Commission, which obtained a restraining order against the company in September 2005. NJAH subsequently was ordered into receivership and then bankruptcy by a federal judge.
In March 2007, Meehan pled guilty to his role in the conspiracy to defraud various lending institutions. In January 2007, co-conspirator Arrington pled guilty to her role in the conspiracy. In October 2006 co-conspirators Kurzel and Santiago both pled guilty to the same conspiracy charge for their participation in the mortgage fraud scheme.
Christie said the investigation is continuing as to the company and other individuals believed to be involved.
At his plea hearing, Page admitted that during the period 1998 through September 2005, he knowingly created materially false and misleading property appraisals that fraudulently inflated the value of properties that NJAH used to purportedly secure investor funds. The appraisals were used by NJAH to persuade individuals to make and retain over $100 million of investments made with the company. Page also admitted that he created materially false and misleading construction progress letters that were used to release investors’ money from an attorney escrow account.
At his plea hearing, Morris admitted that from about March 2003 through September 2005, as NJAH‘s appraisal coordinator, he participated in a conspiracy to defraud various mortgage lenders by submitting materially false and misleading property appraisals and altered photos of properties. The appraisals materially overstated the value of the properties and stated falsely that the properties had substantial improvements such as new windows, new bathrooms, new electric wiring, new plumbing and new siding.
Judge Linares scheduled sentencing for Page and Morris for December 10, 2007. Both Page and Morris are free on $25,000 unsecured bonds. The charges to which Page and Morris pleaded guilty carry a statutory maximum penalty of five years in federal prison and a fine of $250,000.
The guilty pleas of Page, Morris, Meehan, Arrington, Santiago and Kurzel stem from a criminal referral made by the U.S. Securities and Exchange Commission’s Enforcement Division and result from a combined investigation conducted by the Federal Bureau of Investigation, the U.S. Department of Housing and Urban Development and the U.S. Postal Inspection Service.
mortgage fraud
Did the investors in NJAH get their money back
Posted by on 06/29 at 08:18 AM
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Erie Area Mortgage Broker Gets Prison in Fraud Case
GoErie.com - Erie, PA
Shortly before receiving a nearly three-year federal prison sentence, former mortgage office manager Francis R. Conti told the judge he never meant to defraud any of the homeowners caught up in a widespread local mortgage-fraud scheme.
Three Former Portland-Area Mortgage Brokers Face Fraud Charges
OregonLive.com - Portland, OR
Joel D. Surprenant, Michael Duc Han and Benjamin Lucian Lucescu all were charged with one count of obtaining mortgage loans through materially false and fraudulent pretenses.
Shaker Pair Pleads Guilty to Mortgage Fraud Charges
Cleveland.com - Cleveland, OH
Two Shaker Heights residents recently pleaded guilty to charges involving a mortgage scheme with seven area houses and $3 million in fraudulent loans.
Feds File Charges in Five Mortgage Fraud Cases
Chicago Breaking News - Tribune - Chicago, IL
Federal charges were filed today against 37 people and four companies in five separate mortgage fraud cases.
Feds Fighting Back
Contra Costa Times - Walnut Creek, CA
Mortgage fraud has increased so dramatically in the San Joaquin Valley that a task force of federal, state and local agencies has been formed to fight back.
Private Investigator Sees Rise in Mortgage Fraud Due to Economy
PR Web - Ferndale, WA
In the past 12 months his firm has been retained to conduct over 300 mortgage fraud investigations, a 100% increase from 2007.
Former UGA, NFL Football Player Arthur Marshall Charged With Mortgage Fraud Claims
WJBF-TV - Augusta, GA
He is also accused of defrauding three banks in obtaining loans for seven different properties in Columbia and Richmond Counties.
Cuomo Subpoenas Loan Modification Companies
New York Times - United States
“The entire industry is a scam, in my opinion,” Mr. Cuomo said Tuesday. “These are services that homeowners don’t need to pay for in the first place.”
Defendant Pleads Guilty to Wire Fraud Relating to Mortgage Fraud Scheme
Imperial Valley News - Holtville, CA
Scavitti admitted that between 2003 and August 2008 he unlawfully diverted mortgage funds that were wire transferred into his client office account to his own personal benefit, resulting in losses in excess of $2.5 million.
Fed Drug Report: Double Trouble for Metro Chicago
ABC7Chicago.com - IL
...Chicago street gang members run a network of legitimate businesses and have engineered mortgage fraud schemes, both to launder drug proceeds...
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
Update - US v. F. Jeffrey Miller, et al.
Miller II: Judge Julie Robinson has ruled in favor of the defense motion granting a continuance for sentencing of the 3 convicted defendants: F. Jeffrey Miller, Steve Vanatta and Hallie Irvin. The three will now be sentenced after ruling on post trial motions set for August 10, 2009.
Vanatta has been in custody for over 2 years. Vanetta filed a motion for his release pending sentencing. That motion was denied.
Miller remains free pending his sentencing. He has hired a new attorney who filed a motion to delay Miller's sentencing. In one post trial motion, the defense argues as to what assets are subject to seizure.
Defendant Todd Earnshaw is a Kansas City real estate Broker (and brother in law of Miller). Earnshaw has been indicted in what is commonly referred to as Miller I. A trial date for that matter has been set for January, 2010 in Topeka, Kansas.
The Government filed a motion to revoke Earnshaw's bond and remand him to custody while he awaits trial after learning that he allegedly committed the state crimes of Driving Under the Influence, Handicap Parking Violation and Failure to Control Speed to Avoid a Collision while on pretrial release. Notwithstanding finding that probable cause existed to believe that Earnshaw committed the aforementioned state crimes, Judge Robinson denied the motion, but ordered several strict conditions that Earnshaw must follow pending his trial.
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Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. 
