Wednesday, July 09, 2008

Inflated Appraisals And Kickbacks Lead To Indictments

Fred DeGuzman and Veronica DeGuzman, formerly of San Antonio, Texas are charged with carrying out a mortgage fraud scheme involving three San Antonio and Spring Branch, Texas residential properties, three financial institutions and over $1,000,000 in foreseeable losses.  The indictment charges the DeGuzmans with three counts of financial institution fraud and two counts of aggravated identity theft.

According to the indictment, from June 25, 2007, to November 5, 2007, Fred DeGuzman, using an alias, and Veronica DeGuzman would contact individual sellers of residential property and enter agreements to purchase the property for an inflated price, with the excess of the stated price over the actual sales price being returned to a corporation owned and controlled by Fred and Veronica DeGuzman. Using the alias, as well as falsified employment and income information, Fred and Veronica DeGuzman applied for and obtained 100% financing. After one or two mortgage payments, the mortgage went into default causing losses to the lenders.

Upon conviction, each defendant faces up to 30 years in federal prison and a maximum $1 million fine plus restitution for each of the financial institution fraud charges, plus up to 2 years and a $250,000 fine for each of the aggravated identity theft counts which must be served in addition to any imprisonment for financial institution fraud.

Nadjah Elias-Caudill, David Barr and Kent Lake, two San Antonio area home builders and a former Boerne, Texas, resident are charged with carrying out a mortgage fraud scheme involving six Boerne, Texas residential properties, six lending institutions and over $3 million in foreseeable losses.

The seven-count indictment charges Nadjah Elias-Caudill along with homebuilders David Barr and Kent Lake with one count of conspiracy to commit wire fraud plus six substantive wire fraud counts.

The indictment alleges that from February 2006 until March 27, 2007, Elias-Caudill caused Barr and Lake, doing business as Barr/Principle Builders, to enter into contracts for the sales of six homes for an agreed-upon, inflated price. Those contracts included an estimated $460,000 in kickbacks which ultimately benefitted Elias-Caudill. Elias-Caudill then used the names and personal identifiers (dates of birth and Social Security Numbers) of her sister-in-law, brother, and father of a former employee, as well as falsified employment and income information to apply for and obtain 100% financing. After one or two mortgage payments, the mortgage went into default causing losses to the lenders.

Upon conviction, each defendant faces up to 20 years in federal prison and a maximum $250,000 fine per count plus restitution.

“Mortgage fraud damages the stability of our national housing market and hurts American homeowners. We intend to prosecute it aggressively,” stated United States Attorney Johnny Sutton.

These cases were investigated by the Federal Bureau of Investigation as part of a nationwide crackdown on mortgage fraud called Operation Malicious Mortgage. Assistant United States Attorney William R. Harris is prosecuting these cases on behalf of the government.

An indictment is a formal accusation of criminal conduct, not evidence of guilt. Defendants are presumed innocent unless and until convicted through due process of law.

mortgage fraud

1. This indictment of criminal conduct by the Feds is still another example of the fraudalant misuse of our taxpayers dollars. By now everybody knows that local players, which included builders, loan originators, mortgage brokers, and the such, were all puns for large lenders and Wall Street investors who made billions of dollars! They didn’t care how or where the loans came from----just get them to us.  All over America, many did just that.  It was too easy___no doc, limited doc, stated income, stated savings, write whatever was needed in the space---the lenders’ underwriters didn’t check or cared.  Everybody was approved!!  The Feds know that the major lenders contributed to this mess, yet they continue to beat their chest about the number of investigations and arrest of the small “street level” players.  Shame on them.  On the other hand, I think that the Feds have done a wonderful job of exposing the loopholes and shuting the abusive lending practices down. If they are not going to prosecute the major players, why not JUST MOVE ON?  I believe that the healing process for our national economy would begin overnight!!!!

   Posted by  on  07/09  at  05:10 PM

2. What I find bizarre is that they would be so stupid to even try this.  Kickbacks are explictly illegal in Texas.  I imagine they indicited individuals could possibly have been victims of identity theft themselves are were indicted from the evidence, not because of actual witnesses.

   Also, the reference to M.C. makes me wonder if this Nadjah woman might have been married to Michael Cox (!).  That would be some news, especially for the single mothers Michael used in his frauds.

   Posted by  on  07/13  at  08:31 AM

3. i know what mc stands for..it isnt micheal cox..but i dont see the referance your are talking about

   Posted by  on  07/13  at  06:20 PM

4. To avoid any sort of mortgage frauds or catch you should always clear all your doubts with the money lenders, <a > Allen Home loans </a> helped mw big time.

   Posted by  on  08/19  at  10:41 AM