Thursday, April 20, 2006

Former Mortgage Company Owner Pleads Guilty in Illinois Flipping Scheme

Lawrence V. Lynch, 53, Wilbraham, Massachusetts, the former president of Affordable Mortgage Co, pleaded guilty to federal charges of wire fraud and money-laundering conspiracy. He was charged in 2005 with twelve other people in connection with a real estate flipping scheme involving more than 100 homes in the greater Springfield area of Illinois.

At the hearing, according to media reports, Assistant U.S. Attorney William M. Welch II described one transaction where a borrower purchased a duplex without an opportunity to view both sides of the property. ”When he received the keys, he found a fire had burnt holes in the first and second floors, there was no staircase, the interior had been stripped of plumbing and electrical fixtures and there was no boiler,” Welch told Neiman. Lynch admitted to receiving a $16,500 kickback in connection with the transaction.

Those charged in the case were:

Albert V. Innarelli, closing attorney, Agawam, MA (disbarred)

Michael Bergdoll, Property Seller/Real Estate Developer, Wilbraham, MA

Anthony Matos, Property Seller/Real Estate Broker, Ludlow, MA

Pasquale A. Romeo, Property Seller/Real Estate Broker, Springfield, MA

Wilfred Changasie, Borrower Recruiter, formerly of Springfield, MA

Theodore C. Jarrett Jr., mortgage broker, Springfield, MA

James E. Smith, mortgage broker, Baltimore, MD

Jonathan Frederick, appraiser, Agawam, MA

Joseph Sullivan, appraiser, Springfield, MA

Mark L. McCarthy, mortgage broker, Wilbraham, MA

Edgar Corona, used car salesman, Springfield, MA

Kathryn Zepka, mortgage broker

The indictment alleged that Bergdoll, Romeo, Matos and others purchased distressed properties, typically in low-income neighborhoods, at resolve the properties rapidly at artificially inflated values. They utilized ‘runners’ to recruit prospective buyers and paid finder’s fees to the runners of approximately $2000 for the successful sale of properties.  The defendants represented to buyers that the buyers would not have to make down payments and that money would be kicked back at the time of closing. They also represented that certain repairs would be made to the properties before closing.

Bergdoll, Romeo, Matos and others, who had established business relationships with Jarrett, Smith, McCarthy, Lynch, Zepka and other mortgage brokers, referred many of the buyers to them for loans.  As many of the borrowers were not qualified, the defendants generated and processed false and fraudulent loan applications and documentation through lending institutions. False documentation reflected that buyers made down payments that were not actually made, reflected inflated borrower income and showed improvements that were not actually made to the properties. The defendants also generated bogus second mortgages to assist in securing loans and created fraudulent inflated appraisals.  The mortgage brokers and appraises received continued business along with ‘incentive’ payments such as cash or hidden interests in real estate deals.

Once the loans had been approved by the lending institutions, Bergdoll, Romeo and Matos referred the buyers to Innarelli and other attorneys. Innarelli generated false closing documentation to facilitate and conceal the fraud.  Innarelli received both continued business and ‘incentive’ payments such as cash or hidden interests in real estate deals. Anticipating foreclosure, Innarelli withheld real estate and utility payments owed by buyers at closing and kept the payments for his personal use.

mortgage fraud

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Today's News

Some Sources require Registration.   Marco Island Man Arrested in Ohio on Grand Theft Charge Naples News A man who claimed he was a broker is accused of bilking a long-time family friend out of more than $130,000. Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc. Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010. Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area. Lend America, VP Ashley Banned from FHA Housing Wire Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week. Countrywide Tries to Pin Blame on Insurer Court House News Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse. Investors Say They Were Swindled in Property Scheme Fox 13 Now Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches. Greenfield Man Accused of Housing Scam The Republic A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said. Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes. Ownership Rights to Get Another Look TBO.Com State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County. Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty. Follow Anne on Twitter. Thursday, February 18, 2010 F. Jeffrey Miller Trial - 1 Convicted, 3 Acquitted The jury deliberated for approximately 3 days after receiving their jury instructions. They asked one question: Does ‘common sense' allow us to deduce what the banks may or may not been influenced by in order to make a loan? Judge Julie Robinson responded by admonishing the jurors to read all of the instructions. The jury presented its' verdict... Read More... Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony As reported by Anne Mitchell, who viewed the trial: Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the... Read More... Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony Steve Middleton Testimony - Coverage Provided by Anne Mitchell The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's... Read More... Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination According to Anne Mitchell, who is present in court for the trial: Next Witness: Kelly Sanford Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in... Read More... Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued According to Anne Mitchell, who is viewing the trial: January 13, 2010 Witness: Rick Hayes Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John... Read More... More Trial Coverage

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