Monday, April 10, 2006

Indictment of Dentist and Former Employee in New Jersey Mortgage Fraud Scheme

A Staten Island, New York, dentist and a former employee were indicted in New Jersey federal court on conspiracy, wire fraud and money laundering charges for operating a scheme to fraudulently obtain $1.36 million in mortgages and spending the proceeds on luxury items including the purchase of a 46-foot yacht, a North Carolina residence and a GMC Yukon Denali.

The 23-count Indictment charges Terrance D. Stradford, 46, a.k.a “Wayne Sellers,” Staten Island, New York, and Christina Hachadoorian, 35, Burlington City, a.k.a. “Christian Hachadoorian,” “C.L. Doorian” and “Crystal Doorian,” with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, three counts of wire fraud and 18 counts of money laundering. The Indictment also contains a forfeiture allegation serving notice that the United States will seek forfeiture of all property, both real and personal, derived from proceeds of the scheme.

The Indictment describes a scheme in which the defendants used fraudulent documents, made false statements, established fictitious companies and opened back accounts in the companies’ names to fraudulently obtain mortgages secured by a property at 412-414 Commerce Lane, West Berlin, New Jersey. (the “Commerce Lane property”).

According to the Indictment, in October 1999, Stradford formed a limited liability company called 412-414 Commerce Lane, LLC (“412-414 LLC”). In forming the entity, Stradford named himself the sole owner and listed “C.L. Doorian” as a corporate agent. In December 1999, Stradford, acting through 412-414 LLC, purchased the Commerce Lane property for $337,500 with a first mortgage in the amount of $310,000 held by American Business Credit Inc. (the “ABC Mortgage”). In September 2002, Stradford encumbered the Commerce Lane property with a second mortgage in the amount of $244,756 (the “ M.W. Mortgage”).

In June 2004, Stradford used the Commerce Lane property as collateral for a $500,000 mortgage loan from Quantum Corporate Funding, Ltd., (“Quantum”). In obtaining the loan, Stradford provided fraudulent documents to Quantum, including income tax returns containing a fake social security number and a commitment for title insurance which falsely indicated that there were no current mortgages on the Commerce Lane property, according to the indictment. According to the Indictment, Stradford and Hachadoorian spent the proceeds of the Quantum loan on themselves, which included the June 2004 purchase of a 1998 Maxum 46’ yacht using the aliases “Wayne Sellers” and “Christian Hachadoorian.”

In furtherance of their scheme, the defendants created a fictitious title company named Burlington Title Agency, LLC, and opened bank accounts in the names of Burlington Title Agency, LLC, A.B.C., LLC and Commonwealth Medical Supply, LLC, in July 2004.

In August 2004, Stradford used the Commerce Lane property as collateral for a $585,000 mortgage loan from Eastern Savings Bank (the “Eastern loan”). The proceeds of the loan were purportedly to be used for the refinancing of the ABC mortgage and the purchase of medical equipment from Commonwealth Medical Supply. According to the Indictment, the defendants provided fraudulent documents to Eastern Savings Bank, including title insurance commitment documents purportedly from Burlington Title Agency that falsely indicated the only mortgage on the Commerce Lane property was a mortgage held by American Business Company, when in fact, American Business Credit, Inc., was the actual issuer of the ABC mortgage and both the ABC mortgage and the M.W. mortgage remained as liens on the Commerce Lane property.

At closing, Eastern Savings Bank disbursed the loan proceeds to accounts in the names of Burlington Title Agency, LLC, A.B.C., LLC, and Commonwealth Medical Supply, LLC, which unbeknownst to Eastern Savings Bank, were controlled by the defendants. According to the Indictment, the defendants spent the proceeds of the Eastern loan on themselves, including the August 2004 purchase of a property in Belmont, N.C.

In September 2004, the defendants repeated the scheme to obtain a $275,000 mortgage loan from Asset Funding Group, LLC. At closing, the loan proceeds were wire-transferred into the Burlington Title Agency account. The Indictment alleges the defendants spent the funds on themselves, which included the purchase a 2005 GMC Yukon Denali.

The defendants are each charged in Count One of the Indictment, which alleges a conspiracy to commit wire fraud, which carries a statutory maximum penalty of five years in prison and a fine of $250,000 or twice the aggregate loss to the victims or gain to the defendants. Counts Two through Four charge both defendants with wire fraud, which carries a statutory maximum penalty of 30 years in prison and a fine of $1 million. Count five charges the defendants with conspiracy to commit money laundering, which carries a statutory maximum penalty of 10 years in prison and a fine of $250,000. Counts Six through 23 charge both defendants with money laundering, which carries a statutory maximum penalty of 10 years in prison and a fine of $250,000.

mortgage fraud