Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Matthew J. Kupic, 38, and Francis Thomas Disonell, 38, both of Clifton Park, New York, were sentenced before the Honorable Gary L. Sharpe in United States District Court in Albany, N.Y., for their participation in a mortgage and tax fraud scheme. Both defendants were sentenced to a term of imprisonment of 24 months. Judge Sharpe further ordered the defendants to pay restitution in the amount of $887,311.57 to the victim banks, and ordered that each defendant forfeit over $600,000 in the fraudulent mortgage proceeds that they obtained from the mortgage fraud scheme.
Nearly a year ago, in May 2007, Kupic and Disonell pled guilty and admitted their participation in a mortgage fraud scheme that took place between March 2000 and August 2003, in connection with their former businesses Team Title Abstractors and Real Estate Consultants, located on Route 9 in Clifton Park, New York. The defendants admitted that they knowingly and willfully executed a scheme to defraud banks and other mortgage lenders by arranging to secure excessive mortgages for numerous residential properties through the use of fraudulent loan applications and settlement statements, and by diverting mortgage funds for their personal use and to third parties. The defendants admitted that the scheme operated in the following manner:
Kupic and Disonell identified below-market real estate properties for sale by owner that were in need of substantial rehabilitation. They located buyers for the properties with promises of ownership of income-producing property and the promise of money back at closing for necessary repairs. In order to obtain funding for the purchases, Kupic and Disonell caused buyers to submit fraudulent loan applications to lenders which concealed the source of the buyers’ funds necessary for down payments and other associated closing costs. In some instances the defendants loaned buyers money to make the purchases and close, thereby creating buyer liabilities that were not disclosed in loan applications. In other instances, they deposited money into the bank accounts of buyers to increase the likelihood that lenders would approve the loan applications, and then withdrew the funds after the loans were approved.
As part of the scheme, sales contracts and other documents submitted to mortgage lenders contained forged signatures and other false statements. For some real estate transactions, Kupic and Disonell created and utilized “Repair Rebate Agreements” which identified future upgrades to the subject properties that purportedly were going to be completed by the buyers with loan proceeds. KUPIC and DISONELL knew these upgrades would never be completed and, in fact, they never were completed. Repair Rebate Agreements were merely a mechanism the defendants used to get loan funds to the buyer, themselves, and third parties without making any disclosure of the disbursements to the lenders.
Kupic and Disonell also arranged for multiple purchases with the same buyer, to take place close in time – often on the same day – so that subsequent lenders did not learn of the buyer’s recent loans and liabilities. These additional mortgage loans held by buyers were not disclosed to the lenders at the time of the subsequent closings, and the subject loan applications were not amended to include the buyers’ additional liabilities. In contrast to what was reported to lenders on the HUD-1 Settlement Statements and sales contracts associated with the loans, sellers received only the actual asking prices for properties, minus the amount used to pay off existing mortgages. Bogus checks to sellers, which matched the fraudulent sales amounts listed on fraudulent HUD-1s and sales contracts, were retained in the loan files for Kupic and Disonell to use as proof of payment for lenders. After paying sellers actual asking prices and after paying valid fees disclosed on HUD-1s, Kupic and Disonell fraudulently directed the settlement agent to disburse the remaining mortgage proceeds to themselves, to buyers, and to other third parties, in manners and in amounts not disclosed on the HUD-1 documents, in the sales contracts, or in any other manner to the lenders.
Through their mortgage fraud scheme, Kupic and Disonell obtained excessive mortgages totaling at least $3,641,640, in at least 54 real estate transactions, and diverted a total of approximately $1,983,013.16 of mortgage proceeds to themselves and others. Most of these mortgages were subsequently placed in foreclosure, resulting in substantial losses to various financial institutions and other lenders. Kupic and Disonell each personally received over $600,000 in fraudulent mortgage proceeds (in addition to funds diverted to Real Estate Consultants) which they failed to report as income on their federal income tax returns.
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.
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...
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...
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...
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...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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