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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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Real Estate Developer Pleads Guilty in $50 Million Bank Fraud Scheme
Solomon Dwek, 37, Monmouth County, New Jersey real estate developer, pleaded guilty to bank fraud and money laundering charges in connection with his scheme to defraud PNC Bank of more than $50 million.
Dwek pleaded guilty before U.S. District Judge Jose L. Linares to an Information charging him with one count each of bank fraud and money laundering. Judge Linares continued the defendant's release on a $10 million bond pending sentencing, which is scheduled for Feb. 9, 2010.
At his plea hearing, Dwek admitted that he and Joseph S. Kohen, 39, Deal, New Jersey, schemed to defraud PNC Bank of more than $50 million and to launder approximately $22.8 million of the proceeds through other banks, which included paying off an overdue and fraudulently obtained $20 million line of credit at HSBC Bank USA, N.A. (HSBC).
Dwek admitted that he and Kohen schemed to defraud PNC Bank by presenting, on April 24 2006, a $25,212,076 check drawn on a Dwek-controlled account in the name of Corbett Holdings at a PNC Bank branch in Eatontown. Dwek admitted that he wanted the check deposited into another PNC account that he controlled in the name of SEM Realty Associates, LLC. Dwek admitted that after a PNC Bank official advised him that the Corbett Holdings account was closed with a zero balance, he falsely represented that "Corporate" was reopening the account and that a wire transfer of funds into the Corbett Holdings account would be forthcoming, which did not occur. Dwek's check was honored and deposited.
The next day, April 25, Dwek phoned in four wire transfers out of the SEM Realty account to various other banks, including $20 million and $2.2 million wire transfers to HSBC, according to Dwek. Dwek admitted that the $20 million wire transfer to HSBC was for the purpose of paying off an overdue and fraudulently obtained $20 million line of credit that he received from HSBC, which he had fully drawn down. As a result, according to the charges, the SEM Realty account was overdrawn by approximately $22,790,000.
Dwek further admitted that on April 25, 2006, he also presented another bogus $25 million check to be drawn on the same Corbett Holdings account for deposit into the same SEM Realty account at PNC Bank branch in Asbury Park. This check was not honored or deposited by the bank.
Dwek admitted that he made a number of false statements and representations to cover up this scheme, including falsely advising a PNC bank official that he was expecting a wire transfer from an attorney that would cover the $25,212,076 check drawn on the Corbett account. Dwek then admitted that he later called back the PNC official and had Kohen pose as the attorney and falsely tell the bank official that he would make a wire transfer to cover the $25 million check.
As charged in the second count of the Information, the wire transfers of these fraudulently obtained proceeds to HSBC, as well as two other wire transfers of $580,000 and $10,000 to other banks, was money laundering.
Kohen pleaded guilty to bank fraud on March 21, 2007. His sentencing is pending before Judge Linares.
Dwek was charged with bank fraud on May 11, 2006, in a criminal Complaint. Thereafter, Dwek cooperated with law enforcement in an investigation of a pre-existing money laundering network that allegedly operated internationally among New York, New Jersey, Israel and other locations and laundered millions of dollars through charitable, non-profit entities. Law enforcement officials also utilized Dwek to investigate public corruption in New Jersey. Those investigations led to charges on July 23 against 44 individuals for public corruption, money laundering and, in the case of one individual, human organ-trafficking.
To date, seven individuals have pleaded guilty to public corruption charges, and a federal grand jury has indicted four others.
Dwek also is scheduled to appear for a proceeding in state Superior Court in Freehold, Monmouth County.
The bank fraud charge carries a statutory maximum penalty of 30 years in prison and a fine of $1 million. The money laundering charge carries a statutory maximum penalty of 10 years in prison and a $250,000 fine.
In determining an actual sentence, Judge Linares will consult the advisory U.S. Sentencing Guidelines, which recommend sentencing ranges that take into account the severity and characteristics of the offenses, the defendant's criminal histories, if any, and other factors, including acceptance of responsibility and cooperation. The judge, however, has discretion and can sentence above, below or within a guidelines range.
Based on the relevant factors, the government and defense counsel agree that Dwek faces a Sentencing Guidelines range of between 108 and 135 months in federal prison.
Parole has been abolished in the federal system. Defendants who receive custodial terms must serve nearly all of that time.
U.S. Attorney Paul J. Fishman announced the guilty plea.
Fishman credited Special Agents of the FBI, under the direction of Special Agent in Charge Weysan Dun, and Special Agents of IRS Criminal Investigation, under the direction of Special Agent in Charge William P. Offord, for the investigation leading to today's guilty plea.
Fishman also thanked assistant prosecutors and investigators from the Monmouth County Prosecutor's Office, under the direction of Prosecutor Luis A. Valentin, for their assistance in the investigation.
The government is represented Assistant U.S. Attorney Brian R. Howe, Deputy Chief of the Office's Special Prosecutions Division, and Thomas J. Eicher, Assistant U.S. Attorney-in- Charge of the Trenton Office.
I feel we live in a third world country were everybody is planning ways to rob the system and the counry. We really need the a check and balance on the banking system. The mortgages and loaning system needs to be more tigthened up.
Sam
voyage home loans
Sam
Posted by on 10/23 at 12:57 PM
I agree w/"Sam" that we need to tighten up our financialy system. This is an industry that has demonstrated more than once that it can take out the economy, and burden tax payers, through greed and fraud. Housing and finance industries scream for tight regulation, not self-regulation. I’m not normally in favor of bigger governent but I stopped falling for corporate special interests hollow cry of “Get big govt out of our lives” a long time ago--what they really mean is get the government’s nose out of our organized crime. The fact anyone in this industry is given bailout money and time with congressment to keep begging for more is obscene.
Posted by on 10/24 at 09:30 PM
Developers should beware of different schemes from possible bad money deals.
We specialize in affordable housing and everyday we get calls from some potential investor / lender asking us to commit fraud. This seems to be a common practice since the mortgage crisis. But not only is this being done by the 2 mention above, some greedy real estate brokers are doing the same.. Until the federal government beings to investigate everyone instead of just the mortgage brokers! I am afraid this will continue.
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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