Monday, September 22, 2008
Virginia Broker Sentenced To 4 Years And $5M In Restitution
David Alan Freelander, 50, Norfolk, Virginia, was sentenced on charges of bank fraud and bankruptcy fraud in connection with a scheme that took place from approximately December 2001 to May 2004. United States District Judge Claude M. Hilton sentenced Freelander to 48 months in federal prison, 3 years supervised release, and ordered him to pay $5,439,409.62 in restitution.
Freelander admitted to operating a bank fraud scheme from approximately February 2002 to May 2003. According to court documents, Freelander, a mortgage broker, fraudulently obtained a mortgage loan from Lehman Brothers Bank, FSB, in the amount of approximately $3.9 million, so that a client, Alladean M. Allobaidy, could buy a home in Great Falls, Virginia. Court documents state that Freelander, Allobaidy and settlement attorney Leslie W. Lickstein worked together to supply the bank with false financial information regarding Allobaidy, and false information regarding the nature of secondary financing in the deal. When the mortgage went into default, a Lehman Brothers Bank affiliate took back the property and sold it at a loss of approximately $1.1 million. Court documents also state that Freelander defrauded Lehman Brothers out of an additional $577,000 in connection with his mortgage broker business in Virginia Beach, Virginia.
Court records state that the sellers of the Great Falls property were in bankruptcy at the time of the sale to Allobaidy. According to court documents, Freelander caused several liens to be placed on the Great Falls property after the owners had filed for bankruptcy, without permission from the Bankruptcy Court. He then had those liens paid off at settlement, siphoning that money, and other money, out of the sale. In reality, the money should have been available to pay creditors in the bankruptcy case. All told, the sale of the Great Falls property caused a loss of approximately $3,750,000 to the bankruptcy case, according to court documents.
Leslie M. Lickstein and Alladean M. Allobaidy were sentenced last year for their roles in the scheme. Lickstein, a former president of the Northern Virginia Bankruptcy Bar Association, was sentenced on August 30, 2007, by United States District Judge Gerald Bruce Lee to 12 months and 1 day in federal prison, 3 years supervised release, and ordered to pay $1,110,000 in restitution. Allobaidy, the buyer of the Great Falls property, was sentenced on April 27, 2007, by United States District Judge Claude M. Hilton to 15 months in federal prison, 3 years supervised release, and ordered to pay $1,110,000 in restitution.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Thomas H. McQuillan and Special Assistant United States Attorney Dennis Early of the Office of the United States Trustee prosecuted the case for the United States.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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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 
