Friday, April 28, 2006

W.N.Y. Landlord Pleads Guilty To Felonies in Mortgage Fraud Scam

Robert Palano, 51, formerly of Clarence, New York today pled guilty to Grand Larceny and Scheme to Defraud. He faces two to seven years imprisonment. He was charged in connection with allegations that he fraudulently obtained more than $4 million dollars in mortgage loans on 104 rental properties he owned on the East Side of Buffalo, New York.

In related civil actions, Palano agreed to pay $1.5 million in restitution and penalties and to be permanently barred from owning investment properties in Buffalo, New York. Michael Heigel, Palano’s real estate appraiser, also agreed to pay $55,000 in restitution.

“This case demonstrates how mortgage fraud harms not only financial institutions, but can severely undermine communities and harm homeowners’ and tenants’ lives,” Attorney General Eliot Spitzer said.

A 15-month civil investigation by Spitzer’s office revealed that, between 1998 and 2002, Palano fraudulently obtained more than $4 million dollars in mortgage loans on 104 rental properties he owned on the East Side of Buffalo. After pocketing the loan proceeds, Palano absconded to Florida, leaving at least ten lenders with defaulted loans secured by properties worth far less than the debt, and tenants being evicted through foreclosures.

The investigation revealed that Palano used Heigel to do all of his appraisals which were grossly inflated over the true market value.

The charges in the criminal case arise out of a series of 29 fraudulent loan applications submitted by Palano between March and November 2002 to GMAC Mortgage Corporation. According to legal documents, Palano lied on the applications when he declared that he was not at that time a party to any civil litigation. In fact, Palano was then the defendant in an unrelated mortgage fraud case brought by The Associates First Capital Mortgage Corporation.

By December 2003, Palano had defaulted on all 104 loans and as a result, lenders were left holding collateral that was inadequate to pay off the balance. The consequent foreclosures resulted in the eviction of dozens of families from the rental properties and caused further blight of the neighborhoods as boarded up houses were left vacant for months.

Many of the defaulted loans covered by the civil settlement had been resold by the lenders to Fannie Mae, a federally-chartered institution that buys mortgage loans for the purpose of increasing the availability and affordability of housing for low- and moderate-income Americans. The terms of the civil settlement require Palano to pay $1.4 million to Fannie Mae to reimburse its losses.

This is the second time Spitzer’s office has cited Palano in a mortgage fraud case. A 2001 investigation by the Attorney General’s office found that Palano orchestrated a real estate scheme that targeted African-American, first time home buyers. In resolving that case, Palano agreed to pay $225,000 in restitution to his victims and The Associates agreed to reduce the mortgages of 130 properties by a total of $1.6 million. The Associates later civil action against Palano in this matter was the litigation he failed to report.

This case was handled by Assistant Attorneys General James Morrissey of the Buffalo Regional Office and Cydney Kelly of the Criminal Prosecutions Bureau. Senior Investigator Harold Frank assisted in the investigation. The Attorney General also thanked the New York State Police, the Federal Bureau of Investigation, and the United States Attorney for the Western District of New York for their help with the investigation.

mortgage fraud

1. I DONT UNDERSTAND HOW SOME PEOPLE IN THE BUISNESS CAN BE SO GREEDY AND GO OVER THAT BOUNDARY LINE AND STEAL . I MYSELF BEING A SUCCESSFULL TITLE INSURANCE SALESMAN AND CLOSER AM PROUD TO SAY IVE MADE AN EXCELLENT LIVING WITH ONE BIG DIFFERENCE . I DID IT THE HONEST WAY AND I FEEEL GREAT ABOUT THAT. THE FEW BAD APPLES IN THE BUISNESS SPOIL THE REPUTATION OF MANY OF US GOOD GUYS . I HAVE A TERRIFIC LIFESTYLE ,AS GOOD IF NOT BETTER THAN THE CROOKS BUT I DID IT THE HONEST WAY ,WORKING VERY HARD ,YR AFTER YR. THE GUYS WHO KICK BACK WILL NEVER KNOW WHAT IT TRULY FEELS LIKE TO BE A PERSUASIVE SUCCESSFULL SALEMAN LIKE MYSELF BECAUSE THEY BUY THERE BUISNESS WITH KICKBACKS . COWARDS ! .I AS A SALESMAN A TRUE SALESMAN EXPERIENCE MANY MANY MANY AND MANY MORE REJECTIONS THAN YES ES BUT THATS THE NATURE OF SALES. 100 NO S TO 1 YES BUT THAT 1 YES EQUALS A CLIENT WHO EQUALS ,GIVE TERRIFIC SERVICE WHICGH EQUALS VERY NICE HONEST MONEY .

   Posted by  on  05/03  at  12:13 PM

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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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