Avinie Maurice Bates, III, 41, Miramar, Florida, was convicted by a jury in U.S. District Court in Panama City, Florida, on one count of wire fraud for his role in an elaborate mortgage-fraud scheme that spanned from Miami to Panama City.
Codefendants Jill Beth Newman Zuravel, 47, Boynton Beach, Florida; Alan Jay Nathan, 60, Boca Raton, Florida; Meredith Lelann King, 38, Destin, Florida; and Joann V. Walter, 56, Parkland, Florida, pled guilty in the case and testified against Bates, the final defendant.
The evidence at trial relating to the mortgage fraud scheme revealed that Bates touted himself as a real-estate investor with a Miami investment company Right Choice Housing, LLC;
Zuravel was the attorney for Right Choice Housing; Nathan owned Mortgage Bankers of America Group, Inc., a mortgage company located in Boca Raton; Walter was a mortgage broker with Mortgage Bankers of America; and King was a closing agent employed by Blue Dolphin Title, LLC, a title company located in Panama City Beach.
The evidence further showed that, in mid-2005, Bates traveled to Panama City Beach and walked into a real-estate company and said that he wanted to buy five properties in Panama City and Panama City Beach. This meeting kicked off an eight-month, mortgage-fraud spree involving ten properties. The evidence additionally showed that Bates negotiated with the sellers and entered into sales contracts to purchase the properties at one price (the “lower sales price”), and he listed the buyer on the contracts as “Right Choice Housing, LLC and/or assigns.”
For many properties, Bates, through his real estate agent, also convinced the sellers to agree to loan him money from the proceeds they were to make from the sale (the “seller loans”). Then, Bates, Zuravel, Nathan and Walter located “straw buyers”in the Miami area to give their credit information in exchange for between $10,000 and $30,000. They told these individuals that they would not be responsible for anything with the properties and that Right Choice Housing would pay all mortgage payments, taxes and other expenses related to the properties until Right Choice Housing flipped them for a quick sale.
Once the straw buyers were in place, Zuravel prepared assignment documents and addendums, which purported to assign the first sales contract to the straw buyer at a much higher price (the “higher sales price”), provided that the seller would only be paid the lower sales price, and stated that the difference between the lower and higher sales prices would go to third parties named by Right Choice Housing.
Once the assignments were made and the addendums signed by the sellers, Nathan and Walter then prepared loan applications for the straw buyers, in which they falsely inflated the straw buyers income, employment, bank-account balances, and intent to reside at the properties — all to qualify the straw buyers for millions of dollars in loans. King handled the closings in Panama City Beach, and used the difference between the lower and higher sales prices to cover the straw buyer’s required down payment. Over $1.2 million of the remainder was then wired to Bates or companies owned by him, such as Gold by Gold and Bates Enterprises.
In total, lenders gave over $9 million in mortgages to purchase nine properties in Panama City and Panama City Beach, Florida. By the end of 2006, all of mortgages were in default, and all of the properties have since been foreclosed on.
When the jury returned its verdict, the government moved that Bates, who had been on pretrial release, be taken into custody, and the Court ordered his immediate detention.
Sentencings of the five defendants have been scheduled as follows: Bates on August 8, 2012 at 9:30 a.m; Zuravel, Nathan, and Walter on June 20, 2012 at 9:30 a.m, 10:15 a.m, and 10:30 a.m. respectively; King on July 19, 2012 at 9:45 a.m. For their conduct, each defendant faces a maximum of twenty years’ imprisonment, three years of supervised release, a $250,000 fine, or a fine in twice the amount of the gross gain/loss, and a $100 special monetary assessment.
United States Attorney Pamela C. Marsh praised the efforts of the Florida Office of Financial Regulation – Bureau of Financial Investigations, the Florida Department of Financial Services – Division of Insurance Fraud, and the U.S. Postal Inspection Service, which investigated this case
“Combating mortgage fraud continues to be a primary focus of the Northern District of Florida. Mortgage fraud is one of the most serious economic crimes, and it has contributed significantly to the current economic crisis,” said U.S. Attorney Marsh. “We have seen mortgage fraud schemes that resulted in dozens of foreclosures and millions of dollars in losses, as well as fraudsters who have bankrupted entire companies and national lenders who were not playing by the rules. We will continue to aggressively prosecute individuals who perpetrate these kind of devastating financial crimes against our communities.”
The case was prosecuted by Assistant U.S. Attorney Gayle Littleton.