Jury Convicts Man for Mortgage Fraud Scheme

Allison Tussey —  April 5, 2011 — Leave a comment

Gabriel Richard Viramontes, 48, Elk Grove, California, was convicted of six counts of bank fraud and seven counts of mail fraud. The guilty verdict was returned by a federal court jury in Sacramento after a seven-day trial before United States District Judge Edward J. Garcia. The jury deliberated just over an hour.

According to testimony presented at trial, Viramontes and three co-defendants (who had already pleaded guilty to related charges) engaged in a mortgage fraud scheme in the Sacramento, California, area that involved at least 19 homes with loans of more than $8 million.

From June 2006 through October 2006, the defendants through VFM Investment Group, Esnian Mortgage Realty, and Freedom Capital Mortgage, engaged in a mortgage fraud scheme by asking investors to purchase with no money down single family homes on behalf of others with bad credit who wished to purchase homes. The investors were told they would benefit financially from the transactions. The defendants then defrauded lenders such as Washington Mutual Bank, Long Beach Mortgage, and Fremont Investment and Loan by submitting fraudulent loan applications that inflated the buyers’ income, falsely stated that a buyer was employed at a specific job, and falsely stated that the properties would be owner-occupied. The purpose of the scheme was to ensure that the home purchase transactions closed, so that the defendants would receive substantial loan broker commissions and illegal kickbacks from real estate sales commissions.

Co-defendant James Roy Martin, 40, pleaded guilty to making false statements on a loan application and to money laundering on March 26, 2010. Mario Fellini III, 42, pleaded guilty to making false statements on a loan application on March 12, 2010. Joseph Salvatore Gallo, 38, pleaded guilty to misprision of felony on February 18, 2011. All are awaiting sentencing, and all are from the Sacramento area.

Immediately after the verdict, Judge Garcia remanded Viramontes into custody to await sentencing. He is scheduled to be sentenced by Judge Garcia on June 23, 2011. He faces a maximum sentence of 30 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

United States Attorney Benjamin B. Wagner announced the conviction.

U.S. Attorney Wagner said: “Prosecuting mortgage fraud cases is a very high priority with this office. This region was hard-hit by mortgage fraud during the real estate boom, and we are continuing to suffer the negative effects of that conduct. Presenting complex real estate transactions to a trial jury has its challenges, but I am pleased that the jury in this case had no trouble swiftly convicting Mr. Viramontes.”

This case is the product of an extensive investigation by the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, and the California Department of Real Estate. Assistant United States Attorneys Matthew C. Stegman and Michael D. Anderson prosecuted the case.

Allison Tussey

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