Gerry Zobrist, 43, Las Vegas, Nevada, a lawyer, pleaded guilty to federal felony conspiracy and fraud charges for his involvement in a mortgage fraud scheme that caused federally insured financial institutions to suffer losses of more than $30 million.
Zobrist pleaded guilty before U.S. District Judge James C. Mahan to one count of conspiracy to commit bank fraud and wire fraud, and is scheduled to be sentenced on April 15, 2013, at 10:00 a.m. Zobrist faces up to 30 years in prison and a $1 million fine.
According to the plea agreement, from about June 2006 to May 2008, Zobrist and unnamed coconspirators solicited and paid persons with good credit ratings to serve as straw buyers to purchase homes in the Las Vegas area on behalf of Zobrist and the coconspirators. Zobrist and the coconspirators made offers to purchase the homes, and the sellers agreed to disburse part of the sales proceeds to real estate companies, coconspirators and third party entities controlled by Zobrist and the coconspirators under the pretense that the proceeds constituted attorney’s fees, marketing fees, commissions, and other fees. Zobrist and the coconspirators caused to be completed and submitted mortgage loan applications and supporting documents in the name of the straw buyers, which contained false and fraudulent information concerning the straw buyers’ income, assets, liabilities, intended occupancy status, and other things.
Zobrist and the coconspirators also caused to be submitted to the lenders documents containing false information about the source of the down payments, value of the homes, and intended disbursements to Zobrist, the coconspirators, and straw buyers. Using this fraudulent scheme, Zobrist and the coconspirators purchased 144 homes and obtained mortgage loans for more than $53 million. Zobrist and the coconspirators defaulted on the mortgage loans causing the homes to go into foreclosure, and caused the financial institutions to suffer losses of at least $30 million.
Daniel G. Bogden, United States Attorney for the District of Nevada, announced the guilty plea.
“The U.S. Attorney’s Office in Nevada continues to work with the FBI and other federal and state law enforcement partners, to investigate and prosecute mortgage fraud crime,” said U.S. Attorney Bogden. “Over the last several years, almost 200 persons have been charged with federal mortgage fraud crimes in Nevada, and most of those have been convicted and are serving federal prison sentences.”
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Daniel R. Schiess and Sarah E. Griswold.
The announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.