Emerio Lima, DOB 3/25/1941, Miami, Florida, Inocencia Soto, DOB 12/28/1963, Miami, Florida, Pedro Fornos, DOB 12/14/1942, Miami, Florida, Josefa Herrera, DOB 3/19/1948, Miami, Florida, Stephen Zalka, DOB 2/14/1958, Parkland, Florida have been arrested for alleged involvement in a criminal mortgage fraud operation that defrauded several financial institutions collectively out of more than $4.5 million have been arrested. The individuals are facing charges of organized fraud, mortgage fraud and grand theft and will be prosecuted by the Attorney General’s Office of Statewide Prosecution.
The arrest warrants were issued following a 16-month investigation conducted by the members of Miami-Dade County Mayor Carlos Alvarez’s Mortgage Fraud Task Force, of which the Office of Statewide Prosecution is a member.
Those arrested are believed to be recruited straw buyers who, for a fee, would lend their names and credit to purchase numerous properties. These straw buyers were told they would not have to make any mortgage payments and that the properties would be flipped in a few months. Once the property was sold, the straw buyers would be paid once again. The scheme also included a certified public accountant who provided falsified employment verification letters on behalf of the straw buyers, at the request of co-conspirators. According to authorities, this individual never represented or met with these straw buyers.
With the straw buyers lined up, title agents prepared fraudulent HUD-1 statements on behalf of other co-conspirators, then provided the statements to the lenders. A HUD-1 settlement statement is a document which informs the lenders how disbursements will be made after a loan is funded. Some of the HUD-1 statements involved in this case contained inflated sales contract prices; others included fraudulently created liens.
Upon receiving the fraudulent HUD-1 statement, a lender would fund the loan based on the inflated sales price. The title agent, acting on behalf of the other co-conspirators, would then transfer the profits into a bank account of either a third party or a shell company controlled by one of the co-conspirators.
The arrest affidavit identifies nine properties which were used by the defendants to facilitate their scheme. These properties are located in Miami-Dade, Broward, Lee and Charlotte counties, and the majority of these properties are currently in foreclosure because of the nonpayment of the loans. The criminal investigation is ongoing and additional arrests are expected.