Sam Tuttle, a vice-president and loan officer at PC Bank Home Loans, Ben Leske, a loan officer at PC Bank Home Loans, Angela Crozier, a senior loan processor at PC Bank Home Loans, and Ed Rounds, a loan officer at PC Bank Home Loans, were indicted by a grand jury in the U.S. District Court for the Western District of Washington at Tacoma and charged with conspiracy to make false statements on loan applications and to commit bank fraud and bank fraud, .

According to the indictment, from 2004 through 2008, Tuttle, Leske, Crozier and Rounds, along with Shawn Portmann, a vice-president and loan officer at PC Bank Home Loans, Craig Meyer, a vice-president and loan officer at PC Bank Home Loans, and Alice Barney, Portmann’s personal assistant, and other co-conspirators, knowingly made false statements and willfully overvalued property for the purpose of influencing the actions of Pierce Commercial Bank and other federally insured financial institutions, in connection with applications for mortgage loans.  PC Bank Home Loans was a mortgage lending office of Pierce Commercial Bank. During the time they were employed at PC Bank Home Loans, the alleged conspirators originated in excess of 5,000 mortgage loans representing in excess of $1 billion in loan proceeds. The loans detailed in the indictment are alleged to have contributed to the failure of Pierce Commercial Bank.

The indictment alleges that the conspirators solicited individuals, including through mass marketing, who were seeking to purchase homes.  They were solicited to prepare and submit mortgage loan applications regardless of whether they might qualify for the loans. The co-conspirators caused loan applications to be prepared based upon fraudulent representations related to gross monthly income, employment status, rental status, assets and liabilities and whether the property would be used as a primary residence.  Sometimes the false statements were made with the knowledge of the borrowers and in other cases, the borrowers did not know the false statements were being inserted. If the borrowers did not qualify, co-conspirators would, at times, seek the assistance of Portmann and other co-conspirators for advice on how to falsely modify the loan applications to ensure they passed underwriting.  Among the assistance provided by Portmann was the use of his assistant, Barney, to provide a Verification of Rent form for inclusion in the loan package, that falsely asserted the borrower was paying rent for an apartment owned by Portmann when, in fact, the borrower was not residing in, and had never resided in, the apartment.

The indictment further alleges that the co-conspirators would collude with third parties, including appraisers, to ensure the loans successfully closed.  The co-conspirators would pressure appraisers to generate specific values, even when told that the values were not supported by appraisal methods.

The indictment also alleges that when there were defaults on loans that were sold into the secondary market, the co-conspirators would take steps to ensure that Pierce Commercial Bank and the secondary investors did not discovery the underlying fraudulent statements.  The efforts included Portmann, Tuttle and Meyer forming a separate company to buy defaulted loans back from secondary investors so that no further investigation would be done on the defaulted loans.

According to the indictment, the fraudulent scheme caused in excess of $9.5 million in losses to Pierce Commercial Bank, secondary investors and HUD/FHA.

Albert William Roberts III, 68, Lee’s Summit, Missouri, was sentenced to four years in federal prison without parole in connection with his role in a $3.7 million mortgage fraud scheme. U.S. District Judge Brian C. Wimes also ordered Roberts to pay $1,992,221 in restitution.

On May 13, 2016, Roberts was found guilty at trial of four counts of wire fraud. Roberts, a retired Kansas City, Missouri., school teacher, obtained a total of $3,758,420 from mortgage lenders and title companies from 2002 to 2007 for the purchase of a dozen properties from Penrod Homes, Inc. – three properties in Lee’s Summit, Missouri, six properties in Peculiar, Missouri, and three properties in Greenwood, Missouri. Most of the homes were priced in the upper $100,000 or lower $200,000 range; the most expensive was a home on about two acres for $1.3 million.

Although Roberts was found guilty of wire fraud specifically in connection with two of those transactions, evidence introduced during the trial indicated that Roberts’ fraud extended to 10 additional properties. Roberts obtained all 12 mortgage loans by material false and fraudulent representations and omissions of facts. He structured the purchases of the homes in such a way that he received $807,203 in kickbacks that were not disclosed to the lenders.

The sentenced was announced by Tammy Dickinson, United States Attorney for the Western District of Missouri. The case was prosecuted by Senior Litigation Consultant Gregg R. Coonrod and Assistant U.S. Attorney Kathleen Mahoney. It was investigated by the FBI.

Drew Alia, 40, Philadelphia, Pennsylvania, pled guilty to an Information which charged him with willfully failing to file federal income tax returns for tax years 2010 through 2013 before United States District Court Judge Paul Diamond.

Alia, an attorney, according to the Information, operated a home mortgage rescue service which was designed to assist home owners who were facing foreclosure to secure financing in order to prevent a home mortgage foreclosure. The Information alleged that Alia realized gross income of $28,000 in 2010; $107,000 in 2011, $144,000 in 2012, and $71,000 in 2013 all of which he failed to report on federal income tax returns that he was required to file in each of the aforementioned years.

As we begin the 2017 filing season, American taxpayers are reminded that the term voluntary compliance means that each of us is responsible for filing a tax return when required and for paying the correct amount of tax,” said Internal Revenue Service Criminal Investigation Acting SAC Gregory Floyd. “That responsibility should not be taken lightly. Mr. Alia chose to ignore his duty to file and pay taxes; thus he must be held accountable for his actions.”

Alia faces a maximum of 4 years of imprisonment, a fine of up to $400,000 and 1 year of supervised release when he sentenced.

The plea was announced by acting United States Attorney Louis D. Lappen.The case was investigated by Internal Revenue Service’s Criminal Investigation Division Philadelphia Field Office and is being prosecuted by Assistant United States Attorney Floyd J. Miller.

Ross D. Pickard, 63, Naples, Florida, was indicted and charged with one count of conspiracy and three counts of loan and credit application fraud.

According to the indictment, Pickard was a senior loan officer at JP Morgan Chase Bank. He conspired with others in a scheme to defraud the bank by completing, certifying, and submitting mortgage loan applications on behalf of borrowers that contained false and fraudulent statements. The false statements included, but were not limited to, false occupancy, overinflated income and assets, as well as the understated liabilities. By relying on Pickard’s false and fraudulent statements on the loan applications, JP Morgan Chase was induced into funding mortgage loans for otherwise unqualified borrowers.

If convicted, he faces up to 5 years in federal prison for the conspiracy count and up to 30 years on each of the fraud counts. The indictment also notifies him that the United States is seeking a money judgment for the proceeds of the charged criminal conduct.

United States Attorney A. Lee Bentley, III announced the indictment.  The case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the Internal Revenue Service – Criminal Investigations Division. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

Timothy W. Burke, also known as “Bill Burke,” “William Burke,” “Kerry Saunders,” “Pat Riley,” “Jim Caldwell,” “Jim Saunders,” “Tom Morrisey,” “Jimmy,” “Phil Burke,” “Phil,” “Burt,” “James Burke,” and “M. Soler,” 65, formerly of Easton, Connecticut, plead guilty before U.S. District Judge Michael P. Shea in Hartford, Connecticut, to fraud and tax evasion offenses stemming from a long-running fraud scheme that targeted distressed homeowners.

According to court documents and statements made in court, between approximately 2010 and November 2015, Burke engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development (HUD) by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third party authorization letters, which Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership. Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that Burke owned the property.

Burke or one of his agents then collected rent from tenants, in person, and Burke used the funds for his own benefit. Burke failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowner’s mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.

Burke undertook extensive efforts to disguise his true identity, and hide his criminal past, from his victims through the use of multiple aliases and business entities, and to conceal the sources of and expenditures from his criminal proceeds. Burke has been associated with multiple entities, including Quality Asset Management Services, LLC; Birmingham Investments, LLC; the Birmingham Group of Companies; Saunders Associates; New Haven Investments; Realty Partners Group; Preston Associates II; Landlord Maintenance Services, LLC; Turnkey Construction Services LLC; The Complete Handyman, LLC; and Woodbridge Associates.

In addition, between 1994 and 2012, Burke evaded paying approximately $403,726 in federal taxes.

In 2002, Burke was indicted by a federal grand jury in New Jersey on charges of conspiracy, mail fraud, and equity skimming. Burke subsequently pleaded guilty to conspiracy to commit both equity skimming and mail fraud, and he was sentenced to 60 months in prison, followed by three years of supervised release. Burke was released from federal custody in approximately August 2007 and began his federal supervised release at that time. One of the special conditions of Burke’s supervised release was that he refrain from employment in the real estate business or mortgage industry. Based on his motion for early termination of his supervised release, the New Jersey federal court terminated his supervised release approximately one year early in August 2009.

Burke pleaded guilty to one count of mail fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years. Judge Shea scheduled sentencing for April 18, 2017.

Burke has been detained since his arrest on November 19, 2015.

The guilty plea was announced by Deirdre M. Daly, United States Attorney for the District of Connecticut. The matter is being investigated by Internal Revenue Service – Criminal Investigation Division, the U.S. Department of Housing and Urban Development – Office of Inspector General, and U.S. Postal Inspection Service, with the critical assistance of the Middletown, Plainville, Easton and Coventry Police Departments, the Connecticut State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The case is being prosecuted by Assistant U.S. Attorneys David T. Huang and Sarah P. Karwan.

James Bayfield, 44, Queens, New York, a self-described mortgage specialist, was convicted by a federal jury in Brooklyn, New York, on all four counts charging bank fraud and conspiracy to commit wire fraud and bank fraud for his role in defrauding mortgage lending institutions and large financial institutions, including Amtrust Bank (Amtrust), Bank of America N.A. (BOA) and J.P. Morgan Chase & Co. (Chase), in a multi-million-dollar mortgage fraud scheme. The jury’s verdict followed a two-week trial before United States District Judge Eric N. Vitaliano. Bayfield is the sixth and final defendant convicted in the case.

The evidence at trial established that Bayfield, together with others, caused mortgage loan applications with false information to be submitted to lending institutions in connection with the purchase of residential properties located within the Eastern District of New York. These applications contained fraudulently inflated purchase prices, as well as false information about the assets and income of the purchasers of the properties, many of whom were being compensated as part of the scheme to act as straw purchasers. The defendant and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and the other borrowers had made down payments in connection with the purchase of the properties, which was a condition of the lending institutions for issuing the mortgage loans.

To carry out their scheme, the defendant conducted simultaneous purchases and sales of the properties, sometimes called “flips,” in an effort to conceal their criminal involvement and to inflate the value of the properties. For example, a conspirator would purchase a property from a homeowner. That same day, the conspirator would sell the property to a straw purchaser at an inflated value. The defendant and his conspirators, through the use of backdated and falsified documents, concealed from the lending institutions the fact that the purchase and sale had occurred on the same day and made it appear as if the transaction between the homeowner and the conspirator had occurred over 60 days prior to the sale from the conspirator to the straw purchaser.

As a result of the false applications and appraisals, the lending institutions were fraudulently induced to issue millions of dollars of mortgage loans secured by properties that had inflated appraisal values to individuals who had insufficient income and assets to qualify for the mortgage loan. In many instances, the straw purchasers and the other borrowers failed to make required mortgage payments to the lending institutions, which caused the mortgage loans to be placed into default status.

When sentenced by United States District Judge Eric N. Vitaliano, Bayfield faces a sentence of up to 20 years in prison.

The guilty verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers thanked the Federal Bureau of Investigation (FBI); the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG); the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); and the New York State Department of Financial Services (DFS) for their hard work and dedication over the course of this multi-year investigation and prosecution.The government’s case was prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys David Pitluck, Mark Bini and Michael Keilty are in charge of the prosecution.

 

Guadalupe Artemio Gomez, 31, Luis Antonio Rodriguez, 36, and Rogelio Ramos Jr., 36, all of the Rio Grande Valley, Texas, were charged in a criminal complaint with federal wire fraud arising out of a fraudulent mortgage lending scheme.  The criminal complaint was filed under seal on January 12, 2017. Authorities arrested Gomez and Ramos the following day, at which time they made their initial appearances before U.S. Magistrate Judge Ignacio Torteya. The case was unsealed in its entirety after Rodriguez, who was previously incarcerated on unrelated charges, was taken into federal custody. He made his initial appearance before Peter Ormsby and ordered to remain in custody pending further criminal proceedings.

The charges allege they all operated a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The defendants allegedly offered these individuals financing at a rate of 8.5 percent interest on the principal for a 20-year-term if they could afford a 10 percent down payment on the house of their choice.

Gomez, Rodriguez and Ramos allegedly conducted business in the area of San Antonio, Texas, by recruiting realtors to funnel prospective home buyers to Infinite Properties. According to the charges, part of the scheme involved sending fraudulent bank account information through email correspondence to the realtors in order to create the appearance that Infinite Properties had millions of dollars in its accounts to finance the purchase of houses. Based on these false accounts, realtors allegedly introduced home buyers in need of second chance financing to Infinite Properties.

The criminal complaint alleges buyers entered fraudulent purchase agreements for properties they selected. These buyers made down payments to Infinite Properties to be used toward the purchase of their intended properties and were told closings would occur within 45-60 days, according to the charges.

The charges allege, however, that closings did not occur and the payments were never used for the purchases of the properties. In August 2016, Infinite Properties allegedly ceased to do business and the victims never received their money back.

If convicted, the defendants all face up to up to 30 years in federal prison and a possible $1 million fine.

U.S. Attorney Kenneth Magidson made the announcement. The FBI investigated the case along with police departments in McAllen, Mission and Edinburg. Assistant U.S. Attorney Robert L. Guerra Jr. is prosecuting the case.

Marco Laureti, 45, Sunny Isles Beach, Florida, and Felix Mostelac, 44, Miami Beach, Florida, were charged by Indictment with one count of conspiracy to commit wire fraud affecting a financial institution, and multiple counts of wire fraud affecting a financial institution. Michelle Cabrera, 48, Miami Lakes, Florida, and Pedro Melian, 39, Hialeah, Florida, were charged by criminal Information with one count of conspiracy to commit wire fraud affecting a financial institution. If convicted, each defendant faces up to thirty years’ imprisonment on each charged count.

According to court documents, defendants Laureti, Mostelac, Cabrera and Melian were involved with a $10 million mortgage fraud scheme. Laureti was a former newspaper publisher and owner of Laureti Publishing Company, in addition to being a licensed real estate sales associate and mortgage broker. Mostelac was Laureti’s associate and also the owner of several companies. Cabrera owned Florida Elite Title & Escrow in Davie, Florida, and served as the title agent for these transactions. Melian also owned several companies.

According to court documents, the defendants engaged in a fraud scheme involving a condominium complex located at 45 Hendricks Isle, Fort Lauderdale, Florida. Defendants Laureti, Mostelac and Melian made false and fraudulent statements to a financial institution on loan applications and closing statements for the multi-million dollar condominiums. Once the loans were approved, defendant Cabrera, at Laureti’s direction, diverted the loan proceeds to fund the cash the borrower was expected to bring to the property’s closing, as well as diverting additional monies from the loan proceeds to various companies owned by Laureti and Mostelac. Furthermore, according to court documents, Laureti and Mostelac utilized the same scheme on the loan applications and closing statements to purchase their own multi-million dollar residential properties in Miami Beach, in addition to Laureti directing Cabrera to divert funds. The defendants’ scheme defrauded the financial institution of approximately $10 million.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.Mr. Ferrer commended the investigative efforts of the FBI. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.

Cecil Sylvester Chester, 70, Mitchellville, Maryland was sentenced to two years in prison, followed by three years of supervised release, for a mortgage fraud scheme involving the fraudulent purchase of seven properties in Baltimore, Maryland using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.4 million.

Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland.  Co-conspirator Andreas E. Tamaris, 46, Bel Air, Maryland,   purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in the Highlandtown area. Co-conspirators Michael Gerard Camphor, 60, Baltimore, Maryland, was a real estate agent and Christopher A. Kwegan, 59, Randallstown, Maryland,was a real estate agent and general contractor.

According to his guilty plea, from February 2008 to July 2009, Chester and his co-conspirators, found buyers for Tamaris’ properties and for other property owners. Chester persuaded individuals, who were inexperienced with residential real estate transactions and who lacked the funds needed to pay the down payment and closing costs, to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators. Chester advised these “straw purchasers” that they didn’t need to contribute funds for the down payment or closing costs to buy these properties. Chester also advised that he would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester would collect the rent and make the mortgage payments.

Chester and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit.  For example, when Kwegan located a house he wanted to sell, he sought assistance from Chester and real estate agent/consultant Camphor, who were already operating a mortgage fraud scheme. Chester, Kwegan and Camphor set the price of a row house in Baltimore at $250,000, rather than the actual market price of approximately $75,000. Kwegan derived over $100,000 in proceeds from the sale of this home to a straw purchaser and paid another $40,000 to Chester for his assistance.

Chester, Camphor, and others recruited buyers to purchase houses, knowing that they did not qualify for the home mortgages.  The conspirators provided false information about the straw purchasers’ employment, income and financial assets, as well as fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.

Chester brought the straw purchasers to the closing, and then caused the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed.  Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.

Few, if any, payments were made towards the mortgages.  The seven properties in which Chester was involved all went into foreclosure, resulting in a loss of at least $1.483 million.

Chester was sentenced by U.S. District Judge James K. Bredar. Judge Bredar also ordered Chester to pay restitution of at least $1.483 million, with the exact amount to be determined by the Court.

In related proceedings, Tamaris, Camphor, Kwegan, and Alexander Sivels, II, 32, Baltimore, Maryland, previously pleaded guilty to their roles in this, or related mortgage fraud schemes.  Tamaris was sentenced to 15 months in prison and was ordered to pay $1,229,206.28 in restitution.  Sivels and Kwegan were each sentenced to 27 months in prison.  Judge Bredar ordered Sivels to pay restitution of $1,317,314.35, and ordered Kwegan to pay restitution of $530,641.27. Camphor is scheduled to be sentenced on December 19, 2016.

The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation; Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service – Baltimore Field Office.

United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG – Office of Investigations and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.

Dianna F. Woods, 59, Citrus Heights, California, was found guilty after a four–day trial, a federal jury found day of four counts of making false statements on loan applications.

According to evidence presented at trial, Woods was a licensed real estate salesperson who worked at a company called VLD Realty, doing business as Trade House USA, in the Sacramento, California, area. VLD built and sold houses in residential developments in Sacramento, Carmichael, and Copperopolis, California. As the housing market began to weaken from 2006 through 2008, VLD sought to sell the houses by offering incentives to buyers. VLD offered to pay the down payment or offered to give the buyers money after the sale, neither of which was disclosed to the lenders. For her part, Woods purchased two houses based on the undisclosed kickbacks. Further, for the purpose of obtaining loans to purchase the properties, Woods signed and submitted loan applications and other documents that contained false statements as to Woods’s income, employment, assets, the purpose of the property, the sales price, and whether the down payment was borrowed. Woods also assisted another buyer in making false statements to the lenders to get loans for the purchase of two properties in the housing developments and falsely verified his employment.

To date, six other defendants have been found guilty or have pleaded guilty in three related cases.

Woods is scheduled to be sentenced by United States District Judge William B. Shubb on February 27, 2017. Woods faces a maximum statutory penalty of 30 years in prison and a $1 million fine on each count.

The verdict was announced United States Attorney Phillip A. Talbert.  This case is the product of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Shelley Weger and Todd Pickles are prosecuting the case.