The Department of Justice’s Consumer Protection Unit (CPU) has reached a settlement on Tuesday with two California-based companies requiring them to stop advertising and selling mortgage loan modification and debt relief services in Delaware and to provide restitution to Delaware consumers.

In the cease and desist agreement, CPU alleges that Roosevelt Law Center, P.C. and Miracles for Homeowners Marketing, Inc., and their principals, Thomas Moore and Benjamin Borazghi, operated a foreclosure rescue scam targeting Delaware homeowners. According to CPU, Roosevelt and Miracles targeted Delaware homeowners struggling to make their mortgage payments with over 1,000 deceptive flyers, and collected thousands of dollars in upfront fees from Delawareans who responded. CPU alleges that the “services” purportedly provided by these companies had little or no value, and a number of homeowners ultimately lost their homes to foreclosure.

Under the cease and desist agreement, Roosevelt, Miracles, Moore, and Borazghi are required to pay restitution of $22,275 to nine Delaware homeowners, in addition to $70,000 in civil penalties. The agreement also prohibits the companies and their principals from directly or indirectly offering any mortgage loan modification or debt relief services in Delaware going forward.

Common tactics used by foreclosure rescue scammers include “guarantees” to save someone’s home or to secure a loan modification, requests for upfront fees, and misleading statements regarding affiliation with government agencies. Delaware’s Mortgage Loan Modification Services Act makes it unlawful for a mortgage loan modification service provider to collect fees from a homeowner prior to obtaining a modification from the homeowner’s loan servicer. Under the Act, all providers must register with the Delaware Department of Justice, and are required to disclose certain information in their advertising to homeowners.

Attorney General Kathy Jennings made the announcement.

People who are trying to save their homes are living through a nightmare, often amid other serious hardships,” said Attorney General Jennings. “There are real programs that can offer these homeowners hope, including programs within the Department of Justice, but the ugly truth is that many scammers see opportunity in others’ misfortune. My office is here to help homeowners facing foreclosure, and we will not tolerate the despicable scams that prey on our most vulnerable residents.

Homeowners who wish to report a foreclosure rescue scam should contact CPU at (800) 220-5424. Legitimate foreclosure prevention programs are also available through CPU’s Office of Foreclosure Prevention, including Delaware’s Residential Mortgage Foreclosure Mediation Program. More information is available at de.gov/consumer.

CPU’s work in this matter was handled by Deputy Attorney General David Weinstein and former Deputy Attorney General Gillian Andrews, with assistance from Special Investigator Joe Rago and Paralegals Ryan Martin, Kelly Drzymalski, and Shannon Faulk.

 

Mark Savransky, 59, Dix Hills, New York, was sentenced on Thursday to three to six years in prison for scamming 32 homeowners out of more than $600,000 in a mortgage modification scheme

According to documents, the defendant operated a mortgage modification business in Nassau County, New York, using the name Mark Savran. Between 2008 and 2014, he promised 32 homeowners in Nassau County and elsewhere that, after securing modifications, he would hold their mortgage payments in trust and forward them to the financial institutions servicing the homeowners’ mortgages.

Instead, the defendant converted the funds for personal use, stealing approximately $601,546.92 from these homeowners. Savransky used the funds for ATM cash withdrawals, credit card payments, child support, car payments, gasoline, travel expenses, restaurants, grocery stores, department stores and Netflix.

Savransky’s clients were typically residential homeowners who had purchased their homes using a subprime adjustable rate mortgage sometime between 2006 and 2009. When the payments became more than the homeowner could afford, homeowners hired the defendant to assist in obtaining a mortgage modification.

Savransky requested that all paperwork from the bank be given to him and if additional paperwork was sent by the bank to the victim, he demanded that it be given to him immediately, preferably unopened.

The defendant then counseled clients to give him the monthly mortgage payment that was due under the modified mortgage. Savransky informed his clients that he would make the payments on their behalf and, in doing so, create a record of payment that would prevent a lender from denying that payments were made or from reneging on any mortgage modification that was obtained. At the defendant’s request, these payments were mostly made in cash or by check that did not include the payee. Savransky later completed the payee portion of the check, thereby giving him the means to misappropriate the funds.

Because the mortgage payments weren’t made, lenders started to foreclose on the properties belonging to the defendant’s clients. When some of the homeowners complained to him, some of them received a limited amount of repayment.

Savransky pleaded guilty on October 9, 2018 before Supervising Judge Teresa Corrigan to two counts of Grand Larceny in the Second Degree (a C felony) and Scheme to Defraud in the Second Degree (an A misdemeanor).

The defendant must also pay $601,546.92 in restitution.

The defendant was arrested in August 2015 by NCDA detective investigators and arraigned on grand jury indictment charges in October 2017.

Nassau County District Attorney Madeline Singas made the announcement.

Today’s sentence sends a strong message to those who would prey on vulnerable homeowners during tough financial times in their lives,” DA Singas said. “Victims were close to losing their homes because of this defendant’s scheme and lies. I am grateful to our partners in Suffolk County District Attorney’s Office, the Suffolk County Police Department and the Bronx District Attorney’s Office for their assistance on this case.”

This case was initially referred to the Nassau County District Attorney’s Office by the Bronx County District Attorney’s Office. Additional cases were also referred by the Suffolk County District Attorney’s Office in conjunction with the Suffolk County Police Department.

Savransky’s victims include residents from Amityville, Baldwin, Bayside, Brentwood, the Bronx, Brooklyn, East Northport, Farmingdale, Hempstead, Hicksville, Huntington, Levittown, Lynbrook, Malverne, Merrick, Mount Vernon, New Hyde Park, Queens Village, Richmond Hill, Riverhead, Uniondale and Westbury, New York.

Deputy Bureau Chief Peter Mancuso of DA Singas’ Financial Crimes Bureau is prosecuting this case. Joseph Conway, Esq. represents the defendant.

Angela Fawn Wallace, aka Leah Denise Williams, West Hills, California 58, who has been already been accused of bilking millions of dollars from elderly property owners and two others have been charged today in a real estate fraud case.

In 2015 and 2016, the defendants are accused of creating fraudulent deeds in order to illegally take out a loan against a Los Angeles, California home and later sell it.

Wallace also allegedly created false deeds for two other Los Angeles residential properties in 2015 and then in 2018 illegally signed deeds of trust on the residences as collateral for her bail in another fraud case, the prosecutor said.

Wallace was charged in case BA479339 with 68 felony counts, including identity theft, forgery relating to identity theft, procuring and offering false or forged instrument, counterfeit seal, grand theft and money laundering.

Co-defendants Charlesetta Brown, aka Barbara Brown, 68, Los Angeles, California and David Jayson Greene, aka Damian Dave Brown, 45, Los Angeles, California face 54 felony counts.

The charges for all three defendants include allegations of taking more than $100,000 through fraud and embezzlement and having prior felony convictions. The case was filed for warrant on July 12, 2019.

Brown pleaded not guilty today at an arraignment hearing. Wallace and Greene pleaded not guilty earlier this week. Bail for Wallace was set at $1.61 million and for Brown and Greene at $1.27 million each.

A bail review hearing for the three defendants is scheduled for July 24, 2019 followed by a preliminary hearing on July 29, in Department 30 of the Foltz Criminal Justice Center.

The crimes allegedly resulted in a loss of more than $400,000.

Wallace faces a possible maximum sentence of 41 years in state prison if convicted as charged. Brown and Greene each face up to 35 years and eight months in prison.

The Los Angeles County District Attorney’s Office made the announcement today.

The case remains under investigation by the Los Angeles Police Department and the District Attorney’s Bureau of Investigation.

Wallace previously was charged in cases BA474533 and BA468922 with a total of 162 felony counts, including grand theft, identity theft, forgery and money laundering. Those charges include special allegations of taking of more than $200,000 and prior convictions.

If convicted as charged in those two cases, she faces a possible maximum sentence of 81 years and 10 months in state prison.

 

Daniel Badu, 56, New City, New York, was convicted today of conspiring to commit mail and wire fraud affecting a financial institution.

Between 2008 and 2009, the defendant conspired with others to defraud The Funding Source (“TFS”), a mortgage bank, and other financial institutions by submitting fraudulent applications for home loans.  After being originated by TFS, the loans were sold to other financial institutions, including M&T Bank and JPMorgan Chase. http://www.mortgagefraudblog.com/?s=Daniel+Badu

The co-conspirators in this case submitted fraudulent applications for loans on eight properties in Bronx, New York. They fraudulently obtained mortgages that were insured by FHA on behalf of unqualified borrowers, such as the defendant. Badu was the purchaser on two of the properties and he aided in the submission of false documentation as part of the loan application, including documents purporting to show income from a fake job. The defendant also backstopped false employment for another loan, pretending that the borrower worked for his ophthalmology company, Eagle Eyes, which in reality was a shell company that performed no business.
The total loan amount for these eight transactions was $4,800,007.

In total, six defendants have pleaded guilty for their roles in this fraud. Attorney Laurence Savedoff, Esq. pleaded guilty to a misprision of a felony and was sentenced to four months in prison. Realtor and appraiser Julio Rodriguez pleaded guilty to mail and wire fraud affecting a financial institution, and a conspiracy to do the same, and was sentenced to six months in prison. Sentencing hearings are pending for mortgage broker Gregory Gibbons, and realtors Tina Brown and Alagi Samba.

Badu was sentenced to time served and 10 months home detention.

Attorney James P. Kennedy, Jr. made the announcement.

The sentencing is the culmination of an investigation by the United States Postal Inspection Service under the direction of Joseph W. Cronin, Inspector-in-Charge, Boston Division; the United States Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent-in-Charge Brad Geary; and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.  Additionally, the New York State Department of Financial Services assisted with the investigation.

Jared Castellaw, 34, Alpine, California, and Valerie Schones, 54, Tucson, Arizona, were sentenced on Wednesday, July 17, 2019 for their role in making false statements to a financial institution.

According to court documents, beginning in or around October 2008 and continuing to on or about May 2009, Castellaw and Schones, along with co-defendant Patrick Healey, made false statements to the Federal Housing Administration “FHA” in order to assist low-income borrowers in qualifying for FHA insured loans that they would not otherwise have qualified for. Healey and Castellaw are former employees of an undisclosed entity, ABC Homes, LLC, located in St. Bernard Parish, Louisiana.  Schones worked for XYZ Financial as a loan officer. In total, due to the acts of the defendants, the FHA suffered a loss in excess of $852,415.

Both Castellaw and Schones were sentenced to time served, supervised release of 5 years, a special assessment of $100, and ordered to pay restitution in the amount of $852,415.16.

U.S. Attorney Peter G. Strasser made the announcement.

U.S. Attorney Strasser praised the work of the Department of Housing and Urban Development, Office of Inspector General and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Sharan E. Lieberman and Edward J. Rivera.

Penny Bradley, 54, New York, New York, a real estate developer, was indicted today for residential mortgage fraud in which Bradley forged member signatures to illegally obtain millions of dollars. Bradley is charged with Residential Mortgage Fraud in the First Degree, Grand Larceny in the Second Degree, and two counts of Forgery in the Second Degree and Criminal Possession of a Forged Instrument in the Second Degree.

According to the indictment and documents filed in court, from 2014 to 2016, Bradley violated her duties as the managing member of 46 East 82nd Street LLC and stole company funds for personal expenses and unrelated business ventures. Bradley also used company property as collateral to obtain a loan for unrelated real estate investments, and forged member signatures to refinance debt encumbering the townhouse.

In March 2014, 46 East 82nd Street LLC was formed to acquire, renovate, and sell a townhouse located at 46 East 82nd Street. Bradley was the sole member of Norfolk Street Management LLC, the managing member of 46 East 82nd Street LLC. In that capacity, Bradley was solely responsible for managing the renovation and potential sale of the townhouse and safeguarding company money and property, including funds invested by members of 46 East 82nd Street LLC and two loans from Alpine Capital Bank.

Between 2014 to 2016, Bradley stole over $500,000 from 46 East 82nd Street LLC to pay for personal expenses and unrelated business debts. Personal expenditures included rent payments, vacations, monthly payments on her auto loan for her Range Rover, and monthly parking garage fees.

In 2015, Bradley obtained a personal loan from Global Payment Services Limited (“GPS”) to invest in unrelated real estate projects. To procure the loan, Bradley agreed to allow GPS to record a lien against the 46 East 82nd Street townhouse if she failed to pay $2.6 million by its maturity date. Subsequently, Bradley defaulted on the loan and GPS recorded a mortgage against the townhouse.

In 2016, Bradley attempted to refinance the GPS mortgage by encumbering the townhouse with a junior mortgage from Atlas Union Corp (“Atlas”). Atlas and First American Title Insurance Company (“First American”), the title insurance company insuring the loan, required the defendant to obtain a new company operating agreement executed by all the members of the company. In August 2016, Bradley falsely claimed that all the members were contacted and requested to close on the Atlas loan without submitting the new operating agreement; Atlas denied the defendant’s request.

Thereafter, in late August 2016, Atlas agreed to refinance the existing loans from both Alpine and GPS with a loan for $11.5 million to 46 East 82nd Street LLC. However, to obtain this loan, Atlas required the defendant to get written consent of a majority in interest of members of 46 East 82nd Street LLC.

In September 7, 2016, the defendant emailed her attorney the “Consent of Majority in Interest of Members of 46 East 82nd Street LLC” and its six signatures pages for purposes of closing on the Atlas loan. The signature pages included forged signatures of two LLC members. Two days later, on September 9, 2016, the defendant signed the required documents on behalf of 46 East 82nd Street LLC and certified as to the validity of the signatures on the Consent of Majority in Interest of Members of 46 East 82nd Street LLC document to close on the Atlas loan of $11.5 million.

In December 2017, the Atlas loan matured and 46 East 82nd Street LLC defaulted on the loan.

Bradley has been charged with

  • Residential Mortgage Fraud in the First Degree, a class B felony, 1 count
  • Grand Larceny in the Second Degree, a class C felony, 1 count
  • Forgery in the Second Degree, a class D felony, 2 counts

Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, 2 counts

The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court, including the indictments, and statements made on the record in court.

Manhattan District Attorney Cyrus R. Vance, Jr. made the announcement.

As alleged, Penny Bradley cashed in on her insider position and stole company funds to support her lavish lifestyle,” said Manhattan D.A. Cy Vance, Jr. “My Office is dedicated to protecting the integrity of our City’s residential mortgage market and holding those who attempt to undermine it criminally responsible.

Assistant D.A. Jaime Hickey-Mendoza is handling the prosecution of this case under the supervision of Assistant D.A.s Judy Salwen, Principal Deputy Chief of the Rackets Bureau; Michael Ohm, Deputy Bureau Chief and Jodie Kane, Chief of the Rackets Bureau, as well as Executive Assistant D.A. Michael Sachs, Chief of the Investigation Division. Supervising Financial Investigator Wei Man Tang assisted with the investigation, under the supervision of Irene Serrapica, Deputy Chief of FAFI, and Robert Demarest, Chief of FAFI. Supervising Rackets Investigator Donato Siciliano, Rackets Investigator Samuel Morales, and paralegals Madeleine Lippey and Maximilian Perkins also assisted with the case.

 

Jorge Flores, 48, Oakdale, New York; Joseph A. Gonzalez, 45, Henderson, Nevada; and Jose L. Piedrahita, 57, and Yorce Yotagri, 52, both of Freeport, New York, have been indicted for carrying out a scheme to use phony information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit (HELOCs).

According to documents filed in the case and statements made in court:

From 2010 through 2018, Flores and Simon Curanaj, a real estate broker in the Bronx, New Yourk who has previously pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.

For instance, Gonzalez and Flores used a property in Jersey City, New Jersey, as part of the scheme. Gonzalez had been allowed to live at the property by the owner in exchange for management services, but neither he nor Flores owned the property. Gonzalez also recruited an individual with good credit to act as a straw buyer (Individual 1). Later, unbeknownst to the owner of the property, a “quitclaim” deed – a deed which contains no warranties of title – was prepared transferring the property to Individual 1. The signatures on the deed were forged.

Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City property as collateral in Individual 1’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Individual1’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the property was less than the amount of the HELOC loans for which Gonzalez and Flores applied.

The victim banks eventually issued loans to Individual 1 in excess of $500,000. After the victim banks funded the HELOCs and deposited money into Individual 1’s bank account, Individual 1 disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Individual 1 eventually defaulted on both HELOC loans.

In another example, Flores, Piedrahita, and Yotagri used a property in Freeport, New York, to carry out a similar scheme.

Each defendant is charged by indictment with one count of conspiracy to commit bank fraud. Flores and Gonzalez are also charged with two substantive counts of bank fraud. Yotagri was arraigned July 8, 2019, before U.S. District Judge John Michael Vazquez in Newark federal court. Flores and Piedrahita remain at large. Gonzalez will be arraigned at a date to be determined.

The conspiracy to commit bank fraud and substantive bank fraud counts carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross pecuniary gain to the defendants or twice the gross pecuniary loss to others, whichever is greater.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the U.S. Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presume innocent unless and until proven guilty.

 

Min Jin Zhao, a/k/a Michael Zhao, a/k/a Michael West, 56, San Francisco, California, a real estate agent has been indicted on charges of wire fraud, mail fraud, and money laundering.

According to the indictment filed May 9, 2019, and unsealed today, Zhao, defrauded his clients out of down payments meant for the purchase of homes in and around the Bay Area.  From 2014 through 2015, Zhao misrepresented to prospective homebuyers and investors that Portfolio Consulting, Inc., offered a loan program that would enable his clients to procure financing to make all-cash offers on real property.  Zhao told his victims that, as part of the loan program, they had to wire, transfer, or deposit 10% to 20% of the sale price of the real property they sought to purchase into Portfolio’s bank account.  According to the indictment, Zhao told his clients that once they delivered their funds to Portfolio, the company then would provide the remaining portion of the purchase price.  In reality, however, after Zhao’s victims deposited their funds into Portfolio’s account, Zhao either spent the funds or transferred the funds to another bank account in Portfolio’s name.  Further, Zhao used the funds to make purchases unrelated to the purchase of real property for the victims, including for purchases for Zhao’s benefit and the benefit of businesses he controlled.  In sum, Zhao is charged with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of money laundering, in violation of 18 U.S.C. § 1957.

Zhao was arrested in San Francisco, California on July 2, 2019, and made his initial federal court appearance this morning in Oakland, California.  Zhao is currently out on bond.  His next scheduled appearance is on September 11, 2019, at 10:30 a.m., for an initial appearance before the Honorable James Donato, U.S. District Judge.

The announcement was made by United States Attorney David L. Anderson; Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter; and Federal Bureau of Investigation (FBI) Special Agent In Charge John F. Bennett.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Zhao faces a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution for each violation of wire and mail fraud, as well as 10 years in prison and a fine of $250,000, plus restitution for the money laundering count.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Jose Apolinar Olivera is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Katie Turner.  The prosecution is the result of an investigation by the IRS-CI and the FBI.

 

Phillip Yoder, 41, Ligonier, Indiana, was sentenced on his guilty pleas to wire fraud, bank fraud, mail fraud and bankruptcy fraud.

According to his plea agreement, beginning in or about 2014 and continuing until in or about July 2015, Yoder and others, sometimes working through the entity, KOH Enterprises, LLC, defrauded persons via a “Foreclosure Rescue Scheme.” As part of the scheme to defraud, Yoder and others monitored foreclosure notices of properties, and would then approach distressed homeowners and convince them to transfer title of the property in exchange for false promises of being able to avoid further foreclosure obligations. They falsely represented to these homeowners that they would handle their mortgage arrearages and the foreclosure process.  Because of these false representations, the homeowners vacated the property and transferred their interest in the property through a Quitclaim deed to business entities. Those entities then furthered the scheme by recording the Quitclaim at the local Recorder’s Office. However, the Quitclaim deed did not extinguish the homeowner’s outstanding mortgage debt.  Yoder and others would use the mail to send a fraudulent document, entitled an “International Promissory Note”, purporting to satisfy the outstanding mortgage debt to the financial institution holding the mortgage.  Simultaneously, Yoder and others would cause a fraudulent “Satisfaction of Mortgage” to be filed with the county recorder’s office in an attempt to discharge the mortgage.  They would then convey another Quitclaim deed to an investor or purchaser of the properties, even though the property was still encumbered.   The total loss to investors and insurers was $1,466,136.20.

With regard to the bankruptcy fraud, which resulted from a referral by the U.S. Trustee for Region 10, according to his plea agreement, on or about February 24, 2016, Yoder knowingly and fraudulently made a material false declaration, certificate and verification under the penalty of perjury in his bankruptcy proceeding.  He claimed as an asset a “Billion dollar gold bond” when he knew that the purported bond was fraudulent and worthless.  In his bankruptcy proceeding, Yoder claim $792,592.46 in debts.

Yoder was sentenced to serve 87 months each on the mail fraud, bank fraud, and mail fraud counts, and 60 months on the bankruptcy fraud count, all to run concurrently.   Yoder also was sentenced to two years of supervised release and ordered to pay a total of $581,386.04 in restitution.

The announcement was made by U.S. Attorney Kirsch.

Creating a scheme that enriches the defendant while defrauding banks, insurers and average home owners, jeopardizes our financial system,” said U.S. Attorney Kirsch.  “My Office in coordination with all our law enforcement partners will continue to aggressively prosecute these type of cases.

Everyone has the right to expect honest representation from those they do business with.  Targeting homeowners with this type of fraudulent activity when they are already dealing with financial hardship is not only illegal but a violation of trust and won’t be tolerated by the FBI,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division.  “The FBI and our law enforcement partners will continue to investigate and pursue those who try to line their pockets at the expense of others and hold them accountable.”

HUD Special Agent in Charge Geary stated, “At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those resources are completely dedicated to those in need. The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Single Family housing programs.

Today’s sentence sends a strong message to those who abuse the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Indiana and Southern and Central Illinois (Region 10).  “Providing false documents such as fictitious “bonds” to the United States Bankruptcy Court undermines the integrity of the system and will not be tolerated.  We appreciate the commitment of U.S. Attorney Kirsch and our law enforcement partners to holding those who abuse the bankruptcy system accountable.  We welcome information that will help detect fraud and abuse in the bankruptcy system and we encourage citizens to report suspected bankruptcy fraud through our Internet hotline at USTP.Bankruptcy.Fraud@usdoj.gov.”   The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development’s Office of Inspector General in collaboration with the Northern Indiana Bankruptcy Fraud Working Group coordinated by the U.S. Trustee.  The case was handled by Assistant U.S. Attorney John M. Maciejczyk.

 

Christopher Coburn, 34, Winter Garden, Florida has been found guilty of five counts of bankruptcy fraud and two counts of falsification of records in a bankruptcy proceeding.

According to testimony and evidence presented at trial, Coburn solicited homeowners whose mortgages were in default and offered to rescue their homes from foreclosure. In order to prevent the Federal National Mortgage Association (“Fannie Mae”) and multiple financial institutions holding mortgages from lawfully foreclosing on homeowners’ properties, Coburn engaged a bankruptcy fraud scheme in which he filed or caused to be filed fraudulent bankruptcy petitions in the name of the homeowner, without homeowner’s knowledge or consent, just prior to the scheduled foreclosure sale dates. These fraudulent bankruptcies invoked the automatic stay provision of the bankruptcy code, preventing Fannie Mae and the financial institutions from conducting lawful foreclosure sales and obtaining title to the property. The fraudulent bankruptcy petitions filed by Coburn enabled him to collect fees and allowed him to refer the properties to real estate agents in order to obtain ill-gotten commissions for short-sales. Coburn also filed other false and fraudulent bankruptcy forms in the names of some homeowners relied on by the Office of the United States Trustee and the United States Bankruptcy Court for the Middle District of Florida. http://www.mortgagefraudblog.com/?s=Christopher+Coburn

Coburn faces a maximum penalty of 5 years’ imprisonment for each bankruptcy fraud count and up to 20 years in prison for each falsification of records count. His sentencing hearing has been scheduled for September 9, 2019.

United States Attorney Maria Chapa Lopez made the announcement.

This case was investigated by the Federal Housing Finance Agency—Office of Inspector General, with substantial assistance from the Office of the United States Trustee for the Middle District of Florida. It is being prosecuted by Special Assistant United States Attorney Chris Poor.