Jon Richard Rattray, Gilbert, Arizona has been indicted on felony counts of Fraud Schemes & Artifices, Money Laundering, Controlling an Illegal Enterprise, Computer Tampering, Aggravated Identity Theft, and Forgery.

The State alleges that Rattray, through his company Hawkeye Real Estate Services, LLC, filed a series of forged lien release documents at the Office of the Maricopa County Recorder with the intent of freeing up equity in homes he owned so that he could take out new loans on those same properties or sell them to purchasers as unencumbered property.  The alleged loss to victims is estimated at over $6 million.

Arizona Attorney General Mark Brnovich made the announcement.

This case was referred for investigation by the Office of the Maricopa County Recorder and investigated by agents of the Arizona Attorney General’s Office.

All defendants are presumed innocent until convicted in a court of law.

Assistant Attorney General Adam J. Schwartz is prosecuting this case.

Full copy of the indictment.

Three men were sentenced to prison Tuesday in a scheme that involved lying to lenders about the sale of luxury condos in Vero Beach, federal prosecutors said. Federal investigators said Vero attorney Eric Granitur, hotel developer George Heaton and buyer Stephen McKenzie conspired to lure prospective buyers to the condo units at Kimpton Vero Beach Hotel & Spa. Investigators said the men lied to bankers about incentive programs, including cash-to-close rebates. Court records show that banks lost about $3.3 million after providing more than $20 million in mortgage funds.

Source: Three sentenced in Vero condo mortgage fraud scheme | All News, Featured News Secondary, News | conspiracy, fraud, prison, sentencing, vero attorney, vero buyer, Vero News, vero property developer | Vero News

Jeffrey Halpern, 63, Hewlett, New York, a sole proprietor of a purported loan modification consulting company was sentenced today to 57 months in prison for fraudulently billing clients more than $400,000 for services that were never performed.

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

Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of more than $400,000.

Halpern previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court. http://www.mortgagefraudblog.com/?s=Jeffrey+Halpern

In addition to the prison term, Judge Sheridan sentenced Halpern to three years of supervised release and ordered to pay $411,000 in restitution.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited investigators with the U.S. Attorney’s Office and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Mark Higgins; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.

The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Mitchell C. Elman Esq., Port Washington, New York

Lynn Benson, 54, formerly of Las Vegas, Nevada was indicted today on charges including five counts of Mortgage Lending Fraud, a category “C” felony, one count of Pattern of Mortgage Lending Fraud, and five counts of Theft in the Amount of $3,500 or More, both category “B” felonies.

According to the indictment, Lynn Benson misled victims into believing their homes could be saved from mortgage foreclosure. The victims were led to believe that they could follow a devised scheme devised to not make additional payments on their homes.

Nevada Attorney General Adam Paul Laxalt made the announcement.

Taking advantage of homeowners in need of assistance will not be tolerated by my office,” said Laxalt. “We will continue to work with our law enforcement partners to protect the financial safety of all Nevadans.”

In July, 2016, the Nevada Legislature’s Interim Finance Committee unanimously approved AG Laxalt’s request to create a Financial Fraud Unit to combat increasing financial fraud within the State. Among the 10 positions created using non-taxpayer settlement funds, the office dedicated a criminal investigator to the FBI’s Joint Terrorism Task Force, where local, state and federal agencies collaborate to combat regional terrorism.

This case was investigated after the Office of the Nevada Attorney General began its full-time participation in the FBI’s Joint Terrorism Task Force. This case was investigated by Las Vegas Metropolitan Police Department Task Force officers, and the arrest was made by the Cloverdale, CA Police Department. The Office of the Nevada Attorney General is prosecuting this case.

A grand jury indictment is merely a charging document; every defendant is presumed innocent until and unless proven guilty in a court of law.

The grand jury indictment against Lynn Benson is attached.  To file a complaint about someone suspected of committing a fraud, click here.

Jeffery J. Detloff, Lori K. Detloff and Detloff Marketing and Asset Management Inc., have been indicted today on charges of conspiring to commit mail fraud and wire fraud for participating in a long-running conspiracy to defraud companies, including financial institutions, in connection with foreclosed properties in the Minneapolis area and elsewhere from in or about September 2007 and continuing through in or about June 2015.

Jeffery Detloff, a realtor who sold and managed foreclosed Minneapolis, Minnesota properties on behalf of victim companies worked alongside his wife, Lori Detloff, an accountant for Jeffery Detloff and associated companies, in committing the fraud.  The Detloffs conducted their real estate business through Detloff Marketing.  In addition to the conspiracy charge, the indictment includes four counts of wire fraud and four counts of mail fraud.

According to the indictment, the Detloffs devised a scheme requiring repair contractors to pay the Detloffs kickbacks.  In return, Jeffery Detloff used his position as a realtor for the victim companies to steer housing repair contracts to contractors who paid the kickbacks.  The contractors paid kickbacks to the Detloffs through Detloff Marketing.  The indictment further alleges that Jeffery Detloff procured and submitted sham bids as part of the scheme to defraud the victim companies.  One housing repair contractor has already pleaded guilty in connection with this investigation.

This is the second case involving fraud and kickbacks relating to repair contracts for properties in the Minneapolis area owned by financial institutions.  The maximum penalty for wire fraud affecting a financial institution, mail fraud affecting a financial institution, and conspiracy to commit mail and wire fraud affecting a financial institution is 30 years of imprisonment and a fine of $1,000,000.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The Department of Justice made the announcement.

This indictment affirms the Antitrust Division’s commitment to protecting the American housing market from fraud,” said Assistant Attorney Makan Delrahim of the Department of Justice’s Antitrust Division.  “We will continue to work with our law enforcement partners to protect the integrity of the competitive process.”

As alleged, the defendants created a scheme to siphon as much money as they could from these properties, no matter the method, no matter the victim,” said FBI Special Agent in Charge Jill Sanborn of the Minneapolis Division. “These scams victimize all of us, and the FBI and our law enforcement partners will continue to unravel these schemes and hold accountable anyone found responsible for defrauding the system.”

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The charges are the result of a federal investigation of housing repair contracts in the  Minneapolis area.

George B. Larsen, 56, formerly of San Rafael, California was sentenced to 10 years and one month in prison and ordered to pay $1,759,100 in restitution for his role in a fraudulent mortgage elimination scheme.

On December 6, 2017, Larsen was convicted following trial on one count of conspiracy and four counts of bank fraud. http://www.mortgagefraudblog.com/?s=+George+B.+Larsen

According to court documents, between April 22, 2010, and November 18, 2011, Larsen was a member of a conspiracy that ran a mortgage elimination program purporting to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of title on residential properties, sold the properties, and received the sales proceeds.

As a requirement for participation in the “mortgage elimination program,” the conspirators enrolled homeowners as members in a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity Pillow Foundation. The conspirators indicated to the homeowners these entities would offer protection against the banks.

Larsen ran a branch of the mortgage elimination program, recruiting homeowners into the scheme, marshalling the necessary recorded documents, and guiding the sale of the homes. Once the homeowner enrolled with Shon-te-East-a or Pillow Foundation, Larsen would have a sham deed of trust created and recorded, giving the impression that the homeowner had refinanced the mortgage loan with a new lender. In reality, the new lender was a fake entity controlled by the conspirators, and the homeowner owed no money to the purported new lender.

The next step in the process was also a recorded document. The conspirators caused a fake deed of reconveyance to be recorded, giving the appearance that the true mortgage loan had been discharged and that the true lienholder no longer had a security interest in the home.

With title appearing to be clear, the conspirators caused the sale of the home, with the proceeds split between the co-conspirators and the homeowners.

In total, 37 properties were sold through the Shon-te-East-a conspiracy. The conspirators recorded fraudulent documents on an additional approximately 100 homes, but were unable to sell these before the scheme unraveled.

One co-defendant, Larry Todt, formerly of Malibu, California was convicted at trial along with Larsen. Three other co-defendants have previously entered guilty pleas: Remus A. Kirkpatrick, formerly of Oceanside, California, Michael Romano, Benicia, California and Laura Pezzi, Roseville, California. Tisha Trites and Todd Smith, both of San Diego, California pleaded guilty in related cases. All are awaiting sentencing.

Co-defendants John Michael DiChiara, of Penn Valley, and James Castle, of Santa Rosa, are awaiting trial. The charges against DiChiara and Castle are only allegations: both defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

Co-defendants John Michael DiChiara, Penn Valley, California and James Castle, Santa Rosa, California are awaiting trial. The charges against DiChiara and Castle are only allegations: both defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

U.S. Attorney McGregor W. Scott made the announcement.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Audrey B. Hemesath and Todd A. Pickles are prosecuting the case.

 

The investigation, still in its early stages, has so far resulted in a fraud-conspiracy indictment against four real-estate executives in upstate New York for falsifying information that helped them secure loans multi-family properties, the Wall Street Journal reports.

Source: Federal probe focuses on apartment mortgage fraud: WSJ – Arbor Realty Trust, Inc. (NYSE:ABR) | Seeking Alpha

The Royal Bank of Scotland Group plc (RBS Group) has entered into a $4.9 billion settlement today resolving federal civil claims that RBS Group’s subsidiaries in the United States (RBS) misled investors in the underwriting and issuing of residential mortgage-backed securities (RMBS) between 2005 and 2008. The penalty is the largest imposed by the Justice Department for financial crisis-era misconduct at a single entity under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which allows the Justice Department to seek civil penalties for violations of criminal statutes.

The settlement includes a statement of facts that details – using contemporaneous calls and emails of RBS executives – how RBS routinely made misrepresentations to investors about significant risks it failed to disclose about its RMBS. For example:

  • RBS failed to disclose systemic problems with originators’ loan underwriting. RBS’s reviews of loans backing its RMBS (known as “due diligence”) confirmed that loan originators had failed to follow their own underwriting procedures, and that their procedures were ineffective at preventing risky loans from being made. As a result, RBS routinely found that borrowers for the loans in its RMBS did not have the ability to repay and that appraisals for the properties guaranteeing the loans had materially inflated the property values. RBS’s RMBS contained, as its Chief Credit Officer put it, “total f***ing garbage” loans with “random” and “rampant” fraud that was “all disguised to, you know look okay kind of . . . in a data file.” RBS never disclosed that these material risks both existed and increased the likelihood that loans in its RMBS would default.
  • RBS changed due diligence findings without justification. RBS’s due diligence practices did not remove fraudulent and high-risk loans from its RMBS. In fact, RBS executives internally discussed how RBS’s due diligence process was “just a bunch of bullsh**.” For example, when RBS’s due diligence vendors graded loans materially defective, RBS frequently directed the vendors to “waive” the defects without justification. One due diligence vendor, which tracked waivers by most major participants in the RMBS industry, concluded that RBS waived material defects 30% more frequently than the industry average. RBS’s waiver of material defects routinely resulted in the securitization of loans with excessive risk. When it engaged in such waivers, RBS never included enhanced “scratch-and-dent” disclosures that would have alerted investors that loans with excessive risks were included in the RMBS.
  • RBS provided investors with inaccurate loan data. RBS’s due diligence frequently found that loan data – which RBS passed on to investors, who used the data to analyze the risks associated with its RMBS – were riddled with errors. Many inaccuracies made the loans look less risky than they actually were. RBS, however, did not require originators to correct the data errors. In one deal, where RBS identified over 600 data errors associated with 563 loans (including debt-to-income ratios understated by as much as 2700%), RBS failed to disclose these errors even to the originator; instead, RBS reassured the originator that RBS had not required originators to correct data errors in the past and did not anticipate doing so for that deal.
  • RBS failed to disclose due diligence and kick-out caps. To develop and maintain business relations with originators, RBS agreed to limit the number of loans it could review (due diligence caps) and/or limit the number of materially defective loans it could remove from a RMBS (kick-out caps). RBS’s scheme reached its height in two deals issued in October 2007. In both of these RMBS, RBS identified hundreds of underlying loans that carried a particularly high risk of default and would cause losses to the RMBS investors. RBS kept these materially risky loans in the RMBS, without disclosing their inclusion to investors, because RBS had agreed to a kick-out cap limiting the number of defective loans that RBS could exclude from the securities in exchange for receiving a lower price for the loan pool. As a result, over the entirety of its scheme, RBS securitized tens of thousands of loans that it determined or suspected were fraudulent or had material problems without disclosing the nature of the loans to investors.

Through its scheme, RBS earned hundreds of millions of dollars, while simultaneously ensuring that it received repayment of billions of dollars it had lent to originators to fund the faulty loans underlying the RMBS. RBS used RMBS to push the risk of the loans, and tens of billions of dollars in subsequent losses, onto unsuspecting investors across the world, including non-profits, retirement funds, and federally-insured financial institutions. As losses mounted, and after many mortgage lenders who originated those loans had gone out of business, RBS executives showed little regard for this misconduct and made light of it.

U.S. Attorney Lelling, Acting Associate Attorney General Panuccio and FHFA-OIG Associate Inspector General Byrne made the announcement.

This resolution – the largest of its kind – holds RBS accountable for defrauding the people and institutions that form the backbone of our investing community,” said Andrew E. Lelling, U.S. Attorney for the District of Massachusetts. “Despite assurances by RBS to its investors, RBS’s deals were backed by mortgage loans with a high risk of default. Our settlement today makes clear that institutions like RBS cannot evade responsibility for the damage caused by their illicit conduct, and it serves as a reminder that the Justice Department, and this Office, will hold those who engage in fraudulent conduct accountable.”

Many Americans suffered lasting economic harm as a result of the 2008 financial crisis,” said Acting Associate Attorney General Jesse Panuccio. “This settlement holds RBS accountable for serious misconduct that contributed to that financial crisis, and it sends an important message that the Department of Justice will pursue financial institutions that illicitly harm the American economy and our consumers.”

The actions of RBS resulted in significant losses to investors, including Fannie Mae and Freddie Mac, which purchased the Residential Mortgage-Backed Securities backed by defective loans,” said Associate Inspector General Jennifer Byrne of the Federal Housing Finance Agency-Office of Inspector General’s (FHFA-OIG). “We are proud to have partnered with the U.S Attorney’s Office for the District of Massachusetts on this matter.”

These are allegations only, which RBS disputes and does not admit, and there has been no trial or adjudication or judicial finding of any issue of fact or law.

Assistant U.S. Attorneys Justin D. O’Connell, Brian M. LaMacchia, Elianna J. Nuzum, Steven T. Sharobem, and Sara M. Bloom of Lelling’s Office handled the matter.

Lori Lynn Andrew, 49, Cashmere, Washington, the owner of Hartman Escrow, Inc., a real estate escrow firm was sentenced today to 24 months in prison for bank fraud.

Andrew stole more than $2.1 million through a variety of techniques, including making false entries in escrow closing documents, altering accounting records, and depositing checks into the general account instead of the trust account.

According to records in the case, beginning in about January 2011, and continuing until July 2012, Andrew used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions.  Andrew made, or had others make, false settlement statements on closing transactions listing false or inflated fees and charges.  Andrew forged signatures on various statements and created false invoices, statements, and bills; she altered and deposited checks to her company account that should have gone to others; and she took client funds from her trust account and transferred them to her personal account for her own use.  Andrew used the money for casino payments, credit card bills, and other personal expenses.  Andrew defrauded individual customers, as well as Bank of America, Wells Fargo, Citi Bank, Chase, and GMAC.  http://www.mortgagefraudblog.com/?s=Lori+Lynn+Andrew

In all Andrew defrauded the financial institutions and other customers of $2.185 million.  In July 2012, the Washington State Department of Financial Institutions arranged for a receiver to take over the Tukwila, Washington, escrow company after finding evidence of fraud.  Andrew had her license to act as an escrow agent suspended in 2013, and her license has since been revoked. The receiver was able to recover some funds for unsecured claimants, but just over $1 million is still owed to defrauded clients.

U.S. Attorney Annette L. Hayes made the announcement.

This defendant chose to victimize people when they were buying or selling a home–often the most important financial transaction of their lives,” said U.S. Attorney Annette L. Hayes.  “Like all real estate escrow agents, the defendant was responsible for ensuring large amounts of money went where they belonged.  When she decided to line her own pockets rather than do her job, she crossed the line and earned the prison sentence that the court imposed today.”

At the sentencing hearing, U.S. District Judge Richard A. Jones said, “Every single time you had an opportunity to change your mind and say ‘this is wrong,’ you kept doing it.

The case was investigated by the Washington State Department of Financial Institutions, the FBI, the Postal Inspection Service (USPIS), and the Housing and Urban Development Office of Inspector General (HUD-OIG).

The case is being prosecuted by Special Assistant United States Attorney Hugo Torres. Mr. Torres is a King County Senior Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.

 

Daniel Cardenas, 37, Tampa, Florida, was sentenced today to 18 months in federal prison for conspiracy to commit wire fraud.

According to court documents, from as early as October 2007 through May 2008, Cardenas and others conspired to execute a wire fraud scheme affecting financial institutions. The goal of the scheme was to sell condominium units at The Preserve at Temple Terrace, a 392-unit condominium complex in Tampa, Florida. To entice buyers to purchase the units, the conspirators offered cash payments to buyers, either before or after closing. Payment of the funds to the individual buyers was neither known to nor approved by the mortgage lenders.

The conspirators made material false statements on loan documents, such as purchase and sale agreements, loan applications, and HUD-1 settlement statements, to induce mortgage lenders to approve loans for otherwise unqualified borrowers. The conspirators used several entities to conceal the payments to buyers from the mortgage lenders.

Cardenas’s role in the conspiracy, as a loan officer at Transcontinental Lending Group’s branch in Tampa, Florida included but was not limited to preparing, signing, and certifying false and fraudulent loan applications submitted to lenders in order to induce the institutions to provide funding for buyers. The false representations submitted to and relied upon by the mortgage lenders included representations concerning occupancy, income, source of funds, and assets.  Cardenas’s participation in the mortgage fraud conspiracy caused approximately $710,000 in losses to the victim mortgage lenders.

Cardenas pleaded guilty on April 24, 2018.

This case was investigated by the Federal Housing Finance Agency, Office of Inspector General and Federal Bureau of Investigation. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.