Jaime L. Mulvihill, 40, North Andover, Massachusetts, the principal and co-founder of a mortgage short sale assistance company was sentenced yesterday in connection with defrauding mortgage lenders and investors out of nearly $500,000 in proceeds from about 90 short sale transactions.

Mulvihill and her co-defendant Gabriel T. Tavarez founded and operated Loss Mitigation Services, LLC. The charges arise out of the defendants’ scheme to steal undisclosed and improper fees from mortgage lenders in connection with short sales of homes. A short sale occurs where the mortgage debt on the home is greater than the sale price, and the mortgage lender agrees to take a loss on the transaction.

Loss Mitigation Services, purportedly acting on behalf of underwater homeowners, negotiated with mortgage lenders for approval of short sales in lieu of foreclosure. Mortgage lenders typically forbid short sale negotiators, such as Loss Mitigation Services, from receiving any proceeds of a short sale.

From 2014 to 2017, Mulvihill and, allegedly, Tavarez, directly or through their employees, falsely claimed to homeowners, real estate agents and closing attorneys that mortgage lenders had agreed to pay Loss Mitigation Services fees known as “seller paid closing costs” or “seller concessions” from the proceeds of the short sales. In reality, the mortgage lenders had never approved Loss Mitigation Services to receive those fees. When the short sales closed, at the instruction of Mulvihill, or others working with her and Tavarez, settlement agents paid Loss Mitigation Services the fees, which typically were 3% of the short sale price above and beyond any fees to real estate agents, closing attorneys and others involved in the transaction. To deceive mortgage lenders about the true nature of the fees, Mulvihill or Tavarez filed, or caused others to file, false short sale transaction documents with mortgage lenders, including altered settlement statements and fabricated contracts and mortgage loan preapproval letters. Mulvihill and, allegedly, Tavarez, fabricated the transaction documents, or caused them to be fabricated, in order to justify the additional fees and conceal that they were being paid to Loss Mitigation Services. http://www.mortgagefraudblog.com/?s=Jaime+L.+Mulvihill

The defendants defrauded the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the U.S. Department of Housing and Urban Development.

Mulvihill was sentenced by U.S. Senior District Court Judge Rya W. Zobel to six months in prison, two years of supervised release, and ordered to pay restitution in the amount of $478,458 and forfeiture of $239,229. In November 2019, Mulvihill pleaded guilty to conspiracy to commit wire fraud.

Tavarez has pleaded not guilty and is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Robert Manchak, Inspector General of the Federal Housing Finance Agency; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Assistant U.S. Attorneys Sara Miron Bloom and Brian M. LaMacchia of Lelling’s Office are prosecuting the case.

 

Yorce Yotagri, 53, Freeport, New York, today admitted participating in a conspiracy to carry out a $9 million scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a scheme known as “shotgunning,”

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

Yotagri was a business partner of Jorge Flores ,Oakdale, New York, and Jose Piedrahita,  Freeport, New York, two conspirators also charged in the indictment. From 2010 through February 2018, Yotagri, Flores, Piedrahita, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOC) from banks on residential properties in New Jersey and New York.

In August 2016, Yotagri lived at a property in Freeport, New York. A quitclaim deed was prepared that facilitated the transfer of ownership of the property to Yotagri and Piedrahita even though Piedrahita did not own the property.

In September 2016, with the Freeport property now in the names of Yotagri and Piedrahita, the conspirators applied for a $290,000 HELOC from a victim bank in Yotagri’s and Piedrahita’s names using the property as collateral. Piedrahita’s contact information appeared on the HELOC application on the Freeport property, which also contained inflated income and assets for Piedrahita. On Dec. 2, 2016, based on the false representations contained in the application, the victim bank issued a HELOC to Piedrahita for $290,000. Piedrahita then disbursed the $290,000 to himself, Yotagri, and Flores. The HELOC funds were never repaid.

In January 2017, Flores called another victim bank and applied for a second HELOC in Piedrahita’s name for $250,000 – again using the Freeport property as collateral. This time Flores’ email address and phone number appeared on the HELOC application on the Freeport property. To demonstrate to the second victim bank that the property was unencumbered by any senior mortgages, Flores and Piedrahita sent several fraudulent documents to the victim bank to conceal the existence of or amounts owed on senior mortgages. The false documents the defendants submitted included a series of false payoff letters and fake checks from other banks, all submitted to deceive the victim bank into believing that the remaining value of the senior mortgages on the Freeport property was far less than what was actually owed.

On March 22, 2017, the second victim bank issued a HELOC to Piedrahita for $250,000. Piedrahita then disbursed nearly the entirety of the HELOC funds to himself and Yotagri. The funds obtained by Piedrahita and Yotagri from the HELOC were not repaid and were overdrawn, causing losses to the second victim bank totaling approximately $290,000.

At the time the applications for the two HELOCS were made, there was not sufficient equity in the Freeport property to support the $540,000 in HELOC applications made by Flores, Piedrahita, and Yotagri.

The overall scheme, which included HELOC loans for approximately 17 different properties, resulted in over $9 million in losses to the victim banks. http://www.mortgagefraudblog.com/?s=Yorce+Yotagri

Yotagri faces a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 25, 2020.

Yotagri pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an indictment charging him with one count of conspiracy to commit bank fraud.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), under the direction of Special Agent in Charge Steven Perez in Newark; 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 guilty plea.

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

The charges and allegations against Yotagri’s co-defendants contained in the indictment are merely accusations, and they are presumed innocent unless and until proven guilty.

Defense counsel: Randy Scott Zelin Esq., New York

Marek Harrison, 56, Plant City, Florida, has been sentenced to 20 months in federal prison for his role in a bank fraud scheme.

According to court documents, between September 2007 and December 2008,

Harrison created and executed a mortgage fraud scheme involving Saratoga Resort Villas, a condominium conversion of a former hotel located in Kissimmee, Florida. Harrison’s scheme to defraud financial institutions involved kickbacks of mortgage proceeds to buyers and co-conspirators, as well as misrepresentations regarding the source of down payment funds for the transactions. None of the incentives and kickbacks were disclosed to the mortgage lenders. Harrison also recruited otherwise unqualified buyers, and he provided down payment money for the buyers. http://www.mortgagefraudblog.com/?s=Marek+Harrison

The court also ordered Harrison to pay $2,753,495.79 in restitution to the victim financial institutions.

Harrison had pleaded guilty on November 27, 2019.

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

Edmundo Roman-Perez, 70, Sunset Park, Brooklyn, an attorney has been arraigned today on an indictment in which he is charged with several counts of grand larceny for allegedly stealing approximately $280,000 in down payments he received to hold in escrow from two clients he represented in the sale of their homes.

According to the investigation, between October 2018 and March 2019, the defendant represented a couple in the sale of their $1,350,000 two-family home in Sunset Park, Brooklyn. It is alleged that the defendant received a $135,000 down payment from the buyers that he was to hold in escrow until closing.

In March 2019, shortly after the closing, the defendant issued two checks to cover the amount of the down payment, each in the amount of $65,600, both checks were allegedly returned because of insufficient funds.

Similarly, between November 2018 and April 2019, the defendant represented three brothers in the sale of their $1,500,000 two-family home in Dyker Heights, Brooklyn. It is alleged that the defendant received a $150,000 down payment from the buyers that he was to hold in escrow until closing.

In April 2019, three days after closing, the defendant allegedly issued three checks to the victims, each in the amount of $49,187.10, to cover the amount of the down payment. It is alleged that all three checks were returned because of insufficient funds.

Roman-Perez was arraigned today before Brooklyn Supreme Court Justice Danny Chun on an indictment in which he is charged with second-degree grand larceny, three counts of third-degree grand larceny and five counts of issuing a bad check. He was released without bail and ordered to return to court on April 1, 2020.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “This defendant allegedly betrayed the trust of his clients and abused his power as an attorney, taking advantage of the escrow accounts he controlled to steal hundreds of thousands of dollars. We will now seek to hold him accountable for this serious breach of trust.

The case was investigated by Supervising Financial Investigator Deborah Wey of the District Attorney’s Investigations Division.

The case is being prosecuted by Senior Assistant District Attorney Katherine Zdrojeski of the District Attorney’s Public Integrity Unit, under the supervision of Assistant District Attorney Laura Neubauer, Chief of the Public Integrity Unit, and Assistant District Attorney Michel Spanakos, Deputy Chief of the Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.

 

Ruben Rodriguez, 43, and Jaime Mayorga, 41, both of Sacramento, California were convicted and were sentenced, yesterday, each to two years in prison for conspiring to commit wire fraud at a jury trial in April 2019.

According to court documents, between October 2004 and May 2007, Rodriguez and Mayorga were employees of Delta Homes and Lending Inc., a now-defunct Sacramento-based real estate and mortgage lending company that was founded by co-defendant Moctezuma “Mo” Tovar, 50, Sacramento, California. Rodriguez, Mayorga, Tovar, and other Delta Homes employees and co-defendants Manuel Herrera, Davis, California, Sandra Hermosillo, 57, Woodland, California,  Jun Michael Dirain, 47, Antelope, California and Christian Parada Renteria, 43, formerly of Sacramento, California agreed to commit fraud to obtain home loans from mortgage lenders. As part of the scheme, Rodriguez and Mayorga submitted fraudulent mortgage loan applications and supporting documents, which falsely represented the borrowers’ assets and income, liabilities and debts, employment status, citizenship status, and intent to occupy the property. Rodriguez and Mayorga also provided money to the borrowers in order to inflate their bank account balances. Once the loans were secured, the borrowers returned the money. The aggregate sales price of the homes involved in the overall conspiracy was in excess of $10 million. As a result of the conspiracy, mortgage lenders and others suffered losses of at least $4 million. http://www.mortgagefraudblog.com/?s=delta+home+%26+Lending

Tovar was sentenced to 4 ½ years in prison. Herrera was sentenced to one year in prison. Dirain was sentenced to six months in prison, followed by six months of home detention. Hermosillo, was sentenced to nine months of home detention. Parada Renteria pleaded guilty to two counts of concealing felonies related to the wire fraud conspiracy, and was previously sentenced to serve 1 year in prison.

Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Brian A. Fogerty and Justin L. Lee prosecuted the case.

 

Tanya Firmani, 47, Jacksonville, Florida has been found guilty of one count of conspiracy to commit bankruptcy fraud and six counts of bankruptcy fraud.

According to testimony and evidence presented at trial, Firmani conspired with others in a foreclosure rescue/bankruptcy fraud scheme. Firmani solicited homeowners whose mortgages were in default and offered to rescue their homes from foreclosure. To prevent the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal Housing Administration (“FHA”), and multiple financial institutions from lawfully foreclosing on homeowners’ properties, Firmani filed or caused the filing of fraudulent bankruptcy petitions in the homeowners’ names just prior to the scheduled foreclosure sale dates. The fraudulent bankruptcies triggered the Bankruptcy Code’s automatic stay provision, preventing Fannie Mae, Freddie Mac, FHA, and the financial institutions from conducting foreclosure sales and obtaining the titles to the properties. The fraudulent bankruptcy petitions enabled Firmani to collect fees and allowed her co-conspirators to obtain ill-gotten commissions for short-sales causing losses to creditors.

Firmani faces a maximum penalty of five years’ imprisonment on each count. Her sentencing hearing is scheduled for April 21, 2020.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the U.S. Department of Housing and Urban Development – Office of Inspector General. The Office of United States Trustee for the Middle District of Florida provided substantial investigative assistance. The case is being prosecuted by Special Assistant United States Attorney Chris Poor.

 

Paul Nicoletti, 60, Bloomfield Hills, Michigan, a former Oakland County lawyer was sentenced yesterday, January 30, 2020, to serve 70 months in federal custody on one count of conspiracy to commit bank fraud, and three counts of bank fraud.

According to the evidence introduced during the trial, Mr. Nicoletti, a lawyer and owner of a title company became involved in a scheme to obtain large mortgage loans from Fifth Third Mortgage, Michigan, a lending arm of Fifth Third Bank. Although somewhat complicated, the essence of the scheme involved real estate developers, a corrupt loan officer and Mr. Nicoletti working together to obtain large mortgage loans from Fifth Third Mortgage, Michigan, purportedly for the purchase and development of high-end properties in Bloomfield Hills and Birmingham, Michigan, based on numerous false statements both in the application and closing process of the loans, resulting in Fifth Third Mortgage, Michigan releasing over eight million dollars in loan proceeds.

More specifically, one or more of the conspirators would find and recruit “straw buyers” to serve as mortgage loan applicants for the purchase of real property which the conspirators wanted to purchase and develop. The straw buyers, who viewed themselves as “investors,” were paid a fee for the use of their names and credit histories in the loan applications and real estate transactions, and were promised a portion of the expected profit after the property was developed and resold. The straw buyers had no intention of living at or actually exercising ownership and control of the property, despite representations to the contrary in their applications, and in closing documents. Despite their good credit ratings, the straw buyers did not have the assets or income necessary to qualify for mortgages in the substantial amounts sought. Thus, false information pertaining to their income and assets was included in the mortgage loan applications to qualify them. Mr. Nicoletti’s role was to facilitate the fraudulent loans as the title agent by, among other things, falsely verifying that the borrowers made substantial down payments on the properties. To do so, Mr. Nicoletti obtained cashier’s checks, issued after the loan proceeds were released to his Continental Title account and which were funded by the loan proceeds themselves, bearing the names of the straw buyers as “remitters,” which he then re-deposited into his Continental Title account, making it appear as though the borrowers funded the substantial down payments. In fact, the borrowers brought no money to the closings. When the fraud was discovered by authorities, Mr. Nicoletti counseled the destruction of evidence of the fraud and also personally destroyed relevant electronic and paper records.

Mr. Nicoletti was the sixth person convicted as a result of this investigation. The loan officer, a mortgage broker, an appraiser and several of the real estate developers have previously been sentenced after entering guilty pleas relating to the scheme. The investigation was conducted by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorneys Craig Weier and John Neal.

Nicoletti received the sentence from the Honorable Victoria A. Roberts, United States District Judge, in Detroit, Michigan. Judge Roberts also ordered that the defendant serve two years on supervised release after his release from federal custody and pay restitution totaling $5,299,751.58. A jury returned guilty verdicts against Mr. Nicoletti on May 5, 2019 after a seven-day trial.

United States Attorney Matthew Schneider made the announcement today.

George Gilmore, 70, Toms River, New Jersey, a partner at an Ocean County, New Jersey, law firm, was sentenced today to one year and one day in prison for his conviction on two counts of failing to pay over payroll taxes withheld from employees to the IRS and one count of making false statements on a bank loan application submitted to Ocean First Bank N.A.

According to documents filed in this case and the evidence at trial:

Gilmore worked as an equity partner and shareholder at Gilmore & Monahan P.A., a law firm in Toms River, New Jersey, where he exercised primary control over the firm’s financial affairs. Because he exercised significant control over the law firm’s financial affairs, Gilmore was responsible for withholding payroll taxes from the gross salary and wages of the law firm’s employees to cover individual income, Social Security and Medicare tax obligations. For the tax quarters ending March 31, 2016, and June 30, 2016, the law firm withheld tax payments from its employees’ checks, but Gilmore failed to pay over in full the payroll taxes due to the IRS.

Gilmore also submitted a loan application to Ocean First Bank containing false statements. On November 21, 2014, Gilmore reviewed, signed, and submitted to Ocean First Bank a Uniform Residential Loan Application (URLA) to obtain refinancing of a mortgage loan for $1.5 million with a “cash out” provision that provided Gilmore would obtain cash from the loan. On January 22, 2015, Gilmore submitted another URLA updating the initial application. Gilmore failed to disclose his outstanding 2013 tax liabilities and personal loans that he had obtained from others on the URLAs. Gilmore received $572,000 from the cash out portion of the loan.

On April 17, 2019, Gilmore was acquitted of two counts of filing false tax returns for calendar years 2013 and 2014; the jury could not reach a unanimous verdict on one count of income tax evasion for calendar years 2013, 2014, and 2015. The verdicts were returned following a trial that began April 1, 2019, before U.S. District Judge Anne E. Thompson, who imposed the sentence today in Trenton federal court.

In addition to the prison term, Judge Thompson sentenced Gilmore to three years of supervised release.

First Assistant U.S. Attorney Honig for the District of New Jersey and Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, special agents with the U.S. Attorney’s Office under the direction of Supervisory Special Agent Thomas Mahoney, and special agents of the FBI Red Bank Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing.

The government is represented by Deputy U.S. Attorney Matthew J. Skahill; Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Office Special Prosecutions Division; and Trial Attorney Thomas F. Koelbl of the U.S. Department of Justice – Tax Division.

 

Jack V. Smalley, 70, Colorado Springs, Colorado was found guilty for bank fraud related to a mortgage application with the Navy Federal Credit Union.

On June 25, 2015, Smalley submitted a mortgage loan application with the Navy Federal Credit Union indicating that he earned a salary of approximately $200,000 dollars a year.  At the time, Smalley knew that wasn’t true.  In conducting its due diligence, the Navy Federal Credit Union requested a pay stub that would show Smalley’s monthly income, a letter from his employer to verify his employment and salary, and a bank statement to show Smalley’s income deposited into his bank account.

Smalley took steps to falsify the requested information, including falsifying a pay stub and his employment letter.  Based on the fraudulent documents, the Navy Federal Credit Union approved Smalley for a $998,000 loan.  Smalley defaulted on that loan in 2017.   In trying to mitigate his loan, Smalley provided two more fraudulent employment letters in 2018 and 2019.   Smalley used the proceeds of the loan to purchase a $1.1 million dollar residence in Colorado Springs, Colorado.   As part of the proceedings in this case, the Court ruled that the residence is subject to forfeiture based on the bank fraud.

United States Attorney Jason R. Dunn made the announcement.  The Department of Defense Criminal Investigative Service, the Internal Revenue Service–Criminal Investigations, and the Air Force Office of Special Investigations join in this announcement.

Lying to get a home loan is fraud, and the guilty verdict by the jury who heard this case made that perfectly clear,” said U.S. Attorney Jason Dunn.  “Thanks to the hard work of our office and the law enforcement agents investigating this case, Smalley is now a convicted felon facing prison time.”

Smalley is scheduled to be sentenced on April 27, 2020.   The case was investigated by the Department of Defense Office of the Inspector General, the Internal Revenue Service—Criminal Investigations and Air Force Office of Criminal Investigations.  The trial was before U.S. District Court Judge Daniel D. Domenico.  The defendant was prosecuted by Assistant U.S. Attorney Jeremy Sibert.

Gregory Gibbons, 54, Mobile, Alabama, was convicted of conspiracy to commit wire fraud affecting a financial institution. The announcement was made today.

Between June 2008 and February 2009, the defendant conspired with others, including Alagi Samba, a realtor, and Daniel Badu, to devise a scheme to obtain eight loans for unqualified borrowers for homes in the Bronx, New York.  As part of the scheme, Gibbons acted as the mortgage broker and altered income and asset documents of the borrowers before they were sent to financial institutions.

For instance, Gibbons altered and created documents to make it appear that defendant Badu qualified for a mortgage on a property at 814 Faile Street, Bronx, New York. The defendant indicated that Badu was a research ophthalmologist and earned a specific income when in fact, Badu was not a research ophthalmologist nor did he receive the income stated on a loan application. Gibbons knew that these false loan documents were submitted to

The Funding Source, a mortgage bank, in order to secure a loan insured by the Federal Housing Administration. Based on that false application and supporting documentation, the loan was approved. The Funding Source then sold the loan on the secondary market to M &T Bank, which wired funds from New York through the State of Ohio to purchase the loan.

The defendant and his co-conspirators arranged for additional fraudulent loans to be approved, including another loan for Badu, and caused wire communications to be transmitted in interstate commerce for those loans. These fraudulent transactions caused losses of approximately $4,800,007 affecting M&T Bank and other financial institutions including SunTrust Bank, JPMorgan Chase Bank, and Citibank. http://www.mortgagefraudblog.com/?s=Gregory+Gibbons

U.S. Attorney James P. Kennedy Jr. made the announcement.

Gibbons was sentenced to time served by Chief U.S. District Judge Frank P. Geraci, Jr. The defendant was also ordered to pay restitution totaling $1,458,847.90 to the U.S. Department of Housing and Urban Development, CitiBank, and M&T Bank.

The sentencing is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Joseph Cronin, Boston Division; the Department of Housing and Urban Development, under the direction of Special Agent in Charge Brad Geary; and the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Gary Loeffert.