New York DA Vance Releases Grand Jury Report Documenting Epidemic of Real Estate Theft Targeting Vulnerable New Yorkers D.A. Asks Lawmakers to Adopt Series of Reforms to Curb “Title Identity Theft,” or “Deed Fraud”. Manhattan District Attorney Cyrus R. Vance, Jr., today announced that a New York State Supreme Court Grand Jury has issued a report outlining a series of recommendations to curb a growing “epidemic” of residential real estate fraud, whose victims, according to the Grand Jury, “
Finance of America Mortgage to Pay $14.5 Million to Resolve Whistleblower Lawsuit Related to FHA
The United States Department of Justice announced today that Finance of America Mortgage, LLC (“FAM”) has agreed to pay the United States $14.5 million to settle a False Claims Act lawsuit involving mortgage fraud.
Matthew T. Voss, 43, Northport, New York, formerly the Chief Operating Officer of Long Island mortgage lender Vanguard Funding, LLC (Vanguard), was sentenced today to conspiring to commit wire and bank fraud in connection with the diversion of more than $8.9 million of warehouse loans that Vanguard had fraudulently obtained purportedly to fund home mortgages and mortgage refinancing.
Between August 2015 and March 2017, Voss and his co-conspirators at Vanguard engaged in a scheme whereby they obtained more than $8.9 million in short-term loans, referred to as warehouse loans, by falsely representing that the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients. Instead, Voss and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through false loan applications. https://www.justice.gov/usao-edny/pr/former-ceo-long-island-mortgage-lender-sentenced-24-months-imprisonment-89-million
Voss was sentenced to 24 months’ imprisonment to be followed by three years’ supervised release. The amount of restitution will be ordered by the Court at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Maria T. Vullo, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.
“With today’s sentence, Matthew Voss has been held accountable for using his extensive knowledge of the mortgage industry to deceive banks that trusted and relied upon him as a business partner and divert money for his personal use,” stated United States Attorney Donoghue. “This Office, together with our law enforcement partners, will vigorously investigate and prosecute those who commit fraud to advance their own financial interests at the expense of businesses and residents of our community.”
“A compromised banking system threatens economic stability and the safety of the mortgage industry, which puts communities and the American institution of homeownership at risk,” stated FBI Assistant-Director-in-Charge Sweeney. “Thanks to the dedicated work of our law enforcement partners, today’s sentence proves that those who use their expertise to deceive others for their own financial gain will be held accountable to the fullest extent of the law.”
“As New York’s financial services regulator, DFS is proud to have worked with the U.S. Attorney’s Office and other law enforcement partners to hold this defendant accountable for his actions,” stated DFS Superintendent Vullo. “DFS will continue to combat fraud and bring criminals to justice in order to safeguard the industry and protect consumers.”
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Whitman G.S. Knapp and Elizabeth Losey Macchiaverna are in charge of the prosecution.
Hollie Darlene Dustin, 60, Punta Gorda, Florida, was sentenced today to six months in federal prison for committing wire fraud against the Federal National Mortgage Association (Fannie Mae).
According to court documents, Dustin, a licensed real estate broker, owned Home Choice Real Estate (HCRE), a company that contracted with Fannie Mae to manage and perform preservation services on various Fannie Mae foreclosed properties. As part of a Master Listing Agreement with Fannie Mae, Dustin’s company was prohibited from using any vendors that she controlled to perform preservation services on Fannie Mae properties. Dustin fraudulently used ProPreserve, a company that she controlled, to perform preservation services on the properties without Fannie Mae’s knowledge or consent. She then submitted approximately 550 fraudulent ProPreserve invoices for HCRE, which Fannie Mae paid.
Dustin also created inflated ProPreserve invoices for work already performed by other vendors, then submitted those false invoices to Fannie Mae for payment.
Dustin used interstate wires to fraudulently submit the invoices to Fannie Mae.
The court also ordered Dustin to serve a term of three years of supervised release, 100 hours of community service, and to pay restitution in the amount of $34,001.25. As part of her sentence, the court also entered a forfeiture money judgment in the amount of $34,001.25, the proceeds of the wire fraud. Dustin had pleaded guilty on June 19, 2018. http://www.mortgagefraudblog.com/?s=Hollie+Darlene+Dustin
This case was investigated by the Federal Housing Finance Agency – Office of Inspector General. It was prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
David Fili, Jr., 48, Drexel Hill, Pennsylvania, was sentenced today to one day in jail and five years of supervised release, with the first 18 months of supervised release to be served on home confinement in multi-million dollar fraud scheme.
Along with George Barnard, 47, Newtown Square, Pennsylvania, Fili owned Capital Financial Mortgage Corporation (“CFMC”), based in Delaware County, Pennsylvania. Between 2005 and March 2013, Fili and Barnard issued refinance mortgage loans to customers of CFMC. Instead of using the money to pay off their customers’ outstanding first mortgages, however, they diverted $9,781,977 to themselves from bank accounts belonging to CFMC and several title companies owned by Barnard. Barnard was previously sentenced to five years in prison for his role in the scheme.
As part of his guilty plea, Fili admitted that he used much of the money he diverted to buy a vacation home and to support his gambling habit (while Barnard used the money he diverted to buy multi-million dollar beach homes in Avalon, New Jersey, several yachts, and to pay the salary of a yacht captain). At the time that the scheme fell apart in March 2013, Fili and Barnard left over two dozen CFMC customers stuck with two mortgages on their homes because CFMC had failed to pay off their customers’ existing first mortgages.
Fili was ordered to forfeit $1,969,312.02, and is jointly and severally liable to pay $9,567,074.56 in restitution. Fili previously entered a guilty plea to ten counts of wire fraud and two counts of bank fraud.http://www.mortgagefraudblog.com/?s=David+Fili%2C+Jr.
U.S. Attorney William M. McSwain made the announcement.
“For many years, Fili defrauded honest, hard-working individuals out of their money so that he could gamble it away and relax in his illegally-obtained vacation home, “ said U.S. Attorney McSwain. “The defendant’s vacation ends now. We are thankful that the Court ordered him to pay millions of dollars as a result of his crimes.”
The case was investigated by the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Allen Seymour, 50 and Tina Seymour, 46, both from Oxford, Massachusetts have been indicted today in connection with a scheme to defraud homeowners and mortgage lenders by providing fraudulent documents in legal and real estate transactions in Cambridge and Brookline, Massachusetts.
The Attorney General’s Office alleges that throughout 2017 and 2018, Allen Seymour repeatedly targeted homeowners, including elderly residents, to fraudulently gain control of residential properties and resell them at a profit to investors. The AG’s Office also alleges that Seymour forged power of attorney documents in the name of homeowners and others to gain control over the seller’s proceeds, and then laundered those funds through third party accounts.
Allen Seymour was arrested in South Carolina in May and is currently being held without bail pending probation surrender hearing scheduled for a later date. Seymour will appear in Worcester Superior Court on January 9, 2019 for a hearing regarding his probation surrender.
The AG’s Office alleges that Allen’s former wife, Tina Seymour, assisted with these forgeries and provided unauthorized access to notary stamps.
In 2010, Seymour previously pleaded guilty and was sentenced to state prison for a similar mortgage fraud scheme prosecuted by the AG’s Office.
Allen Seymour was indicted by a Statewide Grand Jury on charges of Forgery (7 counts), Uttering (5 counts), Larceny over $250 (5 counts), and Money Laundering (5 counts). Tina Seymour was indicted for Conspiracy to Commit Forgery (2 Counts). Allen Seymour will be arraigned in Norfolk Superior Court at a later date. Tina Seymour will be arraigned in Hampden Superior Court at a later date.
These new charges are allegations and the defendants are presumed innocent until proven guilty. The investigation into this matter is ongoing.
Attorney General Maura Healey made the announcement today.
This case is being prosecuted by Assistant Attorneys General Edward Beagan and Sara Shannon of AG Healey’s White Collar & Public Integrity Division, and investigated by Anthony Taylor of the AG’s Financial Investigations Division. The Massachusetts State Police, the Brookline Police, the Cambridge Police, the Federal Bureau of Investigations, and the Horry County Sheriff’s Department of South Carolina assisted with this investigation.
Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; and her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland, were sentenced yesterday to 57 months and 46 months in federal prison, respectively, each followed by three years of supervise release, on conspiracy and wire fraud charges in connection with a foreclosure prevention fraud scheme.
According to the evidence presented at their eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland. Welsh was president and chief executive officer of MJLAG. Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.
Trial evidence proved that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes. Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders. Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.
Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.” The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU. Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, file frivolous lawsuits in local courts, and to stop paying their mortgages. Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes. Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.
The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients. The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.
U.S. District Judge Roger W. Titus sentenced co-conspirator, Carrol Antonio Jackson, a/k/a Jack Jackson, 48, of Hinesville, Georgia, to time served, followed by nine months of home detention as part of three years of supervised release. Finally, Judge Titus ordered that each defendant pay restitution of $491,036.87. A federal jury convicted the three co-conspirators on June 20, 2018. http://www.mortgagefraudblog.com/?s=jordan After the verdict was announced, Judge Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Peter Rendina of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.
United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance. Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who prosecuted the case.
Daniel Sheehan, 44, Gloucester City, New Jersey, was sentenced today after pleading guilty to conspiracy, wire fraud, interstate transportation of stolen property, and smuggling narcotics into a federal prison
The convictions stem from Sheehan’s operation of a scheme to obtain payments from people who sought his assistance in refinancing their home mortgages. Instead of providing the promised assistance, Sheehan stole his clients’ money. As a result of his illegal scheme, 110 people were defrauded, several of whom lost their homes. While being held in a federal prison awaiting trial, Sheehan arranged to smuggle narcotics into the facility for further distribution.
Between September 2012 and February 2015, Sheehan, a mortgage modification professional, represented to clients that he could help them modify their mortgages through the Home Affordable Mortgage Program (“HAMP”) or the Home Affordable Refinance Program (“HARP”). He found clients who wished to refinance the mortgages on their residences or other properties. Sheehan assured his victims that they would qualify for a modification that would substantially reduce both the principal and interest components of the victim’s monthly payment. Sheehan collected a fee of between $700 and $1,500 from each victim for the service of preparing and submitting the paperwork necessary to obtain the promised loan modification.
Despite collecting a fee, Sheehan often failed to submit mortgage refinance applications. In most cases, Sheehan falsely advised his clients that in order to qualify to have their mortgages refinanced, they would need to stop paying their mortgages. These clients generally received correspondence from financial institutions demanding payment and threatening foreclosure. Sheehan explained to his victims that these were scare tactics employed by the banks, and that if the client made any additional payments, the client would jeopardize the mortgage modification process. He also told his clients that they should not communicate with the bank because the collections departments would not have any information about the pending modification. As a direct result, some clients received court foreclosure complaints and told Sheehan; Sheehan assured them that he or his attorney would handle the situation. Instead, Sheehan took no action, and some of his victims were evicted and lost their homes.
Additionally, Sheehan falsely told some clients that their modification had been approved. The defendant often told his clients that their loan modification would not become “final” until they made “trial payments” of their new refinanced mortgage amount. Sheehan told his victims to make these payments to Sheehan or a person designated by Sheehan. Sheehan assured his victims that their “trial payments” would be held in escrow by Sheehan. Although Sheehan sometimes gave his clients what purported to be escrow account statements, he converted his victims’ funds to his own personal use.
Sheehan has been detained at the Federal Detention Center (“FDC”) since April 2016. While incarcerated, the defendant arranged for a friend to illegally send him sheets of the drug Suboxone. On about August 29, 2016, a letter addressed to Sheehan arrived at the FDC purportedly from an attorney in New Jersey. The letter contained eight sheets of Suboxone, which Sheehan intended to use to pay off gambling debts that he owed to other inmates at the FDC.
Sheehan was sentenced to 121 months’ imprisonment and ordered to forfeit $493,075 in criminal proceeds. Sheehan was also sentenced to a term of three years’ supervised release after his term of imprisonment.
U.S. Attorney William M. McSwain made the announcement.
“This defendant has absolutely no shame,” said U.S. Attorney McSwain. “His victims were often looking to refinance mortgages on their homes due to tragic personal circumstances, such as the death of a spouse or the loss of employment. The defendant repeatedly lied and said he would help them, but instead preyed on their vulnerability and made many of them lose their homes. He is a menace to society who has no respect for the law.”
“What Daniel Sheehan did to his victims was despicable,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “In feigning assistance with refinancing their mortgages, he gave people hope that better days were ahead. Instead, he blithely pocketed their money despite knowing foreclosure loomed. The FBI takes great pride in bringing defendants like Mr. Sheehan to justice.”
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Paul G. Shapiro.
Geo Geovanni, 49, Moultrie, Georgia was found guilty of one count of conspiracy to commit bank fraud and three counts of bank fraud.
According to testimony and evidence presented at trial, Geovanni was a real estate broker who owned his own brokerage firm based in Orlando, Florida. Between May and August 2008, Geovanni sold condominium units to buyers at The Landing, located in Altamonte Springs, Florida. Geovanni engaged in a conspiracy to conceal from mortgage lenders sales incentives that he provided to the buyers. These undisclosed incentives included making the buyers’ down payments and paying kickbacks after closing. As a result of his actions, Geovanni helped cause the loss of approximately $761,150 to JP Morgan Chase Bank and Wells Fargo Bank when the mortgages involved in the fraudulent transactions went into foreclosure.
He faces a maximum penalty of 30 years’ imprisonment for each count. His sentencing hearing has been scheduled for February 25, 2019.
United States Attorney Maria Chapa Lopez made the announcement.
This case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Special Assistant United States Attorney Joseph Capone.
Rodrigo Pardo, 46, Argentina, and Lorena Medina, 46, Ecuador, pleaded guilty today to conspiracy to commit wire and bank fraud for orchestrating a loan modification scheme.
According to court documents the pair defrauded homeowners in Northern Virginia and mortgage lenders by promising the homeowners to assist them in obtaining loan modifications. As part of the scheme, Pardo and Medina agreed to negotiate with the homeowners’ lenders for a reduced monthly payment. Pardo and Medina then instructed clients who were current on their mortgages to stop making payments to their lenders as they had in the past, and instead make payments into accounts controlled by Medina, Pardo, or COFS, a company they controlled. At the same time, Pardo and Medina represented to their clients’ mortgage lenders that COFS was authorized to negotiate loan modifications, but concealed from the mortgage lenders that they were receiving mortgage payments from the victims. As a result, Pardo and Medina received over $140,000 in payments from their victims, which they used for personal expenses.
Pardo and Medina pleaded guilty to conspiracy to commit wire and bank fraud and face a maximum penalty of 30 years in prison when sentenced on March 1, 2009. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and Robert Manchak, Acting Special Agent in Charge, Office of Inspector General for the Federal Housing Finance Agency, made the announcement after Senior U.S. District Judge T.S. Ellis III accepted the plea. Assistant U.S. Attorney Kimberly R. Pedersen and Special Assistant U.S. Attorney Charlie Divine are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-181.