Ginger Lynn Cunningham, 39, formerly of Hendersonville, North Carolina and currently residing in Brevard, North Carolina was sentenced yesterday, for selling fake title insurance policies.

According to information contained in filed court documents and presented in court during Cunningham’s sentencing hearing, Cunningham owned and operated Blue Ridge Title Company, an independent title insurance agency located in Buncombe County, North Carolina. Beginning in February 2015, Cunningham became an authorized independent agent for Commonwealth Land Title Insurance Company (Commonwealth).  As an authorized agent, Cunningham’s title agency sold title insurance policies underwritten by Commonwealth and collected premium payments during real estate closings.  Under the agreement with Commonwealth, Cunningham’s Blue Ridge Title Company would keep 80% of the premium payments, and the remaining 20% would be sent to Commonwealth. On or about March 21, 2016, Commonwealth terminated their agreement with Blue Ridge Title Company, because Cunningham failed to submit premium payments as required to Commonwealth.  At the time of termination, Blue Ridge Title Company owed Commonwealth in excess of $25,000 in premium payments.

According to court documents, from March 2016 until October 2017, Cunningham continued to represent herself and Blue Ridge Title Company to be an independent agent of Commonwealth, despite knowing that she no longer had any relationship with Commonwealth, and continued to sell fictitious title insurance policies and collect premium payments. The buyers of these bogus title insurance policies did not know that they were not underwritten by any insurance provider, and thus had no value.  Court records show that Cunningham further deceived her customers by drafting official looking, but fictitious, policy documents that bore the name of Commonwealth Land Title Insurance Company and fabricated policy numbers.  Cunningham kept 100% of the premium payments associated with these worthless policy sales.  As court records show, during the relevant time period, Cunningham sold at least 973 counterfeit title insurance policies and received at least $412,344 in premiums for the bogus policies. On October 28, 2019, Cunningham pleaded guilty wire fraud.

The announcement was made by Andrew Murray, U.S. Attorney for the Western District of North Carolina.

In addition to the prison term imposed, Cunningham was ordered to serve three years under court supervision and to pay $412,344 as restitution.

In making today’s announcement U.S. Attorney Murray commended the U.S. Department of Housing and Urban Development, Office of Inspector General, the Federal Housing Finance Agency, Office of Inspector General, and the North Carolina Department of Insurance for their investigation of this case.

Assistant United States Attorney Don Gast, of the U.S. Attorney’s Office in Asheville, prosecuted the case for the United States.

Wesley T. Bishop, 52, New Orleans, Louisiana was sentenced to four years of probation for making a false statement.

Bishop admitted to knowingly and willfully making a false, material statement to the United States Department of Housing and Urban Development (“HUD”) in connection with rental property that he owned.

As explained by FBI New Orleans Special Agent in Charge Bryan Vorndran, “Former State Senator Bishop made false statements on HUD paperwork which resulted in Bishop receiving a forgivable $188,000 loan under the “road home” program.”

Pursuant to the plea agreement, Bishop has agreed to pay restitution of $188,000 to the State of Louisiana, Division of Administration, Office of Community Development, which administers the subject Small Rental Property Program on behalf of HUD.  In addition to probation, Bishop has been ordered to pay a $100.00 special assessment fee.

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

U.S. Attorney Strasser praised the work and tireless efforts of the HUD Office of Inspector General and the FBI in investigating, and of Assistant United States Attorney Andre J. Lagarde in prosecuting this matter.

Willis Edwards III, 49, formerly of East Orange, New Jersey, and currently of Lithonia, Georgia, the former acting business administrator for the Township of Orange, New Jersey, has been charged in a 28-count indictment with conspiracy, bribe-taking, money and property fraud, federal tax fraud, and making false statements in connection with a mortgage.

According to documents filed in this case:

In January 2015, Edwards had his friend, Franklyn Ore, from Urban Partners LLC (Urban Partners), using cash provided by Edwards, funnel to himself a stream of concealed kickbacks in exchange for Edwards’ official action as an Orange public official and assistance in the affairs of Orange and in violation of his duties in connection with:

  • A Saturday literacy program for which Orange and the Orange Public Library were awarded a $50,000 Community Development Block Grant, funded by the U.S. Department of Housing and Urban Development (HUD) and administered by Essex County, to provide tutoring services for low and moderate-income families (the Saturday Literacy Program);
  • A project for which an urban planning company located in Montclair, New Jersey, had received a one-year, $150,000 contract from Orange to provide professional economic planning services to analyze the conditions within the Central Orange Redevelopment Area (the “redevelopment project”); and
  • A project to acquire the Orange YWCA building and develop it into a community recreation center.

Making False Statements in Connection with a Mortgage

In 2014, Edwards also made false statements to obtain mortgage relief on a $248,000 30-year mortgage loan that he obtained in 2005 to purchase a residence in East Orange, New Jersey. As of February 11, 2014, Edwards had fallen substantially in arrears on his mortgage payments. On April 7, 2014, Edwards submitted a completed Request for Mortgage Assistance form to the mortgage servicer. Edwards disclosed that he was employed by Orange and falsely indicated that he did not have a second employer, when, at the time, he also was employed by a New Jersey County College at an annual salary of approximately $45,000. On October 8, 2014, Edwards and the mortgage servicer entered into a Home Affordable Modification Agreement. In reliance upon false representations made by Edwards, the mortgage servicer provided the following benefits, among others, to Edwards: (1) $95,590 of Edwards’s debt was forgiven between July 2015 and July 2017, and (2) the real estate property was taken out of foreclosure.

The Saturday Literacy Program Fraud and Kickbacks

Despite knowing that Urban Partners did not provide any services to the library in connection with the Saturday Literacy Program, Edwards caused false and fraudulent vouchers to be submitted in March 2015 and in May 2015 to Essex County seeking Saturday literacy grant funds for expenses purportedly paid to Urban Partners. In support of the fraudulent vouchers, Edwards had phony documents submitted to Essex County, including: (1) a sham contract between Urban Partners and the library, backdated to over six months before Urban Partners had been formed, (2) false statistical data about the children who supposedly attended the literacy sessions, (3) fake Urban Partners invoices, and (4) backdated library checks payable to Urban Partners that had not been negotiated when submitted to Essex County to give the false impression that the Library had paid Urban Partners, when it had not done so.

Between April 2015 and June 2015, Essex County provided the Library with $50,000 in HUD funds for the Saturday Literacy Program. Between May 2015 and August 2015, Edwards caused the library to pay Urban Partners approximately $36,000, despite knowing that Urban Partners had not provided the library with any services in connection with the Saturday Literacy Program. Edwards received kickbacks from Ore from the money paid to Urban Partners by the library. At Edwards’s direction, Ore also provided a portion of the proceeds from the library to an associate of Edwards. Ore spent the remaining proceeds for his own personal benefit.

The Redevelopment Project Fraud and Kickbacks

Edwards used his influence as an Orange public official to arrange for the planning company to hire Urban Partners after the planning company had received its contract with Orange. Ore provided services to the Planning Committee and, between August 2015 and February 2016, the planning company, which was receiving payments from Orange, paid Urban Partners $33,220. Edwards received kickbacks from Ore from the money that the planning company paid to Urban Partners.

The YWCA Project Fraud and Kickback

In December 2015, aware that his resignation as an Orange public official would become effective on December 31, 2015, Edwards took further steps to use his position for corrupt and fraudulent purposes. Edwards advised Ore that Edwards had access to Orange discretionary funds and wanted to use them by the end of the year. At Edwards’s instruction, Ore generated and submitted a fraudulent invoice from Urban Partners to Orange, billing Orange $16,800 for services purportedly related to the YWCA Project. Edwards, knowing that no services has been rendered, approved the issuance of a purchase order and Orange paid Urban Partners $16,800.  On December 30, 2015, Edwards received a substantial amount of the $16,800 in a kickback from Ore.

The Plagiarism Scheme

From June 2015 to June 2016, Edwards duped Orange into making payments to a consultant, which were, at least in part, for academic papers that the consultant arranged to have written for Edwards. Edwards, who was enrolled in a graduate program at a university in New Jersey, plagiarized the papers that Orange paid for and passed them off as his own work. Between December 2015 and March 2016, with Edwards’s approval, the consultant submitted three fraudulent invoices to Orange calling for payments of $12,000, $16,000, and $10,000 for purported professional services. Orange paid the money to the consultant and Edwards received from the consultant academic papers that had been written for him. On June 20, 2016, Edwards submitted several papers which were virtually identical to the papers that he had received from the consultant. In emails to the professors, to which the papers were attached, Edwards asked the professors to grade the attached outstanding assignments so that he did “not receive a failing grade for all of the hard work that [he had] done.”

The Graduate School Payments Scheme

The indictment also charges Edwards with fraud in connection with funding his graduate studies. Between December 2015 and July 2016, Edwards engaged in a scheme to defraud Orange of $25,142 in payments to himself and University 1 related to Edwards’s graduate courses there and at another university in New Jersey through the use of a fraudulent approval memorandum. In February 2016, when Edwards was no longer an Orange public official, he dictated the following language to an employee in Orange’s Finance Department (Orange Employee 1) for use in a fraudulent approval memorandum addressed to Edwards: “As per the employee handbook, this memorandum serves as consent for you [Edwards] to enroll in the courses as discussed. Please forward the invoices to process for payment.” Edwards instructed Orange Employee 1 to backdate the memorandum to Aug. 17, 2015, to give the false impression that Edwards had received approval for Orange to pay for academic courses in which he had enrolled.

On February 10, 2016, at Edwards’s direction, Orange Employee 1 sent an email to a senior public official in the office of the Mayor of Orange (Orange Employee 2) containing a draft of the fraudulent approval memorandum. Orange Employee 2 later provided Orange Employee 1 with a final copy of the fraudulent approval memorandum on Orange letterhead, purportedly from the Mayor of Orange, addressed to Edwards, and backdated to August 17, 2015. It included the language that Edwards dictated to Orange Employee 1 and bore the stamp of the initials of the Mayor of Orange to give the false impression that the Mayor of Orange had approved Edwards’s reimbursement for the courses, when the Mayor of Orange had not done so.

Federal Tax Fraud

Edwards also caused a false 2015 federal tax return to be filed with the IRS. From January 2016 to April 15, 2016, Edwards conspired with his tax return preparer, Zenobia Williams, to defraud the United States and the IRS by claiming bogus labor expenses of $27,055 for his business, Natural Care Municipal Cleaning Services LLC (Natural Care), on that tax return. In addition to falsifying business expenses, Edwards also underreported Natural Care’s income. He reported $40,000 in gross receipts, when Natural Care actually received approximately $52,000 in payments from a New Jersey law firm and approximately $32,500 in payments from a local Board of Education. Edwards also did not report the ill-gotten gains that he obtained in 2015 in connection with the Saturday Literacy Program, the Redevelopment Project, and the YWCA Project.

The charges carry the following maximum potential penalties:

Offenses Charged Maximum Term of Imprisonment Maximum Fine
False statement concerning a mortgage 30 years $1,000,000
Conspiracy to commit wire fraud or wire fraud and mail fraud 20 years $250,000
Wire fraud 20 years $250,000
Mail fraud 20 years $250,000
Theft from a federally-funded local government 10 years $250,000
Bribery in connection with the business of a federally funded local government 10 years $250,000
Conspiracy to defraud the United States and the IRS Five years $250,000
Subscribing to a false tax return Three years $250,000
     

On January 13, 2020, Ore entered a guilty plea to an information charging offenses related to the Saturday Literacy Program, the Redevelopment Project, and the YWCA Project. On February 13, 2020, Timur Davis, the former Executive Director of the Orange Library, entered a guilty plea to an information charging an offense related to the Saturday Literacy Program and another HUD-funded program to replace an HVAC/Chiller unit at the Library. On December 30, 2019, Williams entered a guilty plea to conspiring to defraud the United States and the IRS.

Edwards was charged with 14 counts of wire fraud, two counts of bribery in connection with the business of a federally funded local government, two counts of theft from a federally funded local government, two counts of mail fraud, two counts of false statements concerning a mortgage, one count of bribery in connection with the business of a federally funded local government and organization, one count of theft from a federally funded local government and organization, one count of conspiracy to commit wire fraud, one count of conspiracy to commit wire fraud and mail fraud, one count of conspiracy to defraud the United States and the IRS, and one count of filing a false tax return. A date for Edwards’ arraignment has not yet been scheduled.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Cari Fais and J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Blanca A. Medina, 54, Manalapan, New Jersey, pleaded guilty today, admitting her role in a scheme to defraud a financial institution of hundreds of thousands of dollars.

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

From 2015 to 2018, Medina conspired with others to fraudulently obtain mortgage loans from “Mortgage Lender A” in Monmouth County to finance the purchase of properties by unqualified buyers. Applicants for mortgage loans are required to list their assets and income on their mortgage loan applications, and mortgage lenders rely on those applications when deciding whether to issue mortgage loans.

Medina, a former loan officer for Mortgage Lender A, admitted to participating in a conspiracy in which she knowingly caused completed mortgage loan applications that contained multiple misrepresentations of material facts regarding the buyers’ assets and income to be submitted to Mortgage Lender A. A conspirator provided Medina with false and fraudulent documents for potential borrowers including false and fraudulent lease agreements, bank statements, and a gift check and gift letter. Based on these lies, Mortgage Lender A issued mortgage loans to unqualified buyers, which caused Mortgage Lender A hundreds of thousands of dollars in losses.

The conspiracy charge to which Medina pleaded guilty carries a maximum of 30 years in prison and a $1 million fine. Sentencing is scheduled for October 20, 2020.

U.S. Attorney Craig Carpenito made the announcement.

Medina was charged before U.S. District Judge Stanley R. Chesler in Newark federal court to a one-count information charging her with conspiracy to commit bank fraud.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and Special Agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jonathan Fayer of the Economic Crimes Unit of the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing Finance Agency, Office of Inspector General.

Jonathan Marmol, 41, Odessa, Florida has been sentenced to 15 months in federal prison and Mordechai Boaziz, 67, Miami Beach, Flordia, to 90 days in federal prison for conspiracy to make false statements to financial institutions.

According to court documents, beginning around the summer of 2006, and continuing through August 2008, Boaziz and Marmol conspired with others to execute a scheme to influence the credit decisions of financial institutions in connection with the sale of condominium units at The Preserve at Temple Terrace, a 392-unit condominium complex located in Temple Terrace, Florida. Boaziz was a real estate developer converting The Preserve from an apartment complex into a condominium complex. Boaziz, the leader and organizer of the fraud scheme, hired Marmol to market the condominium units at the complex.

In order to recruit and entice otherwise unqualified buyers to purchase units at The Preserve, the conspirators offered to pay the prospective buyers’ down payments (“cash-to-close”). The conspirators then intentionally concealed the cash-to-close payments from the financial institutions that originated and funded the related mortgage loans.

In particular, the HUD-1 Settlement Statements submitted to the financial institutions falsely stated that the buyers brought their own cash-to-close funds to purchase the units, which influenced the financial institutions’ mortgage loan approval decisions. In reality, Boaziz funded the buyers’ cash-to-close and routed the payments through Marmol and others. Boaziz caused approximately $5.36 million in losses, and Marmol caused approximately $330,000 in losses to the victim financial institutions who financed the units at The Preserve.

Marmol and Boaziz had pleaded guilty to the offenses in November 2019. http://www.mortgagefraudblog.com/?s=Jonathan+Marmol

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 and Assistant United States Attorney Jay L. Hoffer.

 

Ronald J. McCord, 69, Oklahoma City, Oklahoma, was charged yesterday with defrauding two locally-based banks, Fannie Mae, and others. The charges include bank fraud, money laundering, and making a false statement to a financial institution.

McCord was the former President of First Mortgage Company, LLC (“FMC”), an Oklahoma City, Oklahoma based mortgage lending and loan servicing company.  The Indictment alleges a broad range of fraudulent conduct spanning approximately three years.

McCord is charged in Counts 1 through 7 with defrauding Spirit Bank (“Spirit”) and Citizens State Bank (“Citizens”), two state-chartered financial institutions, as well as their respective residential mortgage subsidiaries, American Southwest Mortgage Corporation (“Mortgage Corp.”) and American Southwest Mortgage Funding Corporation (“Funding Corp.”).  According to the Indictment, in approximately June 2016, an independent audit discovered that McCord had sold more than $14,100,000.00 in Spirit/Mortgage Corp., and Citizens/Funding Corp., loans “out of trust” by failing to repay Spirit/Mortgage Corp., when certain Spirit/Mortgage Corp., initiated loans were refinanced or otherwise paid off.  At the time of this discovery, FMC carried outstanding balances of about $200,000,000.00 and $140,000,000.00 on the Spirit/Mortgage Corp. and Citizens/Funding Corp. lines of credit, respectively.

According to the Indictment, this discovery prompted further internal review.  An internal audit revealed that McCord had misappropriated additional Spirit/Mortgage Corp. and Citizens/Funding Corp. loans by: (1) using FMC’s warehouse line of credit with (i.e., obtaining mortgage loans from) Spirit/Mortgage Corp. or Citizens/Funding Corp., selling those Spirit/Mortgage Corp. or Citizens/Funding Corp. loans to Fannie Mae, then resubmitting the loan documents to Spirit/Mortgage Corp. or Citizens/Funding Corp. to receive additional money from the Spirit/Mortgage Corp. or Citizens/Funding Corp. line of credit; (2) using FMC’s warehouse line of credit with Spirit/Mortgage Corp. or Citizens/Funding Corp. to refinance the resulting loans without repaying Spirit/Mortgage Corp. or Citizens/Funding Corp. the originally loaned funds; (3) using FMC’s Spirit/Mortgage Corp. or Citizens/Funding Corp. line of credit to fund mortgages to borrowers, receiving payments from those borrowers, but never repaying Spirit/Mortgage Corp. or Citizens/Funding Corp.; (4) obtaining funds from Spirit/Mortgage Corp. or Citizens/Funding Corp. for loans that never closed, then failing to return the funds to Spirit/Mortgage Corp. or Citizens/Funding Corp.; and (5) using FMC’s warehouse lines of credit with Spirit/Mortgage Corp. and Citizens/Funding Corp. to “double fund” loans by obtaining funds from both financial institutions to fund the same loans.

The Indictment alleges that McCord’s actions involved Spirit/Mortgage Corp. and Citizens/Funding Corp. loans that totaled approximately $40,000,000.00, in addition to the more than $14,100,000.00 in Spirit/Mortgage and Citizens/Funding Corp. loans that McCord had sold out of trust.

The Indictment further alleges that, upon learning of McCord’s conduct, Spirit/Mortgage Corp., and Citizens/Funding Corp., terminated future warehouse lending to FMC, and instituted new notification requirements that required McCord to assign FMC-funded mortgages to Spirit/Mortgage Corp. and Citizens/Funding Corp., to ensure that the title companies handling those mortgages sent payoffs directly to the banks.  Though McCord filed the assignments as required, his employees contacted the title companies handling the mortgages and directed payments to FMC, not Spirit/Mortgage Corp. and Citizens/Funding Corp.  McCord continued to collect loan payoffs without repaying Spirit/Mortgage Corp. and Citizens/Funding Corp.  He then signed releases on the assigned mortgages after receiving the payoffs, subjecting the properties to potential foreclosure should Spirit/Mortgage Corp. or Citizens/Funding Corp. try to collect payments on the mortgages, to which they held title.

According to Count 8 of the Indictment, Spirit/Mortgage Corp., and Citizens/Funding Corp.’s refusal to fund new FMC mortgages prompted McCord to seek out a new warehouse lender.  In early 2017, McCord began negotiating with CapLOC, LLC, a North Carolina based mortgage lending business, and offered to sell FMC’s mortgage lending business in exchange for quick funding from CapLOC.  In the course of those negotiations, McCord made false statements and representations to obtain CapLOC funds.  McCord then used the money to repay Spirit/Mortgage Corp. part of his outstanding $40,000,000.00 debt.

Finally, the Indictment alleges that, in 2017, FMC serviced approximately 12,000 loans worth a total of approximately $1,800,000,000.00 for the Federal National Mortgage Association (“Fannie Mae”).  Counts 9 through 24 of the Indictment allege that McCord defrauded Fannie Mae by diverting escrow monies intended to pay homeowners’ taxes, insurance, principal, and interest, to cover FMC’s operating expenses.  As a result, McCord bounced checks to more than sixty taxing authorities and borrowers throughout the Oklahoma City area and elsewhere missed making their tax payments.  The Indictment further alleges that McCord laundered the stolen escrow monies by using the funds to write himself checks, pay more than half the purchase price of his son’s $900,000.00 Oklahoma City home, and build a custom vacation home in Colorado.

With regard to the bank fraud and false statement to a financial institution charges in the Indictment, McCord faces up to 30 years in prison and a fine of up to $1,000,000.00 on each count.  He also faces up to 10 years in prison and a $250,000 .00 fine on to each of the money laundering counts. Furthermore, the Indictment seeks forfeiture from McCord in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.

The announcement was made by Timothy J. Downing, United States Attorney for the Western District of Oklahoma.

This case is the result of an investigation by the Federal Housing Finance Agency Office of the Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, and the Federal Bureau of Investigation Oklahoma City Field Office.  It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.

Reference is made to the Indictment and other public filings for further information.  An indictment is only a charge and is not evidence of guilt.  A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.  To download a photo of U.S. Attorney Downing, click here.

Gabriel T. Tavarez, 40, the principal and co-founder of a North Andover, Massachusetts mortgage short sale assistance company pleaded guilty today in connection with defrauding mortgage lenders and investors out of nearly $500,000 in proceeds from about 90 short sale transactions.

Tavarez founded and co-operated Loss Mitigation Services, LLC, with co-conspirator Jaime L. Mulvihill, 40, North Andover, Massachusetts who previously pleaded guilty and was sentenced in February 2020 to six months in prison.

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, Tavarez and Mulvihill, 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 Tavarez or Mulvihill, or others working with them, 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, Tavarez or Mulvihill 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. Tavarez and Mulvihill 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. In addition, Tavarez created, or directed others to create, fake letters from mortgage brokers claiming that the brokers had approved buyers for financing, in order to convince mortgage lenders to approve the additional fees. http://www.mortgagefraudblog.com/?s=Gabriel+T.+Tavarez

The charge of conspiracy to commit wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss. The charge of aggravated identity theft carries a mandatory two-year sentence that must run consecutively to any other sentence imposed, one year of supervised release, and a fine of $250,000, or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Tavarez is scheduled for sentencing on October 7, 2020.

United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Robert Manchak, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region; 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.

James Lee Clark, 59, Wilton Manor, Florida has been charged with one count of conspiracy to commit bankruptcy fraud, seven counts of bankruptcy fraud, one count of making a falsification of records in a bankruptcy proceeding, and eight counts of wire fraud.

According to the indictment, from January 2010 through February 2017, Clark conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors, such as Fannie Mae, who were holding mortgage notes on properties that were in foreclosure. The indictment further charges that Clark and Liebman falsely and fraudulently represented to the distressed homeowners facing foreclosure that, in exchange for executing quitclaim or warranty deeds for their properties to an entity controlled by Liebman, they would negotiate with the mortgage creditors to prevent foreclosures. Clark and Liebman convinced the distressed homeowners to pay them rent, or agree to put their houses up for sale. In order to continue to collect ill-gotten rents, or profit from the sale of the properties, Clark allegedly filed fraudulent bankruptcy petitions in the names of the homeowners to prevent the mortgage creditors from lawfully foreclosing and taking title to the property. In some instances, Clark filed multiple fraudulent petitions in the names of distressed homeowners.

Additionally, it is further alleged that, from January 2012 to February 2017, Clark, who was a licensed attorney, defrauded his clients out of approximately $1.3 million. As part of his practice, Clark would act as a trustee for his clients and also hold their money in various bank accounts depending on the purpose of trust.  Instead of using the funds for the purpose intended by his clients, Clark would divert the money into his law firm’s bank accounts and pay for personal expenses, such as gambling, travel, and automobiles.

Liebman pleaded guilty to one count of conspiracy to commit bankruptcy fraud on September 24, 2019. His sentencing hearing is scheduled for January 14, 2021.

United States Attorney Maria Chapa Lopez made the announcement.

If convicted, Clark faces up to 20 years’ imprisonment for the falsification of records count and for each wire fraud count. He faces up to 5 years in federal prison for the conspiracy count, and for each bankruptcy fraud count. The indictment also notifies Clark that the United States is seeking a money judgment of $1.3 million, the proceeds of the charged criminal conduct.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. The Office of United States Trustee for the Middle District of Florida, Tampa Division provided substantial investigative assistance. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

 

Carlo Hamrahi, Los Angeles, California, was arrested for bilking Florida seniors, on a warrant issued out of Lee County, Florida. The arrest follows an investigation by DFS and OSP uncovering massive mortgage fraud targeting dozens of seniors.

According to an investigation, Hamrahi, using the alias Roberto Colleoni, defrauded home and business owners in Florida by claiming to be a mortgage fraud investigator. Hamrahi promised targets he could get mortgage payments reduced or eliminated by discovering fraud in loan documents. Hamrahi invited victims to seminars and solicited thousands of dollars in upfront fees for these fraudulent services. Hamrahi defrauded at least 24 victims, many 60 or older.

Authorities in California convicted Hamrahi twice previously of similar crimes on the West Coast. Indiana authorities also convicted Hamrahi on similar charges.

Attorney General Ashley Moody’s Office of Statewide Prosecution and Chief Financial Officer Jimmy Patronis’s Department of Financial Services made the announcement.

Attorney General Ashley Moody said, “For many seniors, their homes are their most valuable asset and a cornerstone of their retirement plan. The defendant in this case used the allure of reducing or eliminating mortgage payments to defraud Florida seniors. He promised them financial freedom and in doing so risked losing his own freedom for decades to come. I want to commend my Statewide Prosecutors and DFS investigators for their diligent efforts in this case. I also want to thank California authorities for apprehending the suspect.”

Chief Financial Officer Jimmy Patronis said, “Orchestrating a fraud scheme to take advantage of Floridians is despicable and it’s especially heinous when it’s our seniors who fall victim. These individuals worked their entire lives to build a nest egg and unfortunately scam artists like this will do anything to steal their money. I thank Attorney General Moody’s Office and my fraud investigators for their hard work together in uncovering this scheme and bringing this fraudster to justice.”

Hamrahi is charged with one count of being involved in an organized scheme to defraud, in violation of F.S. 817.034(4)(1). If convicted, Hamrahi faces up to 30 years in prison. Attorney General Moody’s Assistant Statewide Prosecutor Russell C. Stoddard will prosecute the case.

Tina Brown, 45, Bronx, New York, who was convicted of conspiracy to commit wire fraud affecting a financial institution, was sentenced today to six months home detention.

Between about June 2008 and February 2009, the defendant conspired with others to devise a scheme to commit mortgage fraud and obtain eight loans for unqualified borrowers for homes in the Bronx, New York. As part of the scheme, Brown used a relative to purchase a property located at 4087 Edson Avenue, Bronx, New York. The defendant falsely verified that the purchaser worked for her own company in order fraudulently to inflate the purchaser’s income so that she would qualify for a mortgage for that property. Brown 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 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 her co-conspirators arranged for additional fraudulent loans to be approved. These fraudulent transactions caused losses of approximately $244,000 to M&T Bank, Citibank, and the U.S. Department of Housing and Urban Development.

Four co-defendants were previously convicted and sentenced: Gregory Gibbons, a mortgage broker, was sentenced to time served; Laurence Savedoff, an attorney, was sentenced to serve four months in prison; Julio Rodriguez, an appraiser, was sentenced to serve six months in prison; and Daniel Badu, a borrower, was sentenced to time served. Defendant Alagi Samba has been convicted and is awaiting sentencing.

The defendant was also ordered to pay restitution totaling $220,042.17 to the U.S. Department of Housing and Urban Development and Citibank.

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

The sentencing is the result of an investigation by the United States Postal Inspection Service, Boston Division, under the direction of Inspector-in-Charge Joseph W. 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, under the direction of Special Agent-in-Charge Gary Loeffert.