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A seven-count Indictment has been unsealed charging 12 individuals-including mortgage brokers, loan officers, and attorneys-with engaging in a scheme to defraud various lending institutions by using fictitious identities and documents to obtain more than $9 million in residential mortgages. All 12 defendants have been arrested and are expected to be presented in federal court.

The defendants are alleged in the Indictment to have played the following roles in the mortgage fraud scheme:

Jeffrey Larochelle, 29, Bay Shore, New York, processed loans through Reliable Capital, a mortgage brokerage firm. Larochelle identified target properties, supervised and coordinated the creation of false information for straw identities and the submission of fraudulent loan applications and other documents to lenders, and coordinated the activities of other co-conspirators.

Eric Finger, 44, an attorney from Mineola, New York, acted as the settlement agent on behalf of the lender in connection with closings on many of the target properties. Among other things, Finger made payments from mortgage loan proceeds to other members of the conspiracy and hid the true disbursements of the loan proceeds from lenders by preparing false mortgage documents.

Denise Parks, 43, Olive Branch, Mississippi, processed loans through Atlas Home Equities. Parks prepared fraudulent mortgage loan applications and falsely verified the employment and residential information for various straw identities.

Foriduzzaman Sarder, 40, Jackson Heights, New York, coordinated the use of various straw identities to buy homes with residential mortgage loans. Sarder gave his contact information to mortgage brokers and mortgage lenders to provide verification of the loan application information of certain straw identities.

Sakat Hossain, 43, Jackson Heights, New York, posed as several different straw identities purportedly buying various target properties. In exchange for posing as the straw identities, Hossain received payments from the loan proceeds.

Mikaek Huq, 34, Astoria, New York, among other things, created false identification documents in the names of straw identities for use at closings for target properties.

Reginald Johnson, 36, St. Albans, New York, controlled the Hempstead office of Reliable Capital. Among other things, JOHNSON prepared fraudulent mortgage loan applications and falsely verified the employment and/or residential information submitted in connection with the applications.

Frederick Warren, 35, Miller Place, New York, processed loans through Reliance Capital and other brokers. Warren prepared and processed fraudulent mortgage loan applications and participated in identifying target properties.

Dorian Brown, 36, Mount Sinai, New York, was a loan officer at Lend America, a mortgage lender and broker located in Long Island, New York. Brown identified target properties, processed fraudulent mortgage loan applications, and coordinated the use of the false identities.

Fritz Bonaventure, 28, Lithonia, Georgia, was an independent contract employee at Lend America. Bonaventure identified target properties, coordinated the use of false identities and fraudulent identification documents, and provided information about the straw identities to mortgage brokers, loan officers and loan processors.

Joell Barnett, 36, an attorney from Brooklyn, New York, acted as either the buyer’s or seller’s attorney in connection with the sale of some of the target properties. BARNETT, among other things, received payments from the loan proceeds which were not disclosed to lenders and disbursed those funds to other members of the conspiracy.

Brandon Lisi, 36, an attorney from Glen Cove, New York, prepared sale contracts for the purchase of target properties and procured straw buyers to act as purchasers for target properties.

As alleged in the Indictment filed in Manhattan federal court:

The defendants and their co-conspirators purchased dozens of residential properties throughout New York City and Long Island, New York with fraudulent mortgages. These mortgages, which amounted to 100 percent of the purchase price of the residences, were obtained using names of fictitious individuals or individuals whose identification information was misappropriated or misused.

To facilitate the fraud, the defendants provided the lending institutions with false identification documents, such as false driver’s licenses and social security cards; false employment, income, and rental information; and fraudulent bank statements. Most of the loans are now in default.

The charges contained in the Indictment include one count of conspiracy to commit bank fraud and wire fraud, one count of bank fraud, and five counts of wire fraud. A chart of the charges contained in the Indictment and the corresponding maximum potential penalties for each defendant is attached to this press release.

Of the 12 defendants arrested, Larochelle, Finger, Sarder, Hossain, Huq, Johnson, Warren, Brown, Barnett, and Lisi are expected to be presented in Manhattan Federal Court. Bonaventure and Parks are expected to be presented in federal court in the Northern District of Georgia and the District of Mississippi, respectively.

The filing of the charges is the culmination of a longterm investigation conducted by the United States Attorney’s Office for the Southern District of New York, the New York State Attorney General’s Office, the New York State Banking Department’s Criminal Investigations Bureau, the FBI, the USSS, and the USPIS. Valuable assistance also was provided by Department of Homeland Security’s United States Immigration and Customs Enforcement, the New York State Department of Motor Vehicles, the New York City Department of Probation, and the Social Security Administration.

Preet Bharara, the United States Attorney for the Southern District of New York, Andrew Cuomo, the Attorney General of the State of New York, Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), Richard H. Neiman, the Superintendent of Banks for New York State, Brian G. Parr, the Special Agent-in-Charge of the New York Field Office of the United States Secret Service (“USSS”), and Ronald J. Verrochio, the Inspector-in-Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced the indictments.

Mr. Bharara thanked all of the federal, state, and local law enforcement agencies involved in the investigation for their outstanding work. He added that the investigation is continuing.

“The U.S. economy is still reeling from the damage done by mortgage fraud schemes like the one unraveled today. These charges expose the corrupt conduct of industry insiders who allegedly manipulated the mortgage markets to fraudulently obtain millions in loans. What is especially disturbing is that two of the alleged fraudsters were attorneys who used their law degrees to cheat the system and line their pockets. We will continue to prosecute corrupt custodians of the mortgage markets to the full extent of the law because our financial system depends on it,” said Preet Bharara.

“This is exactly the type of criminal activity that was caused by-and contributed to-the terrible mortgage crisis facing our nation. These defendants were allegedly able to obtain millions of dollars in home loans for phantom buyers precisely because obtaining these loans was far too easy at the time. As we work to reform our nation’s mortgage regulation, law enforcement must continue to collaborate to ensure that those who exploited the system for their personal financial gain are brought to justice,” said Andrew Cuomo, the Attorney General of the State of New York

“The scheme alleged in the indictment is a model of vertical integration. There were corrupt participants at each step of the mortgage process, from buyers to lenders to lawyers. The one obvious flaw in their scheme was that they got caught,” said Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation.

“This multifaceted mortgage fraud scheme represents one of the most egregious types of criminal behavior since it involves attorneys and brokers who, instead of being the gatekeepers that protect our financial system, abused their positions and joined a conspiracy to steal millions of dollars. I am proud of the outstanding work the Banking Department’s Criminal Investigation Bureau has performed since the inception of this investigation and thank the SDNY, FBI and NYSAG’s office and our other law enforcement partners that worked with us on this investigation,” said Richard H. Neiman, the Superintendent of Banks for New York State.

“Mortgage fraud is a continuing threat to our nation’s financial system, compromising the identities of ordinary citizens. The Secret Service is committed to investigating these types of crimes, utilizing strong interagency partnerships, in order to bring these perpetrators to justice,” said Brian G. Parr, the Special Agent-in-Charge of the New York Field Office of the United States Secret Service.

“The Postal Inspectors will aggressively pursue these cases to ensure public confidence in the mortgage financial markets,” said Ronald J. Verrochio, the Inspector-in-Charge of the New York Division of the United States Postal Inspection Service.

Assistant United States Attorneys Michael D. Lockard and Ryan P. Poscablo, and Assistant Attorney General Meryl Lutsky-who is designated as a Special Assistant U.S. Attorney in this case-are in charge of the prosecution.

 

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Source: ABA Journal

Assad Suleiman, 48, Irvine, California, was convicted and sentenced on Friday to eight years in state prison for operating an unlawful loan modification and money laundering scam that defrauded nearly $2.3 million from 387 homeowners.

Co-defendants Kevin Suleiman, 39, Irvine, California and Rosa A. Barraza, 45, Santa Ana, California were charged on October 3, 2017, with 36 felony counts of money laundering, 12 felony counts of grand theft, 10 felony counts of commercial burglary, and one felony count each of conspiracy to commit grand theft, money laundering, and unlawful loan modification, with sentencing enhancements for aggravated white collar crime over $500,000 and property damage over $1.3 million.

Assad Suleiman was convicted of, and Kevin Suleiman and Rosa Barraza are accused of the following:

Between May 2012 and July 2017, engaging in a sophisticated loan modification scheme and operating as Jefferson Legal Group, Los Angeles, California; Simplify Law Group, Irvine, California; Synergy Law Center, Anaheim, California; Wilshire Debt Advisors, Irvine California:

  • Operating without any lawyers involved, despite the misleading entity names
  • Charging advance fees for loan modifications and, if no loan modification was approved, ceasing communication with the victims after receiving an initial payment
  • If the defendant did get a loan modification approved for the victims, lying to the victims and telling them a trial payment and/or lump sum payment to their lender was required to cover taxes and various fraudulent fees
  • Directing the homeowner to make their trial payment directly to one of the four fraudulent entities for a three to four month period and falsely telling the homeowner that the trial payments would be forwarded to their lender
  • If the victims had any money still available, demanding additional payments to bring their impound accounts current
  • Failing to forward any payments to the mortgage lenders and laundering the money by depositing funds to the defendants’ Chase Bank and Bank of America accounts under their fraudulent businesses names
  • Defrauding a total of 387 victims with a loss of at least $2.28 million.

Suleiman pleaded guilty on July 13, 2018, to the following felony counts, (43) Money laundering, (10) Grand theft, (10) Second degree burglary and conspiracy to commit grand theft, money laundering, and unlawful loan modification.  Suleiman was ordered to pay $1,568,717 in restitution.

Kevin Suleiman is scheduled for a pre-trial hearing on July 27, 2018, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana, California. Barraza is scheduled for a pre-trial hearing on July 30, 2018, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana, California.

Barraza and Assad Suleiman were arrested on October 5, 2017, during a warranted search of their office. The Orange County District Attorney’s Office (OCDA) recovered $500,000 in cash. Kevin Suleiman was arrested by U.S. Marshals in San Diego on January 10, 2018.

It is against California law to charge an advance fee for a loan modification. Homeowners needing foreclosure relief are typically in financial distress and vulnerable to losing their family’s principal asset. In many instances, the conspirators directed the homeowners to stop making their mortgage payments, ostensibly to prove to the lenders that a loan modification was necessary and freeing up funds to pay the conspirators. Directing homeowners to breach their contracts in many instances would precipitate the commencement of foreclosure proceedings that would otherwise be unnecessary.

This fraud scheme was particularly effective and insidious because the lenders were never aware that trial payments and impound fees had been collected by the conspirators, and the homeowners believed the lies the conspirators made to them that their monies would be forwarded to their lenders. Many homeowners never discovered the fraud until their lenders commenced foreclosure against their homes. The conspirators deliberately chose entity names that implied attorneys were involved, and when complaints began to pile up or suspicious raised, the same conspirators would contact victims with new entity names, while the old entity simply disappeared in a financial “hit and run.”

The OCDA, along with the U.S. Federal Housing Finance Agency Office of Inspector General and U.S. Department of Housing and Urban Development Office of Inspector General, investigated this case.

Prosecutor: Deputy District Attorney George McFetridge, Major Fraud Unit

Benjamin Bland, 41,  Richmond, Virginia, was convicted by a federal jury of conspiracy to commit wire fraud, wire fraud, and social security fraud.

According to evidence presented at his five day trial, Bland was the owner and registered agent of a company headquartered in Richmond, Virginia that hosted a website that purported to provide individuals with a legal means to start a new credit file through the issuance of a “secondary credit number.” Bland falsely told his customers that these “secondary credit numbers” were “100% legal” and issued “by lawyers.” However, Bland had invented the term “secondary credit number,” there were no lawyers involved with his business, and the “secondary credit numbers” were actually social security numbers that had been previously issued to other individuals, predominantly children.

According to the trial evidence, one of the primary purposes of the fraud scheme was to obtain bank loans, private loans, auto loans, and lines of credit using the stolen social security numbers, counterfeit social security cards, and personal identity information (“PII”) of actual persons to create a false (improved) credit score.

The trial evidence also established that Bland obtained and sold the misappropriated social security numbers to Michael Westbrook and at least 20 others located throughout the country, whom Bland called his “affiliates.” These “affiliates” in turn sold those numbers to buyers. For an additional fee, Bland would provide fraudulent social security cards bearing the stolen number and the name of the “buyer.” Bland also provided fraudulent driver’s licenses to the “customers.” These items were provided so that “customers” could defraud banks and other lenders by drawing upon lines of credit using the stolen social security numbers.

According to the trial evidence, Bland compromised the social security numbers of at least 1,500 people during the conspiracy. The majority of the stolen social security numbers belonged to children all over the United States.

A co-conspirator, Michael Westbrook, also pled guilty to conspiracy to commit wire fraud and aggravated identity theft. He is awaiting sentencing.

Bland faces a maximum sentence of 20 years in prison on each of the wire fraud counts and a maximum of 10 years in prison on each of the social security fraud counts. Senior U.S. District Judge J. Frederick Motz has scheduled sentencing for July 14, 2017 at 10:00 am.

The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

United States Attorney Rod J. Rosenstein commended HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Lauren Perry and Aaron Zelinsky, who are prosecuting the case.

Nathan E. Hardwick IV, 50, formerly of Atlanta, Georgia, and Asha R. Maurya, 40, Atlanta, Georgia, were indicted on charges of with conspiracy, wire fraud, and related crimes in connection with Hardwick’s alleged theft of over $20 million from the attorney escrow accounts and operating accounts of Morris Hardwick Schneider and LandCastle Title, an Atlanta-based law firm and title agency in which Hardwick and Maurya once served as top executives.  In addition to charges against Maurya for assisting with Hardwick’s theft, the indictment also charges Maurya with stealing approximately $900,000 from the firm’s accounts to pay her own personal expenses. Continue Reading…

Michael Nazarinia, 41, San Diego, California, was sentenced to 9 months in custody for his role in a fraudulent mortgage loan modification business that duped hundreds of struggling homeowners.

The business, known as “Haffar & Associates,” owned by figurehead attorney Mohamed Haffar, recruited new customers using telemarketers who lied to clients in order to induce more than 1,000 people to sign up to pay more than $3.5 million in total.

Nazarinia’s co-conspirator Charles Rose managed a call center staffed with as many as 30 telemarketers, whose job was to recruit new clients.  Rose trained the telemarketers, wrote telemarketing scripts for use on calls with potential clients, wrote form letters for the salespeople to send to potential clients, and recorded his own sales calls for telemarketers to emulate.  Rose pleaded guilty in July, admitting that he and his business partners, including Nazarinia, trained telemarketers to make statements to potential clients that were false, such as the following: Continue Reading…

Mazen Alzoubi, real estate investor, 32, Rancho Cucamonga, California, pled guilty to conspiracy, mail fraud and identity theft, admitting that he orchestrated a scheme to steal title to Southern California homes and then sell the properties to unsuspecting buyers before the true owners could put a stop to the sale.

Alzoubi admitted that from May 2012 through August 2014, he and several co-conspirators fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million. On at least ten occasions, Alzoubi admitted, he was successful—earning illicit proceeds of nearly $2.2 million, which he then laundered and diverted to overseas bank accounts to ensure that the fraudulently-obtained proceeds could never be recovered. Continue Reading…

Fryar, mother seek new trial or reversal

Before former NFL star Irving Fryar and his mother are sentenced next month for their roles in a $1.2 million mortgage scheme, a New Jersey judge will rule on their lawyers’ motions asking for either a verdict reversal or a new trial.

Fryar, a wide receiver who played for the Eagles and other teams during his 17-year NFL career, and his mother, Allene McGhee, 74, formerly of Willingboro, were convicted of conspiracy and theft by deception Aug. 7. Each faces five to 10 years in prison and up to $150,000 in fines on Oct. 2 when state Superior Court Judge Jeanne T. Covert is expected to sentence them.

Fryar, mother decline to take stand

The lawyers defending former Eagles player Irving Fryar and his mother, Allene McGhee, against mortgage fraud charges rested their case in a Mount Holly courtroom Tuesday without calling any witnesses.

Fryar, 52, of Springfield Township, Burlington County, and McGhee, 74, a retired school bus driver from Willingboro, both decided against taking the stand to testify after the prosecution completed its case and the jury trial entered its third week. The two are charged with conspiracy and theft by deception in connection with a $1.2 million mortgage scheme involving six banks and one lending company in South Jersey and Philadelphia between October and December 2009.

Six individuals have been charged with violations of federal law in what the indictment alleges was a scheme to market and sell home loan modification services to distressed homeowners trying to save their homes from foreclosure following the financial crisis of 2008. Investigators believe the alleged scheme involved more than 10,000 victims in nearly every state in the country with losses of more than $33 million.

Continue Reading…