Thomas Scott Brown, 47, Atlanta, Georgia, was sentenced to three years in prison, followed by five years of supervised release, for his role in a bank fraud scheme that resulted in losses of approximately $2.7 million. Brown pled guilty to bank fraud and false statements to a financial institution on June 9, 2017. According to court documents, from approximately 2006 through 2007, Brown purchased properties for buyers with his own money and then directed those individuals to apply for home equity loans with Navy Federal Credit Union, claiming that they owned the properties free and clear of any liens when, in fact, they still owed Brown for the properties. In applying for these home equity loans, Brown instructed the buyers to submit false documentation to the bank, including fraudulent Housing and Urban Development Settlement Statements and false membership applications. Brown further ordered these individuals to pay him from the proceeds of the home equity loans.

In most instances, the homes went into foreclosure after the bank approved the loans. In total, 51 properties Brown sold eventually went into foreclosure, causing Navy Federal Credit Union losses of $2.7 million.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Claude M. Hilton. Assistant U.S. Attorney Jamar K. Walker prosecuted the case.

Francisco Javier Gonzalez, a/k/a “Javier Gonzalez,” 45, Duncanville, Texas, vice-president of Dallas County Community Action Committee, Inc., pleaded guilty to one count of mail fraud

According to documents filed in the case, the DCCAC was a non-profit entity, accredited by HUD between October 1990 and mid- February 2016, to provide housing counseling. It was created in 1965 by the Dallas Commissioners Court to support the efforts of the Johnson administration to combat poverty. Gonzalez served as DCCAC’s Vice President and one of the directors. Gonzalez also leased space in the DCCAC offices for another entity, known as Residential Counseling FJ LLC.

According to the charging documents filed in the case, between 2009 through 2016 Gonzalez through his work at DCCAC, defrauded homeowners under the guise that he was assisting them with mortgage assistance. Gonzalez specifically sought out victims who were facing financial difficulty and who had contacted the DCCAC seeking mortgage loan and foreclosure prevention assistance. He also identified victims facing such financial distress by subscribing to the Foreclosure Listing Service, a/k/a Roddy List, which offers listings of foreclosure and pre-foreclosure homes, by county, through a review of public records. Once identified, Gonzalez would meet with these victims in the DCCAC offices and in the victims’ homes. He would explain a plan to reduce the victim’s mortgage payment and to prevent foreclosure; the plan often included a loan modification application. These applications often contained information that had been falsified by Gonzalez and were otherwise incomplete.

According to plea documents, on February 28, 2013, Gonzalez prepared and submitted a false and fraudulent Real Estate Settlement Procedures Act (RESPA) application to a bank in an effort to delay foreclosure and extract additional funds from victims. As a result of Gonzalez’s scheme to defraud homeowners, the Department of Housing and Urban Development and certain banks suffered a loss of $611,740.55.

Gonzalez faces a maximum statutory penalty of 20 years and a $250,000 fine. Restitution could also be ordered. He has been in custody since the time of his arrest in October 2016.

U.S. Attorney John Parker of the Northern District of Texas announced the plea. HUD Office of Inspector General, FHFA Office of Inspector General, and the USPIS investigated the case. Assistant U.S. Attorney P.J. Meitl is in charge of the prosecution.

The United States filed a civil complaint in federal court in Brooklyn, New York, against Paul Mangione, former Deutsche Bank head of subprime trading. In its complaint, the United States alleges that Mangione engaged in a fraudulent scheme to misrepresent the characteristics of loans backing two residential mortgage-backed securities (RMBS) that Deutsche Bank sold to investors that resulted in hundreds of millions of dollars in losses. The suit was brought pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and seeks an appropriate civil penalty.

As alleged in the complaint, Mangione engaged in a fraudulent scheme to sell ACE 2007-HE4 (HE4) — a $ 1 billion security — and ACE 2007-HE5 (HE5) — a $400 million security — by misleading investors about the quality of the loans backing the securitizations. The complaint further alleges that Mangione also misled investors about the origination practices of Deutsche Bank’s wholly-owned subsidiary, DB Home Lending LLC (DB Home) (f/k/a Chapel Funding LLC), which was the primary originator of loans included in the deals. Mangione approved offering documents for HE4 and HE5 even though he knew they misrepresented key characteristics of the loans, including compliance with lending guidelines, borrowers’ ability to pay, borrowers’ fraud and appraisal accuracy.

The HE4 and HE5 offering documents also falsely represented that DB Home had “developed internal underwriting guidelines that it believe[d] generated quality loans” and that DB Home had instituted a quality control process that “monitor[ed] loan production with the overall goal of improving the quality of loan production,” among numerous other representations designed to instill in investors trust in DB Home’s underwriting processes. As alleged in the complaint, Mangione knew that these statements were false.

The defendant fraudulently induced investors, including pension plans, religious organizations, financial institutions and government-sponsored entities, to name only a few, to invest nearly a billion and a half dollars in HE4 and HE5 RMBS, and caused them to suffer extraordinary losses as a result,” stated Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York. “We will hold accountable those who seek to deceive the investing public through fraud and misrepresentation.”

“The government’s complaint alleges that Mr. Mangione knew that certain of Deutsche Bank’s RMBS contained unsound mortgages that did not meet the credit or appraisal standards that the bank represented,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “By allegedly misleading investors about the riskiness of these securities, Mr. Mangione prioritized his and his employer’s bottom line over principles of honesty and fair dealing. The Department of Justice will continue to pursue those who engage in fraud as a way to conduct business.”

As alleged in today’s filing, this individual knowingly took steps during the lead up to the financial crisis to sell defective mortgage loans while hiding the poor quality of the loans from investors,” said Deputy Inspector General for Investigations Rene Febles for the Federal Housing Finance Agency Office of the Inspector General. “This conduct was deliberately fraudulent and resulted in significant losses for the investors. We are committed to working with the U.S. Department of Justice and the U.S. Attorney’s Office for the Eastern District of New York to hold accountable those who engaged in fraud in the secondary market for mortgages.”

In January 2017, the Department of Justice settled a related RMBS matter with Deutsche Bank.

The United States’ case is being handled by Assistant U.S. Attorneys Edward K. Newman and Ryan M. Wilson. Acting U.S. Attorney Bridget M. Rohde and Acting Assistant Attorney General Readler thanked the Office of the Inspector General for the Federal Housing Finance Administration for its assistance in conducting the investigation in this matter.

Zaki M. Bey, 39, Philadelphia, Pennsylvania, was sentenced to 60 months in prison. Bey previously pleaded guilty to one count of conspiracy to commit loan and bank fraud, one count of conspiracy to defraud the Internal Revenue Service, and one count of conspiracy to commit wire fraud.

According to court documents, Bey conspired with others to prepare and submit fraudulent mortgage applications to banks and lending institutions.  In 2007 and 2008, Bey successfully secured more than $2 million in residential loans on at least thirteen properties located in the Germantown section of Philadelphia and in New Jersey.  Bey and others created fraudulent loan applications on behalf of straw buyers that contained materially false information as to the straw buyers’ income, assets, and intent to occupy the residences.  Bey also furnished fraudulent records such as payroll account documents, paystubs, and financial statements to defraud financial institutions and lenders.  Bey’s company at the time, Natural Home Builders, was able to receive a payout for purported construction expenses ranging from $17,864.26 to $60,000 at the closing of each settlement.  Bey was not completing any construction on these properties, and obtained total settlement proceeds for construction costs of $435,074.26.

In late 2010 and early 2011, Bey filed fraudulent personal income tax returns for tax years 2007, 2008, 2009 and 2010.  Bey filed these tax returns claiming false tax withholding payments and false Forms 1099-OID (“Original Issue Discount”) income for his company, Natural Home Builders.  Bey attempted to receive total tax refunds from the IRS in the amount of $1,141,677.  Bey was only successful in receiving $148,296 from the IRS based on the fraudulent 2009 tax return he submitted.   After assessed a tax deficiency by the IRS, Bey mailed checks to the IRS from a closed bank account in an attempt to repay the fraudulent tax refund.

Beginning in 2010 to 2013, Bey engaged in a wire fraud conspiracy involving the submission of fraudulent auto loan applications.  Bey furnished fraudulent records such as payroll account documents, paystubs and financial statements to defraud automobile dealerships located in Philadelphia and New Jersey.  The false loan applications and fraudulent records caused the automobile dealerships to electronically submit false information to financial institutions and lenders.  Through the use of straw buyers, Bey was able to obtain at least 7 automobiles.

In addition to Bey’s 60 month prison sentence, he will also be required to serve 3 years’ supervised release and pay back $705,528.22 in restitution to multiple financial institutions and the Internal Revenue Service.

The sentence was announced by Acting United States Attorney for the Eastern District of Pennsylvania Louis D. Lappen.  The case was investigated by the Internal Revenue Service, Criminal Investigation.  It was prosecuted by Assistant United States Attorney James Pavlock.

Daphne Iatridis, 59, and her husband, Arthur Telles, 59, were each sentenced to 30 months in prison and ordered to forfeit 26 fraudulently purchased properties to the United States. Both had previously pleaded guilty to conspiracy to commit mail and wire fraud and tax evasion. The couple’s sons, Brendyn Iatridis and Spenser Iatridis, also pleaded guilty to related crimes and were sentenced to 10 months in prison and probation, respectively.

Between 2008 and 2012, the defendants engaged in an elaborate scheme to obtain more than 30 houses from the Federal National Mortgage Association (“FNMA”). Among other things, they stole others’ identities, used bogus trusts to buy the properties, and fraudulently notarized documents to facilitate the improper purchases. In addition, from at least 2010 through 2015, the defendants failed to pay taxes on their rental income from the fraudulently purchased properties.

Real estate professionals who lie and forge documents are a scourge to the industry,” stated Acting U.S. Attorney Elizabeth A. Strange. “Our office places a high priority on investigating and prosecuting real estate fraud, and we hope that the lengthy sentences imposed in this case will send a strong message that this type of dishonesty and misconduct will be punished severely.”

This case epitomized the greed that erodes confidence in the Realtor/Mortgage industry,” said Michael DeLeon, Special Agent in Charge of the FBI Phoenix Division. “I am pleased the defendants are now being held accountable for their crimes and that the majority of the fraudulently obtained properties will be forfeited.”

Senior U.S. District Judge Neil V. Wake handed down the sentences.  The investigation was conducted by the Federal Housing Finance Agency’s Office of Inspector General, the Internal Revenue Service-Criminal Investigation, and the Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp and M. Bridget Minder, Assistant U.S. Attorneys, District of Arizona, Phoenix.

Hooshang Noori, a loan broker who operated Finance for Americans, Corp, doing business as Pacific Realty, Lake Forest, California, was indicted on one count of wire fraud in the Central District of California.

According to the indictment, Noori submitted loan applications to Lone Oak Fund LLC, on behalf of his purported client M.G. and M.G.’s company, Noble Investments, LLC, to borrow $4 million for the purpose of buying commercial property in Los Angeles, California to be secured by a first deed of trust on a residence owned by M.G.  Noori, or a co-scheme, purporting to be M.G., directed the escrow company to distribute the loan funds to Noori’s company.  After escrow company representatives informed Noori that the funds could only be distributed to Noble Investments, Noori registered  “Noble Investments LLC” in Delaware and opened an account in the company’s name which he solely controlled.  Escrow was then directed to distribute loan funds to this account.

The funds were used to purchase a Mercedes Benz, pay off the lien on Noori’s residence, pay business expenses, among other things, and $3.6 million of the funds were transferred to a Emirates NBD bank account in the name of Four Directions Electronics, LLC.


Ralph Christopher Cirino was indicted in the Eastern District of Pennsylvania on six counts of mail fraud, four counts of misrepresentation of a social security number, four counts of wire fraud, two counts of making false statements in mortgage loan applications and one count of unlawful possession of authentication feature.

According to the indictment, Cirino falsely reported to the Pennsylvania Department of Labor that two corporations, Fast Care Home Care P.C. and Juris Clarity were legitimate corporations with multiple employees earning wages in 2015 and 2016.  In fact, these companies did not conduct any business, have employees or pay wages and the employees were fictitious.  Cirino sought to obtain unemployment benefits by purporting to be several of the fictitious employees and by submitted unemployment claims on behalf of those fictitious employees and on his own behalf. On of the fictitious employee names identified in the indictment is Benjamin Hunt.

The indictment alleges that Cirino made false statements to American Internet Mortgage, Inc. and Fairway Independent Mortgage Corporation for the purpose of influencing the actions of the mortgage companies on loans.  He caused loan applications containing knowing false statements to be submitted including an application in December 2016 to AIM falsely stating the applicant’s name was Benjamin Hunt, he was employed by Fast Care and earned a weekly salary of $1,960 and an application in March 2017 to Fairway falsely stating the applicant’s name was Benjamin Hunt, he was employed by Fastcare and earned a monthly salary of $9,880.

The indictment also seeks forfeiture of $87,259.

Urmila Sri Thakur, also known as Urmila Buddhu-Thakur and Indro Buddhu-Thakur, 72, Wethersfield, Connecticut, pleaded guilty in New Haven federal court to a money laundering offense stemming from a fraudulent debt elimination scheme.

According to court documents and statements made in court, from 2009 to June 2012, Thakur, her former husband, Deowraj “Deo” Buddhu and their daughter, Sunita Buddhu, sold a debt elimination “program” to vulnerable individuals through various businesses, including Paradise Consulting Service, Hema, Inc., and Secured Redemption. In exchange for substantial fees, Deo Buddhu told victims about a little-known government fund that could be used to pay off their mortgages and other debts. In fact, no such fund exists. Buddhu instructed his victims to stop making payments on their mortgages, credit cards and other debts, and to stop paying their property taxes. He also provided his victims with fictitious promissory notes, which he called “bonds,” as well as other frivolous documentation, and advised his victims to use them to pay their debts.

On June 12, 2012, the day after Deo Buddhu’s arrest, Thakur withdrew $75,000 from a certificate of deposit account that contained funds from the scheme. She also obtained several cashier’s checks, including one for $50,000 made payable to Thakur, which she thereafter negotiated using accounts in the name of SDK SYS Solutions and TRK Consulting Services.

Thakur pleaded guilty to one count of money laundering, which carries a maximum term of imprisonment of 10 years. She is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson in Hartford on November 20, 2017.

As part of her plea, Thakur has agreed to pay restitution in the amount of $335,072, which is the amount attributable to the underlying fraudulent debt elimination scheme.

Thakur is released on a $250,000 bond pending sentencing.

Deo Buddhu and Sunita Buddhu were previously convicted in Hartford federal court.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced the plea. The matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and the U.S. Department of Housing and Urban Development – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Liam Brennan.

Eugene Peter Kenworthy, Jr., 50, appraiser, Ambler, Pennsylvania, was charged by Indictment with wire fraud, false statements for the purpose of influencing the Federal Housing Administration, aggravated identity theft, and failure to file a tax return.

The indictment alleges that, beginning as early as 1993, Kenworthy worked at Tech Review LTD, a real estate appraisal company owned by Kenworthy’s father.  Kenworthy began managing Tech Review after his father’s death in 2003 and sold the company in 2012 after which he formed two other companies, Global Appraisal Management and East Coast Appraisal Management.

According to the indictment, from March 2010 to February 2016, Kenworthy appraised approximately 714 properties which were the subject of HECM loan applications.  Kenworthy used the electronic signatures of five certified appraisers without their knowledge and consent to certify approximately 294 of those appraisals reports.  Those appraisers did not appraise the properties or write the reports.  Kenworthy used his own signature to certify the other approximately 420 appraisal reports he wrote. Most of the appraisals were for a single mortgage broker/origination company which paid Kenworthy about $450 per appraisal.

Also according to the indictment, Kenworthy made false statements in some of the HECM appraisal reports which resulted in falsely inflated valuations for the properties and, fraudulently inflated the HECM loan amounts. The indictment details several of these transactions.

As of July 2017, of the 714 properties for which Kenworthy wrote an appraisal report for a HECM, FHA had paid 53 claims totaling almost $3.7 million on foreclosed properties where the sales price of the home was insufficient to cover the HECM loan.

Kenworthy was added to the FHA appraiser roster in 1999 and, in or about January 2016, HUD suspended Kenworthy, barring him from performing FHA appraisals.

If convicted the defendant faces a maximum possible sentence is 166 years’ imprisonment, five years of supervised release, a $5,050,000 fine, and a $1,000 special assessment

The indictment was announced Acting United States Attorney Louis Lappen. The case was investigated by the United States Department of Housing and Urban Development – Office of Inspector General and the Internal Revenue Service – Criminal Investigation, and is being prosecuted by Assistant United States Attorney Karen L. Grigsby.

Thomas L. Boyd, 44, real estate investor, Memphis, Tennessee, was sentenced to 30 months in federal prison for his role in a scheme to fraudulently obtain mortgage loans. An indictment returned last September by a federal grand jury alleged that Boyd, the owner of Wonderful Properties, LLC, made false statements and presented false documents to Regions Bank, First Tennesse Bank, Bank of America and Oak Tree Funding on behalf of persons who were financing the purchase of properties from Boyd and Wonderful Properties.

Boyd pled guilty in May to a charge of bank fraud and admitted at his plea hearing to making false statements to Regions Bank in connection with a mortgage loan being made to an individual who was financing the purchase of a property from Boyd.

In imposing the sentence, U.S. District Judge Sheryl H. Lipman also ordered Boyd to pay total restitution in the amount of $383,375.43 and to serve a 3-year term of supervised release following his release from prison.

Lawrence J. Laurenzi, Acting U.S. Attorney, announced the sentence. The case was investigated by the FBI; Federal Housing Finance Agency (FHFA) – OIG; Department of Housing and Urban Development (HUD); Postal Inspection Service and IRS. Assistant U.S. Attorneys Carroll L. Andre III and Lorraine Craig prosecuted this case on the government’s behalf