Sentencing in California Mortgage Fraud Scheme

Rachel Dollar —  November 5, 2015 — 1 Comment

Stephen Pirt, 37, Mountain House, California, was sentenced to 2 years and 1 month in prison for his participation in a large-scale mortgage fraud scheme. According to evidence presented at the trial for co-defendant Erik Hermann Green, 33, Roseville, California, Pirt and Green defrauded the New Century Mortgage Company by submitting false documentation about borrowers’ employment, income and assets, including fraudulent loan applications and other altered bank documents. On September 19, 2013, Stephen Pirt pleaded guilty to wire fraud.

United States District Judge Troy L. Nunley told Pirt, “you were an organizer and leader of the scheme, and you need to be punished for that.”   The judge also explained the need for a proper deterrent effect.

Green is scheduled to be sentenced by Judge Nunley on November 19, 2015. Green faces a maximum statutory penalty of 20 years in prison and a $250,000 fine.

The case is the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Alameda County District Attorney’s Office. Assistant United States Attorney Michael D. Anderson and Special Assistant United States Attorney Josh F. Sigal are prosecuting the case.

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Straw Buyer and Down Payment Fraud Guilty Plea

Rachel Dollar —  November 3, 2015 — Leave a comment

Antonio Pimenta, 47, Neshanic Station, New Jersey, admitted his role in a scheme that used straw buyers and phony loan documents to fraudulently obtain a $400,500 loan on a property in Irvington, New Jersey.

According to documents filed and statements made in court: Pimenta owned and managed Kelmar Construction Co. Kelmar built multiple properties in Irvington, New Jersey. These properties were sold to straw buyers utilizing fraudulent mortgage loans brokered by loan officer, Klary Arcentales, 47, Lyndhurst, New Jersey, and closed by settlement agent Linda Cohen, 57, Orange, New Jersey, who used fraudulent settlement statements to hide the true sources and destinations of the mortgage funds. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings. Continue Reading…

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Daughter and Parents Guilty in Foreclosure Rescue Scheme

Rachel Dollar —  November 2, 2015 — Leave a comment

Silver Buckman, 37, Cherry Hill, New Jersey, her parents, Vincent Foxworth, 70, Turnersville, New Jersey and Cynthia Foxworth, 64, Turnersville, New Jersey, were convicted by a federal jury for a mortgage fraud scheme that stripped the equity from the homes of desperate homeowners facing foreclosure.  The three were found guilty of bank fraud, wire fraud, and conspiracy to commit bank fraud and wire fraud. Their scheme caused losses to mortgage lenders of approximately $3.8 million.

The defendants offered to help financially-vulnerable individuals save their homes from foreclosure or obtain money from the equity in their homes but, instead, defrauded the homeowners and mortgage lenders. Buckman owned and operated Fresh Start Financial Services (“FSFS”), in Mount Laurel, New Jersey and was an employee of American Home Lending as well as a mortgage broker for American One Mortgage (“AOM”). Her father is an experienced Realtor.

Between October 2006 and November 2009, Buckman and her co-defendants allegedly targeted financially vulnerable homeowners and represented to them that they could improve their credit, save their homes from foreclosure, or provide them with money through Buckman’s lease buyback program. The homeowners were told that “investors” would be used to temporarily refinance their homes and that they could repurchase the homes in one year, or once they regained their financial footing. The defendants also allegedly induced the homeowners into signing documents related to the sale and lease of their homes by their representations that the homeowners would remain on the title to their homes, that the equity from their homes would be placed into an individual escrow account in their names, and that new mortgages would be paid from the escrow accounts to establish their timely payment histories.

In order to carry out the scheme, Buckman recruited Vincent Foxworth and Cynthia Foxworth and others to be straw borrowers. Buckman submitted false financial and employment information about the straw borrowers to mortgage lenders. Once lenders agreed to fund the mortgage loans, Buckman prevented the homeowners from receiving the settlement proceeds and did not put money into escrow accounts for the homeowners. Instead, the defendants distributed the proceeds amongst themselves. Buckman used only a fraction of the homeowners’ monies toward the payment of the mortgages obtained by the straw borrowers for the homeowners’ homes and thereby caused the loans to go into default.

U.S. District Court Judge R. Barclay Surrick scheduled a sentencing hearing for January 29, 2016.The defendants each face a potential advisory sentencing guideline range of approximately 87 to 108 months in prison plus restitution.

The case was investigated by the Federal Bureau of Investigation, the United States Postal Inspection Service and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorney Anita Eve.

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Mortgage Mod Case Results in 10+ Year Sentences

Rachel Dollar —  October 29, 2015 — 4 Comments

Kristen Michelle Ayala, aka Amber Lynch, aka Olivia Benet, aka Grace Williams, 30, formerly of Las Vegas, Nevada, and Joshua Manuel Sanchez, aka Nelson Cruz, aka Chris Ward, aka Daniel Mora, 34, formerly of Las Vegas, Nevada, were sentenced for conspiracy to commit wire fraud for their role in a $3.8 million dollar mortgage modification scam.

Ayala was sentenced to 135 months in prison, while Sanchez was sentenced to 151 months in prison. Both defendants were also sentenced to three years of supervised release and ordered to pay full restitution to the victims of their crime. Continue Reading…

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Mortgage Fraud Fugitive Arrested

Allison Tussey —  October 29, 2015 — 1 Comment

Anthony Cruz Quitugua, 38, Phoenix, Arizona, was arrested on May 23, 2012, to face charges of mortgage fraud. In May of 2011, a federal grand jury in Phoenix returned a 15-count indictment against Quitugua, which alleges that he defrauded mortgage lenders out of more than $3.5 million dollars.

Continue Reading...
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More Georgia Bid Rigging Pleas(e)

Rachel Dollar —  October 28, 2015 — Leave a comment

Trent Gaines, a Georgia real estate investor, pleaded guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia.  Gaines admitted that he and others conspired not to bid against one another at public real estate foreclosure auctions from October 2008 to November 2010 in Fulton County, Georgia, and from September 2006 to February 2011 in DeKalb County, Georgia. Gaines also admitted to conspiring with others to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that should have gone to mortgage holders and others. The selected properties were then awarded to the conspirators who submitted the highest bids in private side auctions open only to Gaines and his co-conspirators. Continue Reading…

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Rent Skimming Sentence

Rachel Dollar —  October 27, 2015 — Leave a comment

Hubert Rotteveel, 52, Dixon, California was sentenced  to three years and four months in prison for one count of mail fraud, .

In September 2014, Rotteveel was found guilty by a federal jury of one count of mail fraud relating to 13 properties in Dixon. According to evidence produced at trial, Rotteveel acted as a real estate salesperson for the 13 properties, with over $7 million in loans authorized for just two buyers in seven months. He inflated the values of the properties and worked with loan officers to provide false information to lenders about the income and liabilities of the buyers to induce the lenders to fund loans for the properties. Rotteveel surreptitiously made the down payments on the homes, instead of the buyers, and got that money (and usually more) back from the lenders at closing. For most of the transactions, when the sales closed, the escrow officer distributed funds to a bank account in the name of Windmill Properties, a company owned by Rotteveel, without disclosing these payments to the lenders. All 13 properties were used as rentals, with Rotteveel collecting the rents through Windmill Properties. He netted over $300,000 through the sales in just seven months, and the lenders lost more than $3 million when all 13 properties underwent foreclosure.

United States Attorney Benjamin B. Wagner stated: “Hubert Rotteveel used his knowledge of the real estate market in Dixon to defraud lenders of over $7 million, resulting in losses of over $3 million after each of the homes went into default and a foreclosure sale was held. Today’s sentence is one step in the continuing effort to hold real estate professionals responsible for their role in the mortgage meltdown.”

“This prosecution should serve as a warning to those who abuse their position of trust,” said Thomas McMahon, Acting Special Agent in Charge, IRS-Criminal Investigation. “Mr. Rotteveel manipulated the MLS listings for properties, failed to disclose his true role in the transactions and made numerous misrepresentations to lenders.  Although this sentence cannot reverse the damage caused by Mr. Rotteveel, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”

Rotteveel was sentenced by Senior United States District William B. Shubb.   The case was the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Justin L. Lee prosecuted the case.

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Former Jersey City political candidate Alston, 2 others charged in mortgage scheme

Former state Senate and Assembly candidate Bruce Alston was arrested early Friday morning for his role in a sophisticated mortgage fraud scheme, the Hudson County Prosecutor’s Office announced this morning.

Alston, 44, of Jersey City was arrested along with his sister, Gail Alston, 50, and Maisha Taylor, 42, of Newark, who Alston described on his blog as his former girlfriend.

Bruce and Gail Alston and Taylor have been charged with making/possessing materials to make false government documents, false/tampering with record, theft-illegal retention, tampering with public records, false representation, theft by deception, impersonation and conspiracy to commit those crimes.

 Posted by Rachel Dollar  onOctober 26, 2015 In Mortgage Fraud on the web
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Guilty Plea for Las Vegas Fake Liens

Rachel Dollar —  October 26, 2015 — 2 Comments

Rodney Taylor, 51, Las Vegas, Nevada, pleaded guilty to two counts of false representation concerning title. Taylor participated in a scheme to claim liens on real estate in Las Vegas, Nevada by filing false documents. The fraudulent acts were committed between March and September 2012.

In addition to claiming non-existent liens on property, Taylor was also accused of filing false claims of ownership for real estate with the county recorder’s office. After filing these claims, Taylor applied for and received public funds from the Southern Nevada Housing Authority in exchange for renting to Section 8 tenants. The state is seeking restitution of over $45,000 for victimized individuals and state agencies.

“Fraudulent real estate claims have a devastating impact on Nevada families and their homes,” said Nevada Attorney General Adam Paul Laxalt. “Prosecutors in my office will continue to ensure that those who attempt to defraud the public receive justice.”

False representation concerning title is punishable by up to five years of imprisonment and a fine of no more than $10,000. The sentencing hearing for Taylor is scheduled for February 11, 2016, in the Eighth Judicial District Court.

The investigation of this case was a collaborative effort between the Attorney General’s Fraud Unit, the City of North Las Vegas and the Department of Housing and Urban Development. Deputy Attorney General Daniel Westmeyer prosecuted this case.

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Sentences in California Inflated Value Scheme

Rachel Dollar —  October 26, 2015 — 1 Comment

Olga Palamarchuk, 45, Rancho Cordova, California was sentenced to five years and 10 months in prison; Pyotr Bondaruk, 44, Sacramento, California, was sentenced to five years and 11 months in prison; Vera Zhiry, 35, Sacramento, California, was sentenced to three years and one month in prison; and Peter Kuzmenko, 37, West Sacramento, California, was sentenced to five years and 11 months in prison, two years of which is to be served consecutively to the 19-year sentence he received for another mortgage fraud scheme.

In July 2015, after a three-week trial, a federal jury found the four defendants guilty of conspiracy to commit mail fraud related to a mortgage fraud conspiracy. Palamarchuk and Bondaruk were also found guilty of making false statements to a financial institution and money laundering. Zhiry was also found guilty of money laundering.

According to evidence presented at trial, Palamarchuk, a loan officer at Capital Mortgage Lending Inc., recruited Bondaruk to purchase two houses using 100 percent financing and to refinance and obtain a home equity line of credit on one of the houses. In order to qualify for the loans, Palamarchuk and Bondaruk submitted fraudulent loan applications to lenders, falsely stating Bondaruk’s employment, income, assets, and intent to occupy the homes as his primary residence.

In addition, the defendants fraudulently inflated the value of the properties and diverted the excess funds to themselves. For example, Peter Kuzmenko received $32,378 in seller’s proceeds for landscaping and pool work his company Pete’s Pool Service purportedly performed on a house without a pool. Similarly, Zhiry received $100,000 to pay off a purported debt owed by the sellers that the sellers denied existed, and Zhiry provided $40,000 of that money back to Olga Palamarchuk.

“The mortgage crisis damaged the national economy and the Sacramento region was especially hard hit. Without individuals like these defendants, who lied on loan applications, lied to lenders and continued to lie to federal agents, this could not have happened,” United States Attorney Benjamin B. Wagner stated. “We will do what is necessary to ensure that those who took advantage of a system based largely on trust and honesty are held accountable.”

“This case can be summarized in one word: greed. The defendants wanted to make a quick buck and they did that by committing fraud,” said Supervisory Special Agent Dan Bryant of the FBI’s Sacramento field office. “The sentences imposed by Judge Nunley send a clear message to others in our community thinking about breaking the law for financial gain; it’s not worth it.”

“Today’s sentencing closes the chapter on this conspiracy of fraud,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “The damage caused by these defendants cannot be overstated. Fraud in the mortgage industry has played a major role in almost crippling this nation’s economy. IRS-CI will continue to investigate individuals who engage in deceptive and fraudulent behavior, fueled by greed.”

This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Lee S. Bickley and Heiko P. Coppola are prosecuting the case.

These sentences bring to 11 the number of defendants sentenced this week for mortgage fraud offenses. On Monday, Bakersfield residents Lucia Yolanda Chavez, 37, was sentenced to four years in prison, and Joseph Chavez, 41, was sentenced to three years in and were ordered to pay $1.8 million and $1.44 million in restitution respectively. On Tuesday in Sacramento, Hubert Rotteveel, 52, of Dixon, was sentenced to three years and four months in prison; Peter Kuzmenko, 37, of West Sacramento, was sentenced to 19 years in prison; Aaron New, 41, of Sacramento, was sentenced to 11 years and three months in prison; Nadia Kuzmenko, 36, formerly of Loomis, was sentenced to eight years in prison; and Edward Shevtsov, 51, of North Highlands, was sentenced to eight years in prison.

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