Man Indicted for Stealing $925,000 Through Deed Fraud

Stephanie Abbott —  October 13, 2023 — Leave a comment

Salome Vega, 46, of Hempstead, New York., was arraigned today on an indictment in which he is charged with grand larceny for allegedly fraudulently transferring the titles of a property in Brooklyn and a property in the Bronx, New York (where Lindbergh baby kidnapper Bruno Richard Hauptmann once resided) and selling them for a total of approximately $925,000. It is alleged the defendant went to elaborate lengths to perpetrate the two separate frauds, including using a variety of fraudulent documents and, in one case, had someone else impersonate a deceased Bronx homeowner at a closing. The defendant also allegedly attempted to steal nearly $300,000 in COVID-19 tax relief payments.

According to the investigation, on August 6, 2019, the defendant allegedly sold the title to 1279 East 222nd Street, a two-family house in the Bronx, New York. At the closing, which was held at an office in Midwood, Brooklyn, the defendant had someone impersonate the property’s deceased owner when the defendant fraudulently sold the house to a buyer for $250,000. Bruno Richard Hauptmann, who was convicted of kidnapping Charles Lindbergh Jr., once resided in that East 222nd Street house.

Furthermore, according to the investigation, six days later, on August 12, 2019, the defendant opened a business checking account for an entity with the same name as the decedent. On the same day, he allegedly deposited a $242,828 check from the sale of 1279 East 222nd Street into the account. Over the next two months, the defendant allegedly emptied the account.

The title transfer was subsequently vacated by the Bronx County Public Administrator when it was discovered that the property owner of 1279 East 222nd Street died on April 26, 2019, approximately four months before the closing.

Furthermore, according to the investigation, in February 2023, the defendant fraudulently sold 431-435 Autumn Avenue, which includes a two-family house attached to a vacant lot in East New York, Brooklyn, for $675,000. It is alleged the defendant did this by pretending to be the CEO of Merit Homes Inc., which owned the property. The defendant was not associated with Merit Homes Inc., nor was he authorized to sell the property. According to the investigation, the defendant, at the closing, requested that funds from the sale be made payable to him personally in amounts of $100,000, $200,000, $300,000, and $33,772 (the remainder of the funds went to closing costs). The defendant proceeded to cash the payments at various check cashing stores in Queens and Long Island.

It is also alleged that the defendant opened a fraudulent business account for a surveillance company on February 9, 2023. The following day, on February 10, 2023, the defendant, according to the investigation, caused a COVID-19 tax relief check from the IRS for $297,368.51 intended for the company to be deposited into this account at a TD Bank branch in Bay Ridge, Brooklyn. An alert bank employee spotted the fraud and froze the account before any funds could be withdrawn.

The defendant was arraigned today before Brooklyn Supreme Court Justice Danny Chun on an indictment in which he was charged with two counts of second-degree grand larceny, second-degree criminal impersonation, and second-degree attempted grand-larceny. The defendant was ordered to return to court on December 6, 2023.

Brooklyn District Attorney Eric Gonzalez made the anoouncement.

District Attorney Gonzalez said, “This defendant allegedly filled his pockets with the ill-gotten gains of two separate real estate transactions in which he stole – then sold – the titles to two New York City properties while also attempting to steal hundreds of thousands of dollars in COVID-19 tax relief funds. We will now seek to hold the defendant accountable and will continue to vigorously investigate and prosecute deed fraud.”

The District Attorney thanked the KCDA Detective Investigators for their assistance on this case.

The case is being prosecuted by Senior Assistant District Attorney Sergey Marts, of the District Attorney’s Frauds Bureau, and Assistant District Attorney Frank Longobardi, Chief of the District Attorney’s Construction Crimes and Labor Fraud Unit, under the supervision of Assistant District Attorney Richard Farrell, Chief of the District Attorney’s Real Estate Fraud Unit and Assistant District Attorney Gregory Pavlides, Chief of the Frauds Bureau, and the overall supervision of Assistant District Attorney Michel Spanakos, Deputy Chief of the Investigations Division and Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.

 

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Man Pleads Guilty to Defrauding D.C. Mortgage Assistance& Foreclosure Prevention Program

Stephanie Abbott —  September 18, 2023 — Leave a comment

Maron Moss, Jr., 49, Miami, Florida, pleaded guilty today in Superior Court to one count of first-degree fraud for a scheme in which he stole more than $31,920 from the District of Columbia’s HomeSaver program, a foreclosure prevention program administered by the D.C. Housing Finance Agency and funded by the U.S. Department of Treasury.

            According to the government’s evidence, Moss, a former DC resident, applied for mortgage assistance for his Washington, D.C. home in 2018, and then submitted recertifications for continued program eligibility on six separate occasions between 2018 and 2019.  Moss represented that he was suffering from financial hardship, was unemployed, and that his only source of income was unemployment benefits. Based on these representations, the D.C. Housing Finance Agency made more than $31,920 in monthly mortgage payments directly to Moss’s mortgage service companies. But Moss was, in fact, employed when he applied for the program, as well as during the entire period that he recertified his program eligibility, earning approximately $239,743 in income from at least five different employers during the relevant 20-month period.

            The Honorable Heidi Pasichow accepted Moss’s guilty plea and scheduled sentencing for December 5, 2023. As part of the plea agreement, Moss agreed to pay full restitution.

U.S. Attorney Matthew M. Graves, Principal Deputy Inspector General Melissa Bruce, of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Inspector General for the District of Columbia Daniel W. Lucas made the announcement.

            In announcing the guilty plea, U.S. Attorney Graves, Principal Deputy Inspector General Bruce, and Inspector General Lucas commended the work of those who investigated the case from SIGTARP and the Office of Inspector General.  They also acknowledged the efforts of Assistant U.S. Attorneys Benjamin D. Bleiberg and Brian P. Kelly who investigated and prosecuted the case.

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Man Pleads Guilty To Conspiracy To Mortgage Fraud

Stephanie Abbott —  September 14, 2023 — Leave a comment

Carlos Ferrer, 46, Tampa, Florida, has pleaded guilty to one count of conspiracy to commit bank fraud.

According to the plea agreement, Ferrer, co-conspirator Maria Del Carmen Montes, and others conspired to create and executed a mortgage fraud scheme targeting financial institutions. To ensure that otherwise unqualified borrowers were approved for mortgage loans, the conspirators created fictitious and fraudulent paystubs and IRS Form W-2s in the names of companies for which the borrowers had never worked. The bogus income documents falsely indicated that borrowers had worked at these companies, including companies formed and controlled by Ferrer, for a certain period and earned income that they had not. These fictitious paystubs and W-2s were submitted to the financial institutions who relied on them when making underwriting decisions.

To further deceive the mortgage lenders, Ferrer filled in the false employment and employment and income on Verifications of Employment (VOE) sent by the financial institutions. Ferrer then falsely certified and emailed VOEs sent by the financial institution in the names of borrowers that he knew did not work for his companies and lied to the financial institutions during verbal VOE verifications. Based on Ferrer’s misrepresentations, the financial institutions approved and funded the mortgage loans.

Ferrer faces a maximum penalty of 30 years in federal prison. A sentencing date has not been set.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, the U.S. Department of Housing and Urban Development – Office of Inspector General, and the Federal Bureau of Investigation. It is being prosecuted by Special Assistant United States Attorney Chris Poor.

 

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Man Admits Conspiring to Commit Mortgage Fraud

Stephanie Abbott —  September 6, 2023 — Leave a comment

Cabral Simpson, 46, Orange, New Jersey, pleaded guilty by before U.S. District Judge Kevin McNulty to Count One of an indictment charging him with conspiring to commit wire fraud.

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

Simpson, a real estate investor, and his conspirators engaged in mortgage fraud by creating fake bank statements and fake employee verification records for buyers of properties and transferring money into the buyers’ bank accounts for payment of the deposit for a property. Simpson and his conspirators submitted fraudulent mortgage loan applications, supporting documents, and closing documents on behalf of the buyers. They also induced lenders to issue more than $1 million in loans, resulting in defaults and exposing the lenders and the U.S. Department of Housing and Urban Development to more than $1 million in losses.

The charge of conspiracy to commit wire fraud to which Simpson pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits to Simpson or twice the gross loss suffered by the victims. Sentencing is scheduled for Jan. 10, 2024,

U.S. Attorney Sellinger credited special agents of the U.S. Department of Housing and Urban Development – Office of the Inspector General, under the direction of Special Agent in Charge Christina D. Scaringi in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.

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UBS Agrees to Pay $1.435 Billion for Fraud in the Sale of Residential Mortgage-Backed Securities

Stephanie Abbott —  August 14, 2023 — Leave a comment

UBS AG and several of its U.S.-based affiliates (together, UBS) have agreed to pay $1.435 billion in penalties to settle a civil action filed in November 2018 alleging misconduct related to UBS’ underwriting and issuance of residential mortgage-backed securities (RMBS) issued in 2006 and 2007.

Following an extensive investigation, the United States filed a complaint alleging that UBS defrauded investors in connection with the sale of 40 RMBS issued in 2006 and 2007. The complaint alleged that UBS knowingly made false and misleading statements to buyers of these securities relating to the characteristics of the mortgage loans underlying the RMBS in violation of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The FIRREA claims were based on alleged violations of the mail, wire, and bank fraud statutes.

The government’s complaint alleged that contrary to UBS’ representations in publicly filed offering documents, UBS knew that significant numbers of the loans backing the RMBS did not comply with loan underwriting guidelines that were designed to assess borrowers’ ability to repay. The complaint further asserted that UBS knew that the property values associated with a significant number of the securitized loans were unsupported, and that significant numbers of the loans had not been originated in accordance with consumer protection laws. UBS was allegedly aware of these significant problems because it had conducted extensive due diligence on the underlying loans prior to the RMBS being issued to determine whether the loans were consistent with representations that would be made to investors. Ultimately, the 40 RMBS sustained substantial losses.

“In the wake of the 2008 financial crisis, people all across the country experienced financial ruin and emotional devastation, and many are still recovering nearly 15 years later,” said Associate Attorney General Vanita Gupta. “As this settlement demonstrates, the department and our partner agencies remain committed to holding accountable those who break the law and undermine the well-being of American families.”

“The results achieved by the RMBS Working Group are a testament to the exceptional dedication and hard work by department attorneys over many years,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are grateful for the outstanding support provided by our partners in federal agencies and states that similarly sought to hold responsible those entities that contributed to the 2008 financial crisis.”

“With this resolution, UBS will pay for its conduct related to its underwriting and issuance of residential mortgage-backed securities. The substantial civil penalty in this case serves as a warning to other players in the financial markets who seek to unlawfully profit through fraud that we will hold them accountable no matter how long it takes,” stated U.S. Attorney Breon Peace for the Eastern District of New York. “The over $36 billion collected for conduct that fueled the 2008 financial crisis reflects the Department of Justice’s deep commitment to protecting financial markets, investors and the public against fraudulent conduct.”

“This settlement represents accountability from those who thought they were above the law,” said U.S. Attorney Ryan Buchanan for the Northern District of Georgia. “UBS’ conduct at issue in this case played a significant role in causing a financial crisis that harmed millions of Americans. We will continue to seek accountability when financial institutions – large or small – misrepresent vital information to investors and undermine trust in our public markets.”

This settlement resolves the last case brought by a Justice Department working group dedicated to investigating conduct of banks and other entities for their roles in creating and issuing RMBS leading up to the 2008 financial crisis.

“The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG), together with our RMBS Working Group partners, investigated and held accountable those who sought to victimize Fannie Mae, Freddie Mac and investors by selling fraudulent mortgage-backed securities,” said FHFA Inspector General Brian Tomney. “We appreciate our longstanding partnership with the Department of Justice and its vigorous pursuit of justice in this case.”

With the UBS settlement announced today, the Justice Department has collected more than $36 billion in civil penalties from entities for their alleged conduct in connection with mortgages securitized in failed RMBS leading up to the 2008 financial crisis. These resolutions include settlements with the following banks, mortgage originators, and rating agencies: Ally Financial; Aurora Loan Services; Bank of America; Barclays; Citigroup; Credit Suisse; Deutsche Bank; General Electric; Goldman Sachs; HSBC; JPMorgan; Moody’s; Morgan Stanley; Nomura; Royal Bank of Scotland; S&P; Société Générale; and Wells Fargo.

Collectively, these matters were handled by 11 U.S. Attorneys’ Offices and the Justice Department’s Civil Division, in conjunction with the RMBS Working Group. The RMBS Working Group was a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that led to the financial crisis. Formed in 2012, the RMBS Working Group brought together more than 200 attorneys, investigators, analysts, and staff from dozens of state and federal agencies, including the FHFA-OIG, the Department of Housing and Urban Development, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Securities and Exchange Commission, and the FBI, to investigate financial fraud in RMBS.

Assistant U.S. Attorneys Bonni J. Perlin, Michael J. Castiglione, Richard K. Hayes, Edward K. Newman and Melanie Speight for the Eastern District of New York, Austin M. Hall and Andres H. Sandoval, and former Assistant U.S. Attorney Armen Adzhemyan for the Northern District of Georgia handled the case.

The claims resolved in the settlement are allegations only and there has been no determination of liability.

 

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Mortgage Loan Officer Sentenced For Bank Fraud

Stephanie Abbott —  August 14, 2023 — Leave a comment

Omayra Ujaque , 52, St. Cloud, Florida, has been sentenced to two years and eight months in federal prison for bank fraud and aggravated identity theft.

According to evidence presented at trial, Ujaque, in her capacity as a licensed mortgage loan officer, created and executed a mortgage fraud scheme targeting the financial institution where she worked. To ensure that otherwise unqualified borrowers were approved for mortgage loans, Ujaque falsified the borrowers’ income by fabricating or inflating the amounts of their monthly child support payments on mortgage loan applications that she signed and certified to the financial institution’s underwriting department. In furtherance of her scheme, Ujaque created fictitious Final Judgments of Dissolution of Marriage and Final Orders Modifying Child Support that fraudulently represented that the borrowers were entitled to receive non-existent monthly child support payments. Ujaque then used the names of judges from the Circuit Court of the Ninth District of Florida and forged their signatures on the fabricated Final Judgments of Dissolution of Marriage or Final Orders Modifying Child Support. Ujaque also created bogus Florida Department of Revenue statements listing fraudulent monthly child support payments, as well as phony prepaid debit card statements listing fake borrower withdrawals of the non-existent monthly child support payments.

In most cases, the borrowers did not have the listed children and/or had never been married. Ujaque submitted bogus paperwork to the financial institution to support the false monthly income on the loan applications. Based on Ujaque’s misrepresentations, the financial institution approved and funded the mortgage loans.

Ujaque was convicted at trial on April 13, 2023.

This case was investigated by Federal Housing Finance Agency – Office of Inspector General, the United States Department of Housing and Urban Development – Office of Inspector General, and the Florida Office of Financial Regulation. It was prosecuted by Special Assistant United States Attorney Chris Poor.

 

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Man Pleads Guilty In Nationwide Mortgage Fraud Scheme

Stephanie Abbott —  July 31, 2023 — Leave a comment

Brian Roy Lozito, 53, Orange Park, Florida, has pleaded guilty to conspiracy to commit wire fraud.

According to court documents, Lozito owned and managed American Investigative Services (AIS). AIS purported to offer consumers mortgage auditing services in exchange for a fee. Lozito and his conspirators solicited customers nationwide through mailings and telephone calls. In these solicitations, Lozito and AIS employees, under the direction of Lozito, made false and fraudulent representations to consumers, including that AIS would perform “forensic audits” of mortgage documents to uncover evidence of deficiencies in the mortgage documents. Lozito claimed AIS would obtain quitclaim deeds and other remedies, so the mortgage holders would be relieved of their mortgage debt and own their properties free and clear. If AIS could not help the consumer, Lozito promised to refund their money. In reality, AIS did not perform the services paid for by consumers and did not refund money to consumers. Funds collected from consumers went to bank accounts controlled by Lozito. Lozito used the funds to keep AIS operating and for personal expenses.

Lozito faces a maximum penalty of 20 years in federal prison and payment of restitution to the victims he defrauded. Lozito was arraigned on the indictment on January 11, 2021, and initially released on bond. The court revoked his bond on November 18, 2022, and subsequently ordered him detained. A sentencing date has not yet been set.

United States Attorney Roger B. Handberg made the announcement.

This case was investigated by United States Secret Service – Jacksonville Field Office and the State of Florida Office of Attorney General – Consumer Protection Division, with valuable assistance from the Clay County Sheriff’s Office. It is being  prosecuted by Assistant United States Attorney the Kevin C. Frein. The asset forfeiture is being handled by Assistant United States Attorney Mai Tran.

 

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Women Sentenced For Fraudulent Gift Letters In Support of Mortgage Loan Applications

Stephanie Abbott —  July 12, 2023 — Leave a comment

Lee Ann Benninghoff, 45, Aliquippa, Pennsylvania, has been sentenced in federal court to one (1) day of imprisonment and three (3) years of supervised release on her conviction of bank fraud and conspiracy.

According to information presented to the court, Benninghoff owned and operated Complete Escrow and Bella Casa Realty. From February 2014 through March 2017, Benninghoff used her position and connections in real estate financing, and conspired with others in the industry, to submit fraudulent gift letters in support of mortgage loan applications. The gift letters misrepresented the source of the funds and their purported purpose.

United States Attorney Eric G. Olshan made the announcement today.

Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.

United States Attorney Olshan commended the Federal Housing Finance Agency Office of Inspector General, the U.S. Department of Housing and Urban Development Office of Inspector General, and the U.S. Secret Service for the investigation leading to the successful prosecution of Benninghoff.

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Former Sheriff’s Officer Admits Role in Connection with Fraudulent Short Sale

Stephanie Abbott —  May 23, 2023 — Leave a comment

Osbado Hernandez, 54,  Avenel, New Jersey, a former Hudson County Sheriff’s Officer admitted conspiring to make false statements to a bank in connection with an application to discharge a mortgage through a fraudulent short sale.

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

From September 2015 to Dec. 30, 2015, in order to induce a bank to discharge the mortgage he owed on his house in Keansburg, New Jersey, Hernandez agreed with others to make false statements in connection with a fraudulent short sale of the property, including that he did not have any money to apply toward his mortgage delinquency and that he did not intend to stay in the house for more than 90 days following the short sale. As a result of the fraudulent short sale, the bank discharged over $98,000 of debt against Hernandez.

The false statements conspiracy charge is punishable by a maximum potential penalty of five years in prison and a maximum fine of up to $250,000. Sentencing is scheduled for Oct. 4, 2023.

Hernandez pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court on May 22, 2023, to an information charging him with one count of conspiracy to make false statements in connection with the release of a loan.

U.S. Attorney Sellinger credited special agents with the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, and special agents with IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, with the investigation leading to the guilty plea.

U.S. Attorney Philip R. Sellinger made the announcement.

The government is represented by Assistant U.S. Attorney Elaine K. Lou, Chief of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit.

 

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Third Defendant Pleads Guilty in Conspiracy to Steal USDA-Mortgaged Houses

Stephanie Abbott —  May 22, 2023 — Leave a comment

Ella Martin, 69, Jayess, Mississippi, pleaded guilty to conspiring to steal houses from the United States Department of Agriculture.

According to court documents, conspired with others to identify and steal USDA-mortgaged properties. The targeted properties were mortgaged through the Brookhaven office of USDA Rural Development, an agency which helps rural residents buy or rent safe, affordable housing, especially low and very-low income individuals. As an employee of that office, Martin had access to a list of abandoned, foreclosed, nearly-foreclosed, or similarly distressed USDA-mortgaged properties and would create fraudulent warranty deeds designed to convey ownership of those properties to co-conspirators and others. The fraudulent deeds included forged signatures from former homeowners, including at least one deceased individual. The fraudulent deeds were then filed in Chancery Courts around Mississippi with the intent to deprive the actual owners of the use and benefit of the properties and to deprive the United States Government of the actual value of the properties.

Martin pleaded guilty to a violation of Title 18, United States Code, Section 371, which criminalizes conspiracies against the laws of the United States. She is scheduled to be sentenced on September 19, 2023 and faces a maximum penalty of five years in prison and a $250,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Co-defendants Barry Martin and Fiesta Kagler entered guilty pleas last year and are scheduled to be sentenced on June 15, 2023.

The USDA OIG and the Federal Bureau of Investigation investigated the case.

U.S. Attorney Darren J. LaMarca and Special Agent in Charge Dax Roberson of United States Department of Agriculture, Office of the Inspector General made the announcement.

Assistant U.S. Attorney Kimberly T. Purdie is prosecuting the case.

 

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