Hubert Rotteveel, 52, Dixon, California, was convicted by a federal jury of one count of mail fraud affecting a financial institution relating to his role in a mortgage fraud scheme. The defendant and his conspirators inflated the values of 13 properties then worked with loan officers to provide false information to lenders about the income and liabilities of the buyers.
According to evidence produced at trial, Rotteveel acted as a real estate salesperson for 13 properties in Dixon, California, that were purchased by just two buyers. Rotteveel 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 made the down payments on the homes, including two that he owned and sold, 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. Rotteveel netted over $300,000 through the sales in just seven months. According to the indictment, the lenders lost more than $3 million when all 13 properties underwent foreclosure.
Rotteveel’s conviction marked the third mortgage fraud conviction following trial in the past four weeks in the Eastern District. Anna Kuzmenko was convicted following a jury trial on August 29, 2014, and Alan David Tikal was convicted following a bench trial on September 15, 2014.
This case is 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 are prosecuting the case.
Rotteveel is set to be sentenced before Senior United States District Judge William B. Shubb on December 15, 2014, at 9:30 a.m. Rotteveel faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
United States Attorney Benjamin B. Wagner announced the conviction.
U.S. Attorney Wagner stated: “Hubert Rotteveel manipulated every aspect of the real estate process for his personal gain. As so often occurs in these cases, the result was losses to the financial institutions and neighborhoods burdened with foreclosed properties. We are grateful for the diligence, professionalism and cooperation that we have received from the FBI, the IRS, and all of our law enforcement partners in prosecuting these cases.”
“The defendant induced lenders to fund loans under false pretenses and then diverted a portion of the loan proceeds to himself,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “Each of the homes purchased during the course of the scheme was foreclosed upon. The impact of this type of fraud on homeowners and communities is devastating. IRS-CI is committed to pursuing those who line their pockets with profits from these schemes.”
“Rotteveel’s personal greed replaced the integrity maintained by licensed real estate agents. He intentionally defrauded the mortgage industry, artificially inflating home prices and facilitating loans that were destined for bankruptcy for personal gain,” said Assistant Special Agent in Charge John Gliatta of the Sacramento FBI. “Our FBI agents are committed to working with our investigative partners, such as the IRS and others, to identify and investigate individuals who erroneously believe such schemes have no victims and have no effect on the region’s economy.”