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Seven Defendants Sentenced in $10 Million Mortgage Fraud Scheme

Stephanie Abbott —  October 20, 2021 — Leave a comment

Carlos Rafael Castaneda Mendez, 34, Miami, Florida, Alejandro Boada Oliveros, 45, Miami, Florida, Jonnathan Jesus Gonzalez, 33, Miami, Florida, Yanjeisis Alejandra Pompa Villafane, 25, Hialeah, Florida, Lilia Rosa Morales Moreno, 45, Miami, Florida, Katherine Hansen Mendoza, 25, Miami, Florida and Isbel Rodriguez Batista, 23,  Teaneck, New Jersey were sent to federal prison for their roles in a fraud scheme that involved stealing identities, creating and using fake foreign passports, impersonating homeowners, and falsifying loan documents to trick lenders into providing millions of dollars of mortgage loans on unencumbered residential properties.

The scheme followed a general pattern.  First, the fraudsters would identify residential homes with no mortgages, and absent owners, located in high-end South Florida neighborhoods.  Next, using the names and other identity information of the true homeowners, the fraudsters created fake passports.  Alongside the homeowners’ names, the fraudsters placed photographs of co-conspirators.  Some of those co-conspirators appeared at loan closings posing as the homeowners.  The fraudsters used the fake passports to apply for mortgage loans from private lenders and to open bank accounts in the homeowners’ names — accounts into which lenders wired the loan money.  They used the stolen money to buy luxury cars, expensive watches, and other items.  In total, the scheme drained close to $10 million of equity from South Florida homes.

Carlos Rafael Castaneda Mendez was sentenced to 78 months, Alejandro Boada Oliveros was sentenced to 46 months, Jonnathan Jesus Gonzalez was sentenced to 44 months, Yanjeisis Alejandra Pompa Villafane was sentenced to 28 months, Lilia Rosa Morales Moreno was sentenced to 30 months; Katherine Hansen Mendoza was sentenced to seven months and Isbel Rodriguez Batista, was sentenced to 30 months.

Charges against other defendants are pending.  An indictment is only an accusation and defendants are presumed innocent unless and until proven guilty.

Juan Antonio Gonzalez, Acting United States Attorney for the Southern District of Florida; Brian Swain, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office; and Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office made the announcement.

USSS Miami, HSI Miami, and Aventura Police Department investigated this case.  Assistant U.S. Attorney Stephanie Hauser is prosecuting the case.  Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case no.: 20-cr-20155.

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Businessman Sentenced For and Mortgage Fraud

Stephanie Abbott —  July 1, 2021 — Leave a comment

Casey David Crowther, 35, Fort Myers, Florida has been sentenced to three years and one month in federal prison for two counts of bank fraud, two counts of making a false statement to a lending institution, and two counts of money laundering.

At trial, a federal jury had found Crowther guilty of committing bank fraud, making a false statement to a lending institution, and two counts of money laundering on March 26, 2021, which were related to a PPP fraud scheme. Before the trial started, Crowther pleaded guilty to one count of bank fraud and one count of making a false statement to a financial institution, which were related to a mortgage fraud scheme. As part of the mortgage fraud scheme, Crowther created false bank statements to justify a loan he had used to purchase a nearly $1.3 million waterfront house in St. James City, Florida.

According to evidence at the trial, Crowther obtained a $2.1 million PPP loan by falsely stating that he had intended to use the money to make payroll and pay rent and utilities for his company Target Roofing and Sheet Metal, Inc. However, Crowther intended to use the money to enrich himself and, once the loan was obtained, quickly used the proceeds to make a series of personal purchases including a nearly $700,000 boat and a $100,000 payment to a former business partner. Crowther concealed the scheme by providing false explanations for the expenditures to his bank, calling the boat “equipment” and the payment to his former partner “payroll.” Under the terms of the PPP program, Crowther did not have to pay back the loan if he used at least 60% of the proceeds on payroll. To falsely make it appear he met that threshold, Crowther created dozens of fake employees to whom he purportedly paid wages: by adding multiple family members to his company’s payroll, even though they did not actually perform work; and, separately, by creating 39 other fake employees, for whom he obtained fake identification documents — including Social Security cards — that he provided to his company’s Human Resources to be placed in the files of the “employees.”

The court also ordered Crowther to forfeit $2,739,081.21, $630,482.37, and a 40’ catamaran boat, which were the proceeds of the Paycheck Protection Program (PPP) fraud and the mortgage fraud offenses.

This case was investigated by the United States Secret Service. It was prosecuted by Assistant United States Attorneys Trent Reichling and Michael V. Leeman. Assistant United States Attorney Suzanne Nebesky obtained the forfeitures.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form

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Final Family Member Sentenced in Short Sale Mortgage Fraud Scheme

Stephanie Abbott —  March 22, 2021 — Leave a comment

Ana Cummings, 61, Davie, Florida, the last of six South Florida family members was sentenced today to a term of imprisonment, and ordered to pay a total of $1,342,928.77 in restitution, following her conviction by way of guilty plea in August 2020, to conspiracy to commit bank fraud.

During prior hearings, Cummings’s sons, Valentin Pazmino, 34, and Rene A. Pazmino, 36, were sentenced to 27 months and 18 months of imprisonment, respectively. Her daughters, Grace Pazmin, 43, and Diana Pazmino, 31, were sentenced to 27 months and 22 months of imprisonment, respectively. Her son-in-law Jared Marble, 43, Grace Pazmino’s husband, was sentenced to 16 months of imprisonment. All sentences were imposed by United States District Judge Jose E. Martinez following guilty pleas. Pursuant to their plea agreements, the defendants made a full payment of the restitution judgment prior to their sentencings.

According to court documents, various defendants participated in a series of ten fraudulent real estate short sale transactions in South Florida between May of 2012 and June of 2015. Cummings and Grace Pazmino participated in all ten of the fraudulent short sales. Diana Pazmino and Valentin Pazmino each participated in nine of the fraudulent short sales. Marble participated in three of the fraudulent short sales. Rene A. Pazmino participated in two of the fraudulent short sales.  In each short sale transaction in which they participated, the defendants made materially false statements to a financial institution in order to defraud it into approving the short sale. Specifically, the defendants executed short sale affidavits and affidavits of arm’s length transactions falsely attesting that the sales were between unrelated, unaffiliated parties. In reality, the sales were between and among the defendants, companies controlled by the defendants, and/or individuals recruited by a defendant to participate in the fraud scheme. Members of the conspiracy also executed HUD-1 Settlement statements misrepresenting that the named buyer made the required cash-to-close payment.  In reliance on these material representations, various financial institutions authorized property sales for amounts less than the outstanding principal balances due on mortgages they held on the properties, thereby incurring losses.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Tyler R. Hatcher, Acting Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Miami Field Office, and Special Agent in Charge Edwin S. Bonano of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG) Southeast Region made the announcement.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the Internal Revenue Service-Criminal Investigation, Miami Field Division and the Federal Housing Finance Agency – Office of Inspector General Southeast Region.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov, under case number 19-cr-20606-JEM.

 

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Attorney General Co-Leads Bipartisan Coalition Fighting for Homeowners

Stephanie Abbott —  January 29, 2021 — Leave a comment

Minnesota Attorney General Keith Ellison and New York Attorney General Letitia James today led a bipartisan coalition of 33 attorneys general in opposing a proposed class action settlement that would permit PHH Mortgage Corporation and its predecessor corporation, Ocwen Loan Servicing, LLC (collectively “PHH”), to continue to profit from often-illegal payment-processing fees that they charge to homeowners.

For years, PHH has been charging more than 17,000 homeowners in Minnesota and close to a million homeowners nationwide, a fee – anywhere from $7.50 to $17.50 each time – solely to make their monthly mortgage payment if that payment is made by phone or through the homeowner’s online account. Nowhere in these homeowners’ mortgage contracts is there authorization for such fees. In fact, PHH does not charge “processing” fees when its customers pay by check or set up automatic debit payments.

But under the terms of the proposed class settlement — a settlement that was hastily entered into only five months after the complaint was filed — PHH would be permitted to continue to charge these fees, up to $19.50 per month, for the remaining life of the loan, which for many Minnesotans could be another 20 to 30 years. In exchange, homeowners will receive a paltry, and for some, illusory, one-time monetary payment. In addition, the proposed settlement seeks to authorize these unlawful fees through an unwritten, mass amendment of the mortgages, a violation of most states’ statutes of frauds, a centuries-old legal doctrine that requires contracts related to property be in writing and signed by the parties.

As if transforming homeowners into a profit center in violation of states’ laws was not enough, the proposed settlement is designed to ensure that a portion of the monetary relief intended for homeowners will actually end up in PHH’s hands. For homeowners whose loans are still serviced by PHH, the only relief will be a credit to their account, with late fees being paid before any credit is applied to the unpaid principal balance of the mortgage. As a result, these credits toward late fees are more of a self-dealing payment to PHH rather than any kind of relief to the homeowner.

Finally, any settlement funds not distributed to the class member homeowners will be returned to PHH. Such a feature in a class-action settlement often suggests to courts that the settlement simply benefits the attorneys involved and is not in the best interest of the impacted class members.

Attorneys General Ellison and the coalition filed an amicus brief in U.S. district court in Florida opposing the proposed settlement in Morris et al. v. PHH Mortgage Corporation, et al.

“Affording your life is tough enough — and for years, PHH has made it tougher on 17,000 Minnesotans by charging them outlandish, unnecessary, and possibly illegal fees just for the privilege of paying their mortgage. Now, this hastily settled class action lawsuit will allow PHH to continue this harmful practice, in some cases for decades. This doesn’t pass the smell test,” Attorney General Ellison said. “The job of attorneys general is to protect the residents of our states against abuse. I’m proud that more than 30 of us have rallied to stand up for our homeowners and push back on this proposed settlement that benefits the abuser.”

Joining Attorneys General Ellison and James in filing today’s amicus request are the attorneys general of Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and West Virginia.

 

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Man Indicted In Nationwide Mortgage Fraud Scheme

Stephanie Abbott —  January 12, 2021 — Leave a comment

Brian Roy Lozito, 51, Orange Park, Florida has been charged with conspiracy to commit wire fraud and 12 counts of wire fraud.

According to the indictment, 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 his direction made false and fraudulent representations to consumers, including that AIS would perform “forensic audits” of mortgage documents in order 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. Money collected from consumers went to bank accounts controlled by Lozito, and he spent the money.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

If convicted, Lozito faces a maximum penalty of 20 years in federal prison on each count and payment of restitution to the victims he defrauded. Lozito was arraigned on the charges on January 11, 2021. His trial is set for March 1, 2021.

United States Attorney Maria Chapa Lopez made the announcement.

This case was investigated by the U.S. Secret Service (Jacksonville Field Office) and the Office of the Florida Attorney General – Consumer Protection Division, with assistance from the Clay County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Kevin C. Frein.

 

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Business Owner Charged with Mortgage Fraud

Stephanie Abbott —  October 29, 2020 — Leave a comment

Casey David Crowther ,35, North Fort Myers, Florida has been charged in a superseding indictment with two counts of bank fraud, two counts of making a false statement to a lending institution, and three counts of illegal monetary transactions.

According to the superseding indictment, as part of his scheme, beginning in June of 2020, Crowther submitted false and fraudulent Uniform Residential Loan Applications (URLA) to a mortgage broker and mortgage lender, causing the lender to disburse approximately $640,381 in loan funds. Specifically, Crowther intentionally misrepresented his liquid assets in the URLAs and created false and fraudulent bank statements which purported to show he had more assets than he actually had.

If convicted, Crowther faces a maximum penalty of 30 years in federal prison on each bank fraud and false statement count, and up to 10 years’ imprisonment for each illegal monetary transaction count.

The indictment also notifies Crowther that the United States intends to forfeit a 2020 40-foot catamaran, real property in St. James City, Florida, and $2,098,700, which are alleged to be proceeds of the offenses; the real property is also subject to forfeiture because it was involved in the illegal monetary transaction.

A federal grand jury had previously indicted Crowther for COVID relief fraud on September 23, 2020. The superseding indictment contains additional counts charging Crowther with mortgage fraud.

A superseding indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

United States Attorney Maria Chapa Lopez made the announcement.

This case was investigated by the United States Secret Service. It will be prosecuted by Assistant United States Attorney Trent Reichling.

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Fraudster Sentenced in Fraudulent Mortgage Debt Reduction Scheme

Stephanie Abbott —  October 23, 2020 — Leave a comment

Anthony T. Williams, 49, Pineville, Louisiana was sentenced today in federal court to 240 months’ imprisonment for wire fraud and mail fraud in connection with a fraudulent mortgage relief scheme.

Williams marketed a fraudulent mortgage debt reduction scheme to distressed homeowners, who were mostly non-native English speakers in the Filipino immigrant community in Hawaii. Williams created two companies, Mortgage Enterprise Investments (MEI) and Common Law Office of America (CLOA), neither of which was licensed to service or modify mortgages. Through MEI, Williams made conflicting promises to clients that he could eliminate their existing mortgage obligations to their lenders, or reduce their mortgage obligations by half. Through CLOA, Williams promised legal representation in mortgage-related litigation and foreclosure proceedings. To give himself the appearance of credibility, Williams told prospective clients he was a “private attorney general” and brandished an official-looking law enforcement badge and credentials, despite not having a law license or any affiliation with law enforcement.

Williams falsely promised victims that he could eliminate their existing home mortgage obligations by filing bogus documents with the Hawaii Bureau of Conveyances. These documents included new MEI mortgages and notes obligating homeowners to make monthly payments to MEI. Williams then advised homeowners to stop making their mortgage payments to their lenders and to pay him instead.

Between 2012 and 2015, Williams enlisted 112 victims in Hawaii into his MEI program and fraudulently obtained over $230,000 from his victims, without providing any legitimate services. Several victims testified at trial that they had relied upon Williams’s representations and went into foreclosure or bankruptcy. Two victims testified that they lost their homes as a result of Williams’s scheme.

“For several years, Anthony Williams actively preyed upon distressed homeowners within the Filipino community here in the State of Hawaii. His scheme financially devastated his victims, forcing some into bankruptcy and homelessness. As a result of this prosecution, Williams’s scheme has come to an end and Williams will be incarcerated for 20 years. My office will continue to protect the most vulnerable members of our community,” said U.S. Attorney Price.

“Williams knowingly targeted and preyed upon citizens of our Filipino community” said Eli Miranda, Special Agent in Charge of the FBI’s Honolulu Division. “He took advantage of this vulnerable and in need population, delivering empty promises. He drained their finances leaving many penniless. The FBI cannot, and will not stand by. We will continue to maximize our efforts with partner agencies to bring these perpetrators to justice and hold them accountable for their crimes.”

A federal jury convicted Williams on March 3, 2020 of 32 counts of wire fraud and mail fraud after a four week trial.

In addition to a term of imprisonment, the Court also imposed three years of supervised release, and restitution. The Court’s sentence of imprisonment is to run consecutively to a fifteen-year sentence of imprisonment that another court had handed down earlier to Williams for similar fraudulent conduct in the State of Florida.

The investigation was led by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kenneth M. Sorenson and Gregg Paris Yates handled the prosecution.

 

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Lee Farkas Released from Prison

Rachel Dollar —  September 16, 2020 — Leave a comment

On June 30, 2011, Lee Farkas was sentenced to serve 360 months in in Federal Prison.  He has been serving that time at Coleman Low Federal Correctional Institution in Sumterville, Florida and was scheduled to be released from prison on October 31, 2036.  

Yesterday, U.S. District Court Judge Leonie Brinkema in Alexandria, Virginia granted an emergency motion for compassionate release and reduced his sentence to time served.  He will be on supervised release for the next 3 years.

The motion was based on the “global health crisis created by the COVID-19 pandemic and the active outbreak of COVID-19 at FCI Coleman” (Emergency Motion for Compassionate Release, August 20, 2020, PACER ID 7748)  According to the declaration in support of the motion, Mr. Farkas, who is 67 years old, “has been diagnosed with coronary artery disease, hypertension, and hyperlipidemia … as well as atrial fibrillation, arthrosclerosis, actinic keratosis, gastro-esophageal reflux disease, anemia, sleep apnea, a heart murmur, and has a documented medical history of several bouts of bronchopneumonia” and, while in the custody of the Bureau of prisons, “suffered from gastritis and diverticulosis resulting in
gastrointestinal bleeding and requiring an extensive period of hospitalization.”

According to the declaration, when released, Mr. Farkas plans to reside with his sister, Terri Huber, in Albuquerque, New Mexico.

According to the Orlando Sentinel, prosecutors opposed the release and asked the judge to at least impose home confinement.  However, Judge Brinkema said it is “unreasonable to expect him to live 21 years in his sister’s house.”

Mr. Farkas had previously requested compassionate release from the Warden at FCI Coleman and that request was denied on April 8, 2020.  He also requested compassionate release under the CARES act but was found ineligible as he had not completed 50% of his sentence. Reconsideration was refused.

As of August 13, 2020, according to the memorandum, FCI Coleman low security had reported 21 staff members and 131 inmates with confirmed positive COVID-19 tests.  And additional 63 inmates had recovered while one inmate had died as a result of COVID-19.  At FCI Coleman medium security, 31 staff members and 78 inmates were reported with confirmed positive COVID-19 tests with an additional 110 inmates having recovered and one inmate whose death was attributed to COVID-19.

Lee Farkas only served 9 years of his 30 year sentence.

For those of you who don’t remember the Taylor, Bean & Whittaker debacle, Lee Farkas was essentially accused of stealing over a billion dollars through his company, Taylor Bean & Whittaker.   TBW overdrew its warehouse operations account and Colonial Bank covered the overdrafts by sweeping money from the investor funding account.  The end of day reports would show no overdraft and, first thing in the morning, Colonial would transfer the funds back to the investor funding account. This happened for over a year, during which time the overdraft was growing by tens of millions of dollars a month.  By December 2003, the overdraft was $120 million dollars.

As the overdraft grew, it became more difficult to hide and Farkas came up with a plan, referred to as “Plan B” where TBW would put dummy loans on Colonial’s books in order to keep track of the outstanding overdraft – basically, selling fake assets to Colonial or “selling” loans to Colonial that had already been sold to a different bank. No loans were actually transferred to Colonial, the only thing that Colonial received was data. TBW would refresh the data to make it appear that the fake loans were being sold and new loans were being originated.  Under Plan B, by mid-2005, the deficiency was over $300M.

When the ‘refreshing’ of these individual loans became burdensome, the overdraft was moved into loan pools.  This also reduced the amount of regulatory scrutiny.  Under this scenario, TBW would fund an entire pool of fake or double-sold loans through Colonial.  The pools would be “recycled” to avoid notice.  Over $500M in fake pools were on Colonial’s books by 2009.  At that time, Cathie Kissick and her staff at Colonial refused to provide further funds to TBW.

TBW then started to use its own related warehouse facility, Ocala Funding, to generate money.  By August of 2009, the deficit at Ocala Funding was around $1.5B 9.

On August 3, 2009, the FBI raided TBW.

According to the government’s argument at trial, the total losses from the scheme were $2.9 Billion. (The above facts are summarized from testimony at Mr. Farkas’s trial)

As a result, TBW and Colonial Bank failed.

All others indicted and convicted with Mr. Farkas have completed their sentences and have released from custody.  Teresa Kelly was sentenced to 3 months and was released on 11/14/2011.  Sean Ragland was setenced to 3 months and was released on 10/26/2011.  Ray Bowman was sentenced to 30 months and was released on 9/20/2013.  Paul Allen was sentenced to 40 months and was released on 6/20/2014. Desiree Brown was sentenced to six years and was released on 11/21/2016. Cathie Kissick, who was considered by many to be a victim of Lee Farkas, was sentenced to 8 years in prison and was released on August 3, 2018.

 

 

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Duo Sentenced For Conspiracy To Make False Statements To Banks

Stephanie Abbott —  June 15, 2020 — Leave a comment

Jonathan Marmol, 41, Odessa, Florida has been sentenced to 15 months in federal prison and Mordechai Boaziz, 67, Miami Beach, Flordia, to 90 days in federal prison for conspiracy to make false statements to financial institutions.

According to court documents, beginning around the summer of 2006, and continuing through August 2008, Boaziz and Marmol conspired with others to execute a scheme to influence the credit decisions of financial institutions in connection with the sale of condominium units at The Preserve at Temple Terrace, a 392-unit condominium complex located in Temple Terrace, Florida. Boaziz was a real estate developer converting The Preserve from an apartment complex into a condominium complex. Boaziz, the leader and organizer of the fraud scheme, hired Marmol to market the condominium units at the complex.

In order to recruit and entice otherwise unqualified buyers to purchase units at The Preserve, the conspirators offered to pay the prospective buyers’ down payments (“cash-to-close”). The conspirators then intentionally concealed the cash-to-close payments from the financial institutions that originated and funded the related mortgage loans.

In particular, the HUD-1 Settlement Statements submitted to the financial institutions falsely stated that the buyers brought their own cash-to-close funds to purchase the units, which influenced the financial institutions’ mortgage loan approval decisions. In reality, Boaziz funded the buyers’ cash-to-close and routed the payments through Marmol and others. Boaziz caused approximately $5.36 million in losses, and Marmol caused approximately $330,000 in losses to the victim financial institutions who financed the units at The Preserve.

Marmol and Boaziz had pleaded guilty to the offenses in November 2019. http://www.mortgagefraudblog.com/?s=Jonathan+Marmol

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay L. Hoffer.

 

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Former Attorney Charged in Foreclosure Fraud Scheme

Stephanie Abbott —  May 27, 2020 — Leave a comment

James Lee Clark, 59, Wilton Manor, Florida has been charged with one count of conspiracy to commit bankruptcy fraud, seven counts of bankruptcy fraud, one count of making a falsification of records in a bankruptcy proceeding, and eight counts of wire fraud.

According to the indictment, from January 2010 through February 2017, Clark conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors, such as Fannie Mae, who were holding mortgage notes on properties that were in foreclosure. The indictment further charges that Clark and Liebman falsely and fraudulently represented to the distressed homeowners facing foreclosure that, in exchange for executing quitclaim or warranty deeds for their properties to an entity controlled by Liebman, they would negotiate with the mortgage creditors to prevent foreclosures. Clark and Liebman convinced the distressed homeowners to pay them rent, or agree to put their houses up for sale. In order to continue to collect ill-gotten rents, or profit from the sale of the properties, Clark allegedly filed fraudulent bankruptcy petitions in the names of the homeowners to prevent the mortgage creditors from lawfully foreclosing and taking title to the property. In some instances, Clark filed multiple fraudulent petitions in the names of distressed homeowners.

Additionally, it is further alleged that, from January 2012 to February 2017, Clark, who was a licensed attorney, defrauded his clients out of approximately $1.3 million. As part of his practice, Clark would act as a trustee for his clients and also hold their money in various bank accounts depending on the purpose of trust.  Instead of using the funds for the purpose intended by his clients, Clark would divert the money into his law firm’s bank accounts and pay for personal expenses, such as gambling, travel, and automobiles.

Liebman pleaded guilty to one count of conspiracy to commit bankruptcy fraud on September 24, 2019. His sentencing hearing is scheduled for January 14, 2021.

United States Attorney Maria Chapa Lopez made the announcement.

If convicted, Clark faces up to 20 years’ imprisonment for the falsification of records count and for each wire fraud count. He faces up to 5 years in federal prison for the conspiracy count, and for each bankruptcy fraud count. The indictment also notifies Clark that the United States is seeking a money judgment of $1.3 million, the proceeds of the charged criminal conduct.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. The Office of United States Trustee for the Middle District of Florida, Tampa Division provided substantial investigative assistance. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

 

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