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Former Title Agency Owner Sentenced for Mortgage Fraud

admin —  July 26, 2012 — Leave a comment

Cynthia Darlene Strickland, 46, Jacksonville, Florida, a licensed title agent and the owner of Premier Title Group, Inc., has been sentenced for bank fraud related to a mortgage fraud scheme.

As previously reported on Mortgage Fraud Blog and according to court documents, the orchestrator of the mortgage fraud scheme was Juan Carlos Gonzalez.  Gonzalez entered into contracts to buy residential real estate properties and retained a licensed real estate appraiser, Barry Westergom, to appraise the properties. Westergom fraudulently appraised the properties at values that were significantly inflated above the agreed purchase price.
         
Gonzalez recruited third-party buyers to enter into a second contract that listed the fraudulently inflated appraised value as the purchase price. Gonzalez applied for mortgage loans in the name of the third-party buyers, and in support of the applications he submitted the second contract, the fraudulent appraisal, and false financial information about the buyers. Based upon this information, banks and other mortgage lenders approved the loans.

Gonzalez recruited Strickland to be the closing agent for the transactions. Strickland’s plea agreement describes a transaction that was funded by first and second mortgage loans that Gonzalez fraudulently obtained from Lehman Brothers Bank. As part of her responsibilities as closing agent, Strickland prepared a standard settlement statement that identified various expenses, payments, and disbursements related to the transaction.

On the settlement statement, Strickland represented that the purchase price of the property was $725,000, the inflated appraised value, when in fact the purchase price was $570,000, the price Gonzalez had negotiated with the sellers. Although Strickland knew that two contracts existed, one for the lower price negotiated with the sellers and one for the higher price based on the inflated appraisal, she did not inform the bank of these facts.

Strickland also falsely represented on the settlement statement that the third-party buyer would make a $70,694.24 down payment when in fact no down payment was made. During the closing, Strickland informed the bank that all closing conditions had been met and, as a result, the bank disbursed a first mortgage loan of $581,239.51 and a second mortgage loan of $104,170.47. After the bank disbursed the funds, Strickland issued a check to Gonzalez for $155,000, which was the difference between the actual purchase price, $570,000, and the inflated appraised value, $725,000. Gonzalez deposited the funds at a financial institution and obtained a cashier’s check in the name of the third-party buyer for the down payment. Gonzalez then provided this check to Strickland, who deposited it into her title agency’s escrow account as the down payment for the transaction. Although Strickland knew that the down payment did not come from the buyer’s funds but instead came from the loan funds, through Gonzalez, she did not inform the bank of this fact.
         
Juan Carlos Gonzalez and Barry Westergompreviously pled guilty for their roles in this scheme.  Gonzalez was sentenced to seven years in federal prison and Westergom was sentenced to four years in federal prison.

As part of the sentence, the U.S. District Judge Henry Lee Adams, Jr.  ordered Strickland to pay restitution to victims in the amount of $531,356. The court also entered a judgment against Strickland for $178,625, which was the amount of money she received as a result of the scheme. Strickland pled guilty on August 18, 2011.

U.S. Attorney Robert E. O’Neill made the announcement.

This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Arnold B. Corsmeier.

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Arrests Made for Mortgage Fraud and Attempted Murder Charges

Allison Tussey —  July 20, 2012 — Leave a comment

Eleven individuals from five states are charged in New Jersey for their alleged roles in a $15 million mortgage fraud scam that used phony documents and straw buyers to make illegal profits on overbuilt condos, including a defendant who attempted to murder a witness to the scheme.

Willie W. Richardson, 64, Bloomfield, New Jersey; Sean A. Souels, 42, Philadelphia; Nancy E. Wolf-Fels, 55, Toms River, New Jersey; Deborah L. Hanson, 49, Voorhees, New Jersey; Seth A. Fuscellaro, 39, Wildwood Crest, New Jersey; Larry L Fullenwider, 61, Millburn, New Jersey; and Angela L. Celli, 41, Somerset, Massachusetts, are in federal custody following their arrests by special agents of the FBI and IRS”“Criminal Investigation.

Dwayne K. Onque, 44, Belleville, New Jersey, surrendered to authorities, and Timothy D. Ricks, 44, East Orange, New Jersey, and Orlando Allen, 47, Fayetteville, Georgia, are expected to surrender to federal authorities. Kinard J. Henson, 40, Ventress, Alabama, was already in federal custody in Alabama. Henson also is charged with the attempted murder of a straw buyer who was a witness to the mortgage fraud scheme.

The defendants arrested in the New Jersey area are expected to appear before U.S. Magistrate Judge Ann Marie Donio in Camden federal court. Cilli will have an initial court appearance in her home state before coming to New Jersey to answer the charges in the superseding indictment, returned by a federal grand jury on July 17, 2012.

All 11 defendants are charged with conspiracy to commit wire fraud. Additionally, Ricks, Henson, Richardson, Allen, and Onque are charged with conspiracy to commit money laundering. As previously stated, Henson also is charged with the attempted murder of a straw buyer who was a witness to the mortgage fraud scheme.

According to the superseding indictment: Ricks and his co-conspirators located oceanfront condominiums overbuilt by financially distressed developers to purchase, negotiating a buyout price with the sellers of the properties. They then caused the sales prices for the properties””located in Wildwood Crest and North Wildwood, New Jersey; other locations in New Jersey; and in Naples, Florida””to be much higher than the buyout price to ensure large proceeds. Celli and Fuscellaro helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder fee agreements.

Ricks, Henson, Allen, and Souels then recruited straw buyers, such as Fullenwider and Onque, to purchase those properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents such as fake W-2 forms, pay stubs, bank statements, and investment statements to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.

To prepare the straw buyers’ false loan applications, Ricks and his conspirators caused fraudulent mortgage loan applications in the names of the straw buyers, including the supporting documents, to be submitted to mortgage brokers””including Wolf-Fels and Hanson“”that the brokers knew were false, attributing to the straw buyers inflated income and assets. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Ricks and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.

Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson‘s direction and using Henson‘s firearm, the other individual shot the straw buyer multiple times.

The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. The attempted murder of a witness charge carries a maximum potential penalty of 30 years in prison and a $250,000 fine.

New Jersey U.S. Attorney Paul J. Fishman announced the arrests.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; and IRS”“Criminal Investigation, under the direction of Acting Special Agent in Charge John R. Tafur, Newark Field Office, for their roles in the ongoing investigation.

The government is represented by Assistant U.S. Attorney Matthew T. Smith and Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.

The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

“According to the indictment, these defendants created false documents and used straw buyers to convince lenders to give them $15 million for properties that were worth far less,” said U.S. Attorney Fishman. “Members of the scheme were willing to launder money””and even to kill””in order to get their hands on the profits and cover their tracks. This case illustrates not only the seriousness of mortgage fraud, but also our focus on eliminating the criminal element from our markets to protect the health of our wider economy.”

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Mortgage Frauster Sentenced for Forging Signatures

admin —  July 19, 2012 — Leave a comment

Arthur Strasnick, 64, New Smyrna Beach, Florida, was sentenced on two counts of mail fraud and one count of identity theft.

As previously reported on Mortgage Fraud Blog, Strasnick’s fraudulent activities began in early 2003 when he lured a Saratoga Springs woman into investing money with Strasnick’s firm; Backstreet Associates, Inc. Investors in Backstreet Associates, Inc. were “guaranteed” high fixed annual rates of returns ranging from 12.0% to 20.0% interest. Strasnick’s investors were paid purported interest and principal payments, when in reality; the investors were receiving monies obtained from the same investor or other investors. 

In the fall of 2006, Strasnick also operated a mortgage fraud scheme in which he tricked other individuals, including the aforementioned Saratoga Springs woman, into providing him money representing equity in their homes. The mortgages were obtained after Strasnick either made false representations to the homeowners or forged the signatures of the actual homeowners.

United States Attorney Richard S. Hartunian and Acting Special Agent-in-Charge Toni Weirauch of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division made the announcement. 

U.S. Attorney Hartunian said that “fraudulent investment schemes such as this prey on vulnerability and hope, and can have devastating effects. With our law enforcement partners, we pursue these cases aggressively, and congratulate IRS-CI for their fine work in this case.” 

Strasnick was sentenced by the Honorable Thomas J. McAvoy in Federal District Court in Albany to 60 months of imprisonment to be followed by three years of supervised release. Strasnick was also ordered to pay $1,994,620.32 in restitution.

This case was investigated by the Internal Revenue Service.

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Four Individuals Indicted In Mortgage Fraud Scheme

admin —  July 16, 2012 — Leave a comment

Tampa, Florida – United States Attorney Robert E. O’Neill announces the unsealing of an indictment charging Jesus Sira (32), Nestor Urdaneta (29), Maria Urdaneta (32), and Vanessa Urdaneta (28) with one count of conspiracy to commit mail and wire fraud …

Click here for full article
Source: Mortgage Daily

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4 Charged with Inflating Home Prices to Obtain Kickbacks

Allison Tussey —  July 16, 2012 — 1 Comment

Jesus Sira, 32, Nestor Urdaneta, 29, Maria Urdaneta, 32, and Vanessa Urdaneta, 28, Florid,a have been indicted on one count of conspiracy to commit mail and wire fraud in relation to a mortgage fraud scheme.

According to the indictment and court proceedings, the four individuals participated in a mortgage fraud conspiracy in which some conspirators entered into agreements to purchase properties for amounts in excess of the original asking price. The conspirators then inserted false and fraudulent information about the various conspirator-purchasers on mortgage loan applications, or Fannie Mae Form 1003s, which were submitted in support of the loan requests.

Upon the closing of each sale transaction, the conspirators used a portion of the inflated loan proceeds to pay the seller the original asking price for the property. The remaining excess funds ““ the gap amount between the original asking price and the inflated mortgage loan amount ““ were then shared amongst the conspirators, who allowed the purchased properties to fall into foreclosure.

The indictment also charges eight related substantive charges. Each charge carries a maximum penalty of 20 years in federal prison. The indictment also notifies the individuals that the United States is seeking a money judgment in the amount of $1,848,750 collectively, the proceeds of the charged mortgage fraud conspiracy.

An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.

United States Attorney Robert E. O’Neill made the announcement.

This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Jay G. Trezevant.

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Mortgage Fraud Ringleader Pleads Guilty

admin —  July 13, 2012 — Leave a comment

Ronnie Edward Duke, 45, Fenton, Michigan, pleaded guilty in connection with an extensive multi-million dollar mortgage fraud conspiracy.

As previously reported on Mortgage Fraud Blog, the information charges that the defendants, led by Duke, conspired to defraud mortgage lenders and obtain money and property by means of materially false and fraudulent pretenses and representations. The scheme lasted for close to four years, ending in July 2007 when the FBI executed seven search warrants in metropolitan Detroit, Michigan and Florida.

The scheme involved obtaining “real” loans and, in many instances, “ghost” loans, from mortgage lenders. “Real” loans were closed at the offices of a legitimate title company, and the related warranty deeds and mortgages were properly recorded at county registers of deeds. However, the loan application and other related documents were materially false and fraudulent in a number of ways. The borrower described in the loan application was not the true borrower but merely a straw buyer with an acceptable credit history who was recruited to assume that role for a fee. Any down payments were paid from proceeds of the scheme rather than from the borrower’s own personal funds. Verifications of deposit, when provided, were fraudulent because the account balance disclosed to the lender was artificially inflated by a temporary transfer of funds into the account from other participants in the scheme. The income of the borrower was in most cases inflated.

The “ghost” loans were used to obtain additional funds from mortgage lenders. The home sales that the “ghost” loans were supposed to finance were nothing but sham transactions, purporting to be secured by the residential properties purchased with the “real” loans. The purchase agreements and other closing documents were counterfeit. No legitimate title companies were involved. The warranty deeds and mortgages associated with the “ghost” loans went unrecorded, leaving the lenders completely unsecured.

Over the four-year period, the scheme involved more than 500 fraudulent mortgage loans, over 100 straw buyers, and approximately 180 different residential properties in metropolitan Detroit, Michigan that were used as — or falsely represented to mortgage lenders to be — the collateral for the loans. Most of these loans went into default and foreclosure. The loans ranged in size from roughly $350,000 to $600,000. Losses to the lenders resulting from the scheme are expected to exceed $100 million.

Scheme proceeds were used by the defendants to make monthly payments on the loans to keep the scheme afloat, to make down payments on “real” loans, to pay the straw buyers and other participants in the scheme, to finance unrelated businesses, and by some defendants to purchase luxury items, to include a helicopter, cars, boats, residential properties, and for extensive travel to the Caribbean and foreign vacation destinations.

Several of Duke’s co-conspirators, including William Camsell Wells, III, 42, Howell, Michigan; Wilinevah Richardson, 34, Davison, Michigan; Ryan Andrew Zundel, 38, Brewton, Alabama; Nicole Lynn Rothe (formerly Nicole Lynn Turcheck), 33, Gibraltar, Michigan; Anthony Edward Peters, 74,  Monroe, Michigan; Donna Marie Walbrook, 50, Westland, Michigan; Harold Larsen, Jr., 46, Westland, Michigan and Hussein Abdul-Majid Bazzi,36, Inkster, Michigan previously pled guilty for their roles in this mortgage fraud conspiracy.

Duke pleaded guilty in United States District Court in Detroit before Judge Julian Abele Cook, Jr.

United States Attorney Barbara L. McQuade made the announcement. McQuade was joined in the announcement by FBI Acting Special Agent in Charge Edward Hanko of the Detroit, Michigan Division.

“Mortgage fraud harms our community because foreclosures lead to vacant homes, which lower property values and serve as havens for criminal activity,” McQuade said.

Defendant Dukeis scheduled to be sentenced by the Honorable Julian Abele Cook, Jr. on November 15, 2012. The parties’ plea agreement anticipates a custodial sentence of 10-15 years.

Defendants Richardson and Bazzi were previously sentenced to 5 and 2 years in custody, respectively.

This case has been investigated by the FBI, with the assistance of the U.S. Secret Service, and has been prosecuted by Assistant United States Attorneys Erin Shaw and Stephen Hiyama.

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LexisNexis (MARI) Releases 14th Annual Mortgage Fraud Report

Allison Tussey —  July 12, 2012 — Leave a comment

With still-high delinquency and foreclosure rates, little economic progress in depressed markets, and unscrupulous individuals taking advantage of the financially disenfranchised, 2011 was a bleak year for the mortgage industry. As industry insiders and economic analysts hope for noticeable recovery, 2011’s mortgage loan originations were at their lowest since 2001.

However, the business of home buying continues, albeit slowly and with considerable caution. Industry participants continue to try and manage through this industry volatility, while recognizing heightened oversight and consumer uncertainty.

Increased legislative and regulatory mandates like those from the Office of the Comptroller of the Currency (OCC) (a focus on 2009-10 closed loans and credentialing), the 2010 Dodd-Frank Act (overarching regulation across the financial services industry), the 2008 Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act (originator registration on National Mortgage License System & Registry (NMLS/R)), the Real Estate Settlement Procedures Act (RESPA) (new required disclosures and closing procedures), and FHA Certified Brokers (HUD transitions third party originator risk to lenders and banks) have created a tighter day-to-day reality for professionals involved in all aspects of the mortgage transaction. Such mandates, along with the newly vigilant loan industry, appear to be making a difference in one arena, as a decreased number of loan origination fraud and misrepresentation cases are being reported. However, along with these decreases are increases in potential distressed homeowner fraud and collusion schemes.

This is the LexisNexis 14th Annual Mortgage Fraud Report, formerly known as the MARI Fraud Report. These annual reports examine the current composition of residential mortgage fraud and misrepresentation involving industry professionals in the United States. (See Appendix I at the end of this report for information about the methods used to collect data on mortgage fraud.) In addition, this year we are including statistics that reveal patterns of potential mortgage industry collusion.

LexisNexis’ examination of 2011 data identified that:

– According to the FBI, a total of 93,508 mortgage-related SARS were collected in FY 2011, up almost 33 percent from FY 2010.

– For loans originated in 2011, Florida ranks third on the Mortgage Fraud Index (MFI) with an MFI of 227″”slightly over two times the rate of reported fraud and misrepresentation by industry professionals that would be expected based on the proportion of loans originated in Florida. However, Florida’s Origination MFI is the state’s lowest in the past five years.

– Five states””Florida, Michigan, California, Illinois and New York””occupy space in top ten lists for incidents of reported industry fraud and/or misrepresentation for both 2011 investigations and 2011 originations.

Mandates, along with the newly vigilant loan industry, appear to be making a difference in one arena, as a decreased number of loan origination fraud and misrepresentation cases are being reported.

However, along with these decreases are increases in potential distressed homeowner fraud and collusion schemes.

– The top Metropolitan Statistical Area (MSA) for reported loans originated in 2011 is Los Angeles-Riverside-Orange County, California. Sixteen percent of all reports received included properties in this MSA.

– Reports for loans originated in 2011 have significantly fewer cases of Appraisal fraud and misrepresentation than in previous years. At 17 percent in 2011, this type of misrepresentation is down from a high of 34 percent in 2009.

– The highest categories for all reported 2011 investigations are Application and Appraisal fraud and misrepresentation. The highest categories for reported 2011 originations are Application and Verification of Deposit (and other bank-related documentation) fraud and misrepresentation.

– According to the incident data from MIDEX submissions, there is an increase in reported incidents of potential collusion involving multiple professionals.

– Six states””Alabama, New York, Kentucky, Pennsylvania, Iowa and New Jersey””rank in two different categories on the LexisNexis Collusion Indicator Index (CII) as areas with high levels of potential non-arm’s length collusion activity.

The body of this report presents the data and analysis supporting the findings cited above. The information contained in this report is meant to provide insights into current mortgage market activities.

Data and Information Sources Used in This Case Report

For over two decades, major mortgage lenders, agencies and insurers have been submitting information describing incidents of subscriber-verified fraud and material misrepresentation to an industry-contributed database, known as MIDEX (Mortgage Industry Data Exchange), in order to share adverse experiences involving professionals operating within the mortgage industry. Contributing subscribers use information services derived from  the MIDEX database as a risk management tool to protect against mortgage fraud perpetrated by industry professionals. MIDEX enables subscribers to perform due diligence checks on mortgage professionals and companies as part of their business relationship credentialing process. LexisNexis utilizes MIDEX submissions to develop representative statistics on a wide range of mortgage fraud and misrepresentation characteristics. Findings from this analysis are presented in annual Case Reports to provide key insight into mortgage fraud trends, as reported by the industry.

In addition to MIDEX incident data, the report utilizes Home Mortgage Disclosure Act (HMDA) data sourced by the Mortgage Bankers Association (MBA), a key component used for calculating a state’s Mortgage Fraud Index (MFI) value. Please refer to Appendix II for information on the MFI and its computation.

According to the incident data from MIDEX submissions, there is an increase in reported incidents of potential collusion involving multiple  professionals.

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Cease and Desist Order Issued to Escrow Company

Allison Tussey —  July 6, 2012 — Leave a comment

All Net Escrow, a purported online escrow company engaged in timeshare escrow transactions, has been issued a cease and desist order for a scam involving the sale of time share properties.

All Net Escrow was the subject of a department consumer alert less than two weeks ago because the company claimed to be located at an Eagle, Idaho, address that actually houses an unrelated business. That business has no knowledge of All Net Escrow and became concerned after an individual came into its business inquiring about escrow services. All Net Escrow is not licensed in Idaho as an escrow company or as any other financial service provider. An Idaho “escrow company license” provided by All Net Escrow to one customer is phony.

The cease-and-desist order alleges violations of the Idaho Escrow Act by All Net Escrow for its actions purporting to operate as a licensed Idaho escrow company. The order also alleges violations of the Idaho Financial Institutions Fraud Prevention Act, which prohibits leading the public to believe you are a financial institution, such as an escrow company, for the purpose of obtaining money. As noted in the earlier alert, All Net Escrow appears to be working with a company called Castle Wealth Management, purportedly located in Oklahoma City, Oklahoma. The Idaho Department of Finance has confirmed that no business by that name is located at the Oklahoma City address used by Castle Wealth. (Please note there is a legitimate investment advisory firm located in Florida called Castle Wealth Management that has no relationship to this investigation.)

As a result of an earlier consumer alert, ten individuals from around the country who were in various stages of transactions with All Net Escrow ““ including one from Idaho — contacted the department. The information gathered from these calls provided sufficient information for the department to issue the order.

Gavin Gee, director of the Idaho Department of Finance, announced the issuance the cease-and-desist order.

“Owners of timeshare units in Mexico have been contacted by Castle Wealth claiming to have a buyer for their timeshare unit and asking if the owner is interested in selling. All Net Escrow sends account information to the owner, leading owners to believe funds have been received from a purchaser and are being held in escrow,”  Gee said. “The owner is then required to pay a ‘transfer fee’ by wiring funds equal to about 1 percent to 5 percent of the sales price to a bank in Mexico. Owners are told this fee will be refunded at the closing of the transaction.”

The department continues to urge anyone who has been contacted by either All Net Escrow or Castle Wealth Management to contact the department at 208-332-8080 or Idaho toll free at 1-888-346-3378.

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Foreclosure Rescuer Attempted to Sell Homes He Did Not Own

Allison Tussey —  July 5, 2012 — Leave a comment

Gaetano Antonell, 62, Brooksville, Florida, has been arrested and charged with organized fraud for his role in a foreclosure rescue scam.  The defendant persuaded homeowners to deed their properties to him then he would list the properties on Craigslist for sale.

On at least three separate occasions between March 23, 2012 and May 14, 2012, residents in both Hernando and Citrus counties, Florida, fell victim to someone they were supposed to be able to trust. Antonelli identified himself to one set of his victims as someone who could rescue them from foreclosure and to the other set of his victims as a home seller, by advertising properties for sale on Craigslist.

With the financial pressure on and foreclosure proceedings looming over-head, Antonelli deceived his victims in many ways. Antonelli‘s scheme involved deceiving his victims into signing the deed to their property over to him via a Power of Attorney so he could rescue them from their mortgage. Once Antonelli fraudulently obtained the deed to the property, he would run an ad on Craigslist, attempting to sell the property that did not belong to him despite the fact that the property is not legally his due to the active foreclosure/Lis Pendens being filed. His victims soon became suspicious and reported the activity to authorities.

On June, 7, 2012, Antonelli was interviewed by detectives. He advised that “mortgages are not legally binding contracts and that mortgages are a “scam” backed by the Federal Government”.

On June 27, 2012, Antonelli was arrested at his residence and charged with Organized Fraud (less than $20,000).

Detectives believe that there may be other victims that have yet to be identified. If you believe you or someone you know may be a victim of this fraudulent activity, please contact the Hernando County Sheriff’s Office at 352-754-6830.

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Loan Officer Sent to Prison for Defrauding Lenders

Allison Tussey —  June 27, 2012 — Leave a comment

Alejandro aka “Alex” Curbelo, 32, Miami, Florida, a loan officer for a Florida mortgage company, was sentenced in Miami to 54 months in prison for his role in a mortgage fraud scheme.

The defendant was sentenced before U.S. District Judge Joan Lenard. In addition to his prison term, Curbelo was sentenced to three years of supervised release and was ordered to pay $9.2 million in restitution to HUD. Curbelo was indicted and arrested on Jan. 24, 2012, and pleaded guilty on April 16, 2012, to one count of conspiracy to commit wire fraud.

As previously reported by Mortgage Fraud Blog, from approximately February 2006 through July 2008, Curbelo was employed as a loan officer for Great Country Mortgage Bankers. In this role, he assisted in the sales and financing of condominium units at two complexes in Florida ““ Dadeland Place and Pelican Cove on the Bay. The borrowers who Curbelo assisted at these two complexes were unqualified to obtain mortgage loans due to insufficient income, high levels of debts and outstanding collections.

Curbelo admitted that he conspired with others to create and submit false and fraudulent Federal Housing Administration (FHA) mortgage loan applications and accompanying documents to the lender on behalf of the unqualified borrowers. Curbelo and others offered the borrowers cash back after closing as an incentive for them to purchase the units. These payments were not disclosed properly during the loan application process.

According to court documents, the closing costs were paid on behalf of the borrowers by interstate wire. After the loans closed, the unqualified borrowers failed to meet their monthly mortgage obligations and defaulted on their loans.

According to court documents, when the loans went into foreclosure, HUD, which insured the loans, was required to take title to the units and pay the outstanding loan balances to the lenders. As of the date of the sentencing hearing, HUD paid more than $9.2 million for losses related to Curbelo‘s conduct.

U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, and Department of Housing and Urban Development (HUD) Inspector General David A. Montoya announced the sentence.

This case was investigated by the HUD Office of Inspector General, as participants in the Miami Mortgage Fraud Strike Force. Trial Attorney Mary Ann McCarthy of the Fraud Section in the Justice Department’s Criminal Division is prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.

This prosecution is part of efforts under way by the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

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