According to court documents, the orchestrator of the mortgage fraud scheme was Juan Carlos Gonzalez, who previously pleaded guilty and was sentenced to seven years in prison. Gonzalez entered into contracts to buy residential real estate properties …Guilty plea from Jacksonville title agent in mortgage fraud scheme Florida Times-Unionall 4 news articles »
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Source: WJXT Jacksonville
In Florida, many were committing fraud. For the past two years, the state has led the nation by far in mortgage fraud and has been at or near the top in many prior years. Florida accounted for more than 27 percent of all home loans nationally that were …and more »
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Source: MiamiHerald.com
Four men have been charged in a mortgage modification scam in which they guaranteed modifications to thousands of homeowners through the federal Home Affordable Modification Program (HAMP) and allegedly collected illegal fees up front, …Florida firm charged with running HAMP scam Housing Wireall 17 news articles »
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Source: Housing Predictor
Dunwell Financial Services, LLC – Jersey City, New Jersey; Home Mitigation Group, Matawan, New Jersey; Loss Mitigation Consultant Services, Paulsboro, New Jersey; Rose MM, LLC, Newark, New Jersey; Save Americas Mortgages Corp., Fort Lee, New Jersey; TWI Corp., Winter Garden, Florida; and Continental Associates, Ltd., Commack, New York, are the subject of administrative actions filed for illegally offering mortgage modification services to homeowners in dire financial straits.
Continuing the State’s on-going efforts to thwart fraudulent “mortgage loan modification” enterprises, Attorney General Paula T. Dow and the State Division of Consumer Affairs filed administrative actions against seven businesses for illegally offering mortgage modification services to homeowners in dire financial straits. State law requires that anyone providing these services in New Jersey be licensed as a Debt Adjuster by the Department of Banking and Insurance, or be otherwise authorized.
The Division of Consumer Affairs filed Notices of Violation against the illegitimate businesses, which offered mortgage loan modification services even though they were not licensed to do so in New Jersey. The State is seeking $35,000 in civil penalties and $49,434 in consumer restitution from the companies. The amounts sought in consumer restitution represent the fees paid by approximately 10 consumers for mortgage loan modification services.
The Notices of Violation also provide that the companies, cited for violating the state’s Consumer Fraud Act and Debt Adjustment and Credit Counseling Act, must cease and desist from offering debt adjustment services. The companies have the option of contesting the Notice of Violation and requesting a hearing.
“We do not want homeowners who are already struggling to make mortgage payments victimized by unlicensed persons offering services that they cannot lawfully provide,” Attorney General Dow said. “Unlicensed companies most often make a difficult situation worse for homeowners, and we will continue to go after these firms.”
Thomas R. Calcagni, Director of the State Division of Consumer Affairs, said that the violations were filed as part of the Division’s ongoing initiative to crack down on mortgage modification businesses operating outside the law.
“Since the Division began this initiative earlier this year, we have taken action against 18 unlawful mortgage modification outfits,” said Calcagni. “So long as illegal mortgage modification businesses continue to ignore our laws and take advantage of financially-strapped New Jersey homeowners, we will continue to hold those businesses and their principals accountable. Our aggressive enforcement of these illegal enterprises continues.”
Calcagni noted that the Division of Consumer Affairs created its Financial Fraud Unit, within its newly reorganized Office of Consumer Protection, specifically to focus on mortgage-related frauds that prey on the hopes and fears of homeowners struggling amid financial hardship, and desperate to keep their homes. In March 2011, the Financial Fraud Unit filed Notices of Violation against 11 fraudulent mortgage loan modification providers, seeking a total of $126,000 in consumer restitution and $55,000 in civil penalties (see the March 9 press release, www.NJConsumerAffairs.gov/press/ncpw_mortgage.htm).
In the past year, the Division has recovered more than $2.2 million in actual restitution dollars for desperate New Jersey homeowners who had been victimized by predatory mortgage practices and mortgage-related scams.
The seven companies served with a Notice of Violation are:
A mortgage loan modification involves changing the terms of an existing loan ““ for example, by lowering the monthly payments, adjusting the interest rate, extending the length of the loan, or in some cases decreasing the unpaid balance.
The only types of business that can engage in mortgage loan modification services in New Jersey are:
The Department of Banking and Insurance provides a complete listing of all licensed Debt Adjusters in New Jersey at www.state.nj.us/dobi/division_consumers/finance/counselors.html
To help consumers learn about more about avoiding mortgage-related scams, and how to obtain genuine assistance, the Division of Consumer Affairs has written a consumer brief that can be viewed at www.NJConsumerAffairs.gov/brief/mortgage.pdf .
Investigator Kevin Noland, of the Mortgage/Financial Fraud Unit within the Division’s Office of Consumer Protection conducted the investigations of these companies. Deputy Attorney General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section, provided legal counsel.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
The FBI on Thursday busted up a $58 million mortgage fraud operation based in Long Island that involved more than 100 properties in New York and Florida that were either in default or had been foreclosed upon. Authorities charged 14 people, …EXCLUSIVE: 14 Charged in $60 Million Mortgage Fraud Scheme Fox NewsReal Estate Woes: Five Lawyers Charged In $58M Mortgage Fraud Scheme Wall Street Journal (blog)Feds: 14 Busted in $58M Long Island Mortgage Scam Long Island Press Long Island Business News - Patch.com - New York Law Journalall 32 news articles »
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Source: Portfolio.com (blog)
Twenty-seven South Florida residents were indicted on charges related to a series of mortgage fraud schemes after being arrested by the US Mortgage Fraud Strike Force. The busts produced by the special task force now account for more …
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Source: Housing Predictor
27 South Florida residents have been indicted on charges stemming from their participation in a series of mortgage fraud schemes that resulted in more than $30 million in fraudulent loans.
The cases charge individuals at all levels of the mortgage process, including an attorney, real estate agents, mortgage brokers, loan processors, title agents, and straw buyers. One case even charges three defendants with committing arson in order to get out of an existing mortgage.
1. United States v. Luis A. Oramas, et al.
On August 2, 2011, seventeen (17) defendants were charged in a forty-count indictment for their alleged participation in a scheme that resulted in approximately $20 million in fraudulent mortgage loans. Charged in the indictment were defendants Luis A. Oramas, 43, Miami; Keskea Hernandez-Frei, 40, Miramar; Mariela Hernandez, 46, Miami; Elayne Gutierrez, 32, Miami; Ana Taveras, 33, North Miami Beach; Joaquin Gomez, 45, Hialeah; Manuel Valdes, 49, Miami; Yudith Padilla, 38, Hialeah; Ivan Padilla, 46, Hialeah; Martha Fernandez, 43, Hialeah; Maribel Diarth, 50, Miami; Carlos Sanchez, 40, Miami Lakes; Ivett Lorenzo, 42, Miami; Guillermo Rivero, 42, Miami; Napoleon Cadalzo, 41, Hialeah; Hisamara Esponda, 30, Hialeah Gardens; and Rafael Bonne, 61, Miami.
According to the Indictment, from 2006 through 2008, defendants Luis A. Oramas, Keskea Hernandez-Frei, Mariela Hernandez, Elayne Gutierrez, Ana Taveras Joaquin Gomez, and Manuel Valdes identified residential properties in Miami-Dade County that were for sale and then recruited and paid individuals to act as straw buyers of the properties. Thereafter, defendant Hernandez-Frei used her companies, Kasa Mortgage (Kasa), a mortgage brokerage firm, and New Line Realty (New Line), a real estate company, to conduct most of the transactions.
The indictment alleges that defendant Hernandez worked at Kasa as a loan processor, and defendant Ana Taveras worked as a real estate agent for New Line. Through Kasa and New Line, Hernandez-Frei, Mariela Hernandez, and Taveras, prepared fraudulent sales contracts and mortgage and home equity line-of-credit loan applications on behalf of complicit straw borrowers. The documents contained false information, including inflated sales prices, false employment verifications and pay stubs, false statements about income and funds on deposit, and bogus cash-to-close checks. Defendants Yudith Padilla, Ivan Padilla, Martha Fernandez, Maribel Diarth, Carlos Sanchez, Ivett Lorenzo, Guillermo Rivero, Napoleon Cadalzo, Hisamara Esponda, and Rafael Bonne, all acted as straw borrowers. In some instances, defendants Mariela Hernandez, Taveras, and Valdes also acted as straw borrowers.
According to the indictment, the defendants used various methods to execute their scheme. In one method, commonly referred to as a “double-HUD” scheme, the defendants created and submitted to the lending institutions false duplicate HUD-Settlement Statements, which grossly inflated the true purchase price of the properties. At other times, the defendants obtained multiple fraudulent mortgage loans from different lenders for the same piece of property.
Once the mortgage applications were approved, the lenders wired the loan proceeds to title agents, such as defendant Elayne Gutierrez, for closing. At closing, defendant Gutierrez often sent the difference between the inflated mortgage loan proceeds and the actual selling price directly to Oramas, who then disbursed kickback payments to straw borrowers and other participants in the scheme. To perpetuate the scheme and avoid detection, the defendants failed to record or falsely recorded mortgage deeds and other mortgage documents with the State of Florida. In a further attempt to perpetuate the fraud, the defendants would make payments on the loans until the properties could be resold, often to another straw borrower, repeating the cycle of fraud. Eventually, the defendants stopped making payment on the loans and the properties went into foreclosure, often resulting in substantial losses to the lending institutions.
The indictment charges the defendants with conspiracy to commit mail and wire fraud, and substantive mail fraud and wire fraud. If convicted, the defendants face a statutory maximum term of imprisonment of 20 years’ on the conspiracy to commit mail and wire fraud and substantive mail fraud charges and 20 years’ imprisonment on the wire fraud charges.
The case is being prosecuted by Assistant U.S. Attorney Sean T. McLaughlin.
2. United States v. Ghaith Al Nahar, et. al.
On July 28, 2011, six (6) defendants were charged in a six-count indictment for their participation in a nine-month mortgage fraud scheme that resulted in approximately $9,200,000 in fraudulent loans. Charged in the indictment were Ghaith Al Nahar, 40, formerly of Boynton Beach; Michelle Austin Wilks, 38, Parkland; Romy Defay, 28, West Palm Beach; Lucien Laguerre, 37, Lauderhill; Jeffery Gilbert, 53, Miramar; and Philip Jay Newman, 58, Miami.
According to the indictment, from February to November 2007, Ghaith Al Nahar operated Best Decisions Home Mortgage, Inc., located in Lake Worth, Florida. Al Nahar and Romy Defay identified residential properties in Palm Beach County that were for sale and then allegedly recruited and paid individuals to act as straw buyers of the properties. The straw buyers included defendants Lucien Laguerre, Jeffery Gilbert and Philip Jay Newman. To execute the scheme, Al Nahar and Defay submitted loan applications and supporting documents containing false information to various mortgage lenders across the United States. Based on these false statements and documents, the mortgage lenders issued more than $9 million in loans.
After the lenders approved the fraudulent loans, Michelle Austin-Wilks, a title agent, prepared false HUD-1 Settlement Statements which, among other things, falsely represented to the lenders that the straw buyers were bringing their own money to closing. Austin-Wilks also falsely represented to the lenders that she had disbursed the loan proceeds in accordance with the lenders’ instructions. Instead, Austin-Wilks made unauthorized disbursements from the loan proceeds to one of her companies as “processing fees.”
The indictment charges the defendants with conspiracy to commit wire fraud, and substantive wire fraud. If convicted, the defendants face a maximum statutory sentence of 20 years’ imprisonment on each count.
The case is being prosecuted by Assistant U.S. Attorney Armando Rosquete.
3. United States v. Gerardo Wilhelm, Juan J. Flores, and Alejandro Figueredo
On July 26, 2011, three (3) defendants were charged in an eight-count indictment for their participation in an arson, mortgage fraud, and insurance fraud scheme that resulted in losses of more than $500,000. Charged in the indictment were Gerardo Wilhelm, 38, Miami; Juan J. Flores, 39, Ocala; and Alejandro Figueredo, 30, Miami.
According to the indictment, Wilhelm, a real estate agent, Flores, a mortgage broker, and Figueredo, an insurance adjuster, engaged in a string of federal crimes involving a townhouse located in Miami-Dade County. In early 2006, defendant Wilhelm obtained mortgage loans to purchase the property by misrepresenting his and his wife’s employment and falsely stating that they intended use of the property as their primary residence Wilhelm then rented the townhouse until it no longer generated income. In late 2007, after foreclosure proceedings were initiated against him, Wilhelm hired defendants Flores and Figueredo to burn down the townhouse. After the fire, defendant Wilhelm submitted a fraudulent insurance claim for the fire damage, and received approximately $180,000 in insurance proceeds, made payable to the lender. However, defendant Wilhelm forged the endorsement on the insurance check and kept the money.
After misappropriating the insurance money, Wilhelm allegedly obtained a loan modification, in the form of a short sale, from the defrauded lender that held the mortgage loans on the townhouse. In carrying out this short sale, Wilhelm hired a straw buyer to purchase the property. After the sale was completed, the straw buyer transferred title to the townhouse to a company Wilhelm controlled. Thereafter, Wilhelm and his accomplices sold the townhouse for $240,000, resulting in a $500,000 loss to the financial institutions.
The defendants were charged with conspiracy to commit arson and arson. Wilhelm was also charged with two counts of conspiracy to commit mail fraud, three counts of substantive mail fraud, and one count of check fraud. If convicted, the defendants face a maximum statutory sentence of 20 years’ imprisonment on the conspiracy to commit mail fraud and substantive mail fraud charges, and 20 years’ imprisonment on the conspiracy to commit arson and substantive arson charges.
The case is being prosecuted by Assistant U.S. Attorney Roger Cruz.
4. United States v. David A. Donet, Sr.
On August 1, 2011, David A. Donet, Sr., 63, Miami, was charged in a Criminal Information for his involvement in the misappropriation of mortgage loan proceeds and other client funds. According to the Information, Donet, an attorney who handled real estate closings and other matters, caused various lenders and others to disburse loan proceeds and other funds into his attorney trust account. Instead of disbursing the funds appropriately, however, Donet improperly deposited the money into his law firm’s business account and then misappropriated the funds.
The defendant was charged with eight substantive counts of mail and wire fraud. If convicted, Donet faces a maximum possible sentence of 20 years’ imprisonment as to each count.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael K. Fithen, Special Agent in Charge, U.S. Secret Service (USSS), Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James K. Loftus, Director, Miami-Dade Police Department (MDPD), along with members of the Federal-State Mortgage Fraud Strike Force (Mortgage Fraud Strike Force), announced the indictments.
The cases are the result of the cooperative law enforcement efforts of the members of the Mortgage Fraud Strike Force. Created in June 2008 and led by the U.S. Attorney’s Office, the Mortgage Fraud Strike Force brings together federal, state and local law enforcement to combat the mortgage fraud epidemic in South Florida. Members of the Mortgage Fraud Strike Force include experienced prosecutors, federal agents, and state and local officers, dedicated exclusively to investigating and prosecuting mortgage fraud cases. The Mortgage Fraud Strike Force has yielded substantial results. Since September 2007, following the creation of the District’s first Mortgage Fraud Initiative, more than 500 individuals have been charged for their involvement in mortgage fraud schemes that have resulted or were intended to result in more than $620 million in mortgage loans.
U.S. Attorney Wifredo A. Ferrer Stated, “Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital. As these cases illustrate, mortgage fraud has permeated every level of the industry, from straw buyers, to loan processors, to title agents and even attorneys. Mortgage fraud also leads to other crimes, including identity theft and, as we see today, even more violent crimes, like arson. The success of the Federal-State Mortgage Fraud Strike Force in our crack-down on mortgage fraud is evident in the staggering number of prosecutions we have brought to date. Still, the battle against mortgage fraud is far from over and we will continue to prosecute these cases up and down the fraud ladder.”
Michael K. Fithen, Special Agent in Charge of the Miami Field Office of the U.S. Secret Service, stated, “Today’s charges highlight the prolific nature of mortgage fraud, as seen through the actions of real estate and mortgage industry professionals whose fraudulent conduct taints and undermines the dream of home ownership. The U.S. Secret Service is proud to be involved in the successful investigation and prosecution of these types of fraud through continued partnership with the U.S. Attorney’s Office, the Miami-Dade Police Department, and the members of the Mortgage Fraud Strike Force.”
“Criminals are always looking for new ways to exploit vulnerabilities and devising new methods to defraud. Accordingly, we are always adapting our investigative techniques to combat mortgage fraud,” said John V. Gillies, Special Agent in Charge of the FBI’s Miami Field Office. “To this end, we have established task forces in both West Palm Beach and Miami and are also participating in the U.S. Attorney’s Office Mortgage Fraud Strike Force. Mortgage fraud remains pervasive and the FBI will stay focused on the industry insiders who are committing mortgage fraud for profit.”
Hugo J. Barrera, Special Agent in Charge of ATF’s Miami Office, stated, “I wish to thank all of the men and women from ATF along with our partners from the Miami-Dade Police Department and the U.S. Attorney’s Office for their dedication and hard work in bringing these criminals to justice. Arson is a crime of violence. It exposes the public and our first responders to unimaginable dangers. Individuals who use fire to destroy property and commit mortgage fraud are just as dangerous as those who use guns to commit crimes.”
“We have a continued commitment to work with our federal partners in investigating and prosecuting mortgage fraud in Miami-Dade County. Our agencies have been working very hard together and I am pleased that their hard work continues to result in positive outcomes for our community,” said Director James K. Loftus of the Miami-Dade Police Department.
Mr. Ferrer commended the investigative efforts of the Federal State Mortgage Fraud Strike Force, with special commendation to Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Karen Rochlin.
The cases announced today are also part of the Department of Justice’s Financial Fraud Enforcement Task Force. This national task force was established in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Mortgage fraud is a key focus of the Financial Fraud Enforcement Task Force’s efforts. 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.
Michael R. Rouse, 56, formerly of Wellington, Florida, was sentenced, in absentia, by U.S. District Judge Barbara M G. Lynn to 210 months in federal prison and ordered to pay $1.9 million in restitution to the 62 identified victims of his crime.
Rouse was convicted at trial in April 2011, on all nine counts of a superseding indictment charging various felony offenses related to his operation of the Golden Gate Real Estate Investment Trust (REIT). Rouse is a fugitive, and on the record, Judge Lynn established that he had received notice of the sentencing, and that his absence was voluntary. Rule 43(c)(1)(B) of the Federal Rules of Criminal Procedure provides that a defendant in a noncapital case waives his right to be present is he is voluntarily absent from sentencing.
Rouse was convicted of one count of conspiracy to commit securities fraud, mail fraud and money laundering; two counts of securities fraud and aiding and abetting; five counts of mail fraud; and one count of money laundering. The government presented evidence that, during 2003 and 2004, Rouse and convicted co-conspirator James A. Testa, 61, Carrollton, Texas, were founders and trustees of the Golden Gate REIT. During that period, Rouse and Testa, acting personally and through brokers, raised more than $2 million from investors by claiming that the REIT was a safe investment in real estate and real estate related assets. In fact, virtually none of the money was ever invested in anything connected with real estate. The only investments Rouse and Testa ever made were in foreign currency trading, and those investments failed completely.
The investors lost most or all of their money, while Testa and Rouse paid themselves handsome salaries and spent the investors’ funds on business and personal expenses, including Mercedes Benz automobiles that cost more than $125,000 each. Testa, who testified for the government at trial, pleaded guilty to one count of money laundering in 2009; he is scheduled to be sentenced on August 26, 2011.
U.S. Attorney James T. Jacks of the Northern District of Texas announced the sentence.
The interagency Financial Fraud Enforcement Task Force was established by the President to lead 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. For more information on the task force, visit StopFraud.gov.
The Financial Fraud Enforcement Task Force in the Northern District of Texas includes representatives from the FBI, U.S. Postal Inspection Service, IRS-Criminal Investigation, U.S. Secret Service, U.S. Securities and Exchange Commission (SEC), Texas State Securities Board, Texas Attorney General, FDIC Office of Inspector General, Commodity Futures Trading Commission, Federal Reserve Board of Governors, Office of Thrift Supervision, Comptroller of the Currency, Financial Industry Regulator Authority, and National Futures Association.
The case was investigated by IRS-Criminal Investigation and the Texas State Securities Board. Assistant U.S. Attorney Alan M. Buie and Special Assistant U.S. Attorney Suzanne M. Steinmetz prosecuted.
Christian Tudorof, 43, Stamford, Connecticut, waived his right to indictment and pleaded guilty before United States Magistrate Judge Joan G. Margolis in New Haven to one count of wire fraud stemming from a $4 million mortgage fraud scheme.
According to court documents and statements made in court, between December 2006 and March 2007, Tudorof submitted mortgage applications to a number of different mortgage lenders in association with the purchase of residential properties in Florida, Arizona and Connecticut. In many of the mortgage applications, Tudorof provided false information and failed to disclose information to the mortgage lender. For example, after Tudorof obtained one mortgage to purchase a home in Florida, he deliberately failed to disclose the existence of this mortgage when he applied for mortgages on the other properties purchased in his name. He also falsely represented in the mortgage applications that he intended to live in some of the homes that he intended to purchase when, in fact, he had no intention of occupying these homes.
Through this scheme, Tudorof obtained more than $4 million in mortgages from mortgage lenders and purchased at least six properties. After he failed to service the mortgages, each of the homes he purchased was sold in foreclosure. As a result, the mortgage lenders suffered losses of more than $2 million.
Tudorof is scheduled to be sentenced by United States District Judge Janet Bond Arterton on October 4, 2011, at which time Tudorof faces a maximum term of imprisonment of 20 years and a fine of up to approximately $4 million.
This matter was investigated by the Federal Bureau of Investigation and is being prosecuted by Senior Litigation Counsel Richard J. Schechter.
David B. Fein, United States Attorney for the District of Connecticut, announced the guilty plea.
In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force is focusing on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to ctmortgagefraud@ic.fbi.gov.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
Lorn Leitman, 61, Miami, Florida, an attorney and C.P.A., was sentenced by a federal district court judge to 210 months’ incarceration for his role in a 10-year Ponzi scheme. In an unusual decision, the court departed upward from a sentencing guideline range of 121-151 months, commenting that, “this case is exceptional.”
A federal grand jury charged the defendant with violating the mail fraud statute for defrauding elderly victims and retirees, among others, through the operation of a Ponzi scheme which sought investments in either phantom residential mortgages or a separate venture burdening U.S. military personnel with predatory and usurious loans. The defendant pled guilty to one count of mail fraud on April 6, 2011 and faced a maximum possible sentence of imprisonment for 20 years. Several victims appeared in court to address the impact of the fraud. As one victim explained, losses from the Ponzi scheme forced the end of his retirement and his return to work. He commented, “my dreams are dead.”
The court explained that the decision to sentence above the guidelines resulted from the defendant’s conduct preying upon his closest friends, fellow servicemen, the elderly and retirees, and noted that the defendant breached codes of conduct applicable to members of the Florida Bar and certified public accountants. In addition to the enhanced sentence, the court ordered the defendant to pay $3,308,435.03 in restitution to victims.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the sentence.
Mr. Ferrer commended the investigative efforts of the FBI as well as Assistant U.S. Attorneys Karen Rochlin and H. Ron Davidson, who prosecuted the case.
