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Man Charged With Real Estate Fraud

Allison Tussey —  July 24, 2009 — Leave a comment

Douglas Lee Carter, 63, Marco Island, Florida, who posed as a billionaire and a real estate tycoon, was arrested on a felony warrant charging him with scheming to defraud three people in separate real estate deals in Collier County, Florida. According to media reports, Carter was “behind many real estate deals on Marco Island that prompted a 2007 indictment involving 31 people – homeowners, mortgage companies, appraisers, real estate agents, bankers and “straw buyers” – who would artificially inflate home prices and then pocket the difference. Many of the homes went into foreclosure.”  Carter was already being held in the jail on $30,000 bond stemming from a prior arrest on unrelated worthless check charges when deputies served him with the warrant.

A judge set Carter‘s bond at $150,000 on the new charges during a court hearing, bringing his total bonds to $180,000, detectives said.

The latest charges against Carter stem from a scheme spanning from Dec. 5, 2005, to May 15, 2008. They said Carter purchased six homes in Collier, Florida from the three victims. Using the down real estate market as leverage, detectives say Carter asked the victims to provide him with cash at closing to finance other deals. In exchange for their money, he issued them second and third mortgages. Carter told them he needed the money to purchase other properties and they would be earning interest on their money. Carter took the proceeds, but never paid the victims, detectives said. The only attempts to pay the victims were with worthless checks. Detectives said he issued $680,000 in worthless checks to the victims.

Further investigation by detectives revealed that Carter did not have the funds to cover the checks.

The Collier County Sherriff announced the recent charges.

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Real Estate Investor Indicted and 2 Guilty Pleas in Separate Mortgage Fraud Schemes

admin —  July 16, 2009 — 2 Comments

Reginald Davis, 41, West Palm Beach, Florida, and formerly of Dallas, has pled guilty to conspiracy to commit mail fraud and wire fraud before U.S. Magistrate Judge Don D. Bush.

According to information presented in court, Davis admitted he conspired with another individual, identified as a real estate investor, to make false statements in mortgage loan applications in order to obtain mortgage loans for Davis to purchase two residential properties in Collin and Dallas counties. Prosecutors allege that both Davis and the real estate investor benefitted from the proceeds of the two mortgage loans, valued at $895,000.00, Davis was indicted by a federal grand jury on Apr. 6, 2009.

In a separate case, Jeanelle Richardson, 37, Plano, Texas, pleaded guilty to conspiring with an individual to commit mail fraud and wire fraud in connection with a similar mortgage fraud scheme.

Richardson admitted to conspiring with a real estate investor to commit mail fraud and wire fraud in connection with a similar mortgage fraud scheme. Richardson admitted that she and the real estate investor conspired to make false statements in mortgage fraud applications in order for Richardson to purchase three residential properties in Dallas and Collin counties valued at over $1.8 million. Both Richardson and the real estate investor benefited from the proceeds of the mortgages. Richardson was indicted by a federal grand jury on Apr. 6, 2009.

In both Davis’ and Richardson’s cases, prosecutors allege the false statements included such things as overstated employment income on the part of the borrowers and representations that the borrowers intended to occupy each home as their primary residence.

Richardson and Davis each face up to five years in federal prison at sentencing. Sentencing dates have not yet been set.

Micaiah Pruitt, 42, of Dallas, Texas, was indicted in a separate case on June 11, 2009, and charged with conspiracy to commit mail fraud and wire fraud, mail fraud and wire fraud, and money laundering with his connection to the schemes involving Davis and Richardson.

Prosecutors allege in the indictment that Pruitt is actually the real estate investor whom conspired with Davis and Richardson in their unrelated mortgage fraud cases. Pruitt entered a not guilty plea on June 26, 2009, before Judge Bush and is currently set for a pre-trial conference on Aug. 3, 2009, before U.S. District Judge Richard A. Schell. If convicted, Pruitt faces up to 150 years in federal prison and a fine of up to $2 million. It is important to note that a grand jury indictment is merely a charge, and not evidence of guilt.

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Mortgage Broker Extradited from Jamaica to Face Fraud Charges

admin —  May 25, 2009 — Leave a comment

Yvette Scott Patterson, who was recently ordered extradited from Jamaica to face federal mortgage fraud charges in the Southern District of Florida, has had an initial appearance in federal court in Fort Lauderdale. U.S. Magistrate Judge Barry Seltzer scheduled a pre-trial detention hearing for defendant Patterson for Friday, May 22, 2009, at 10:00 AM.

As previously reported on mortgage fraud blog, Patterson fled the U.S. in early 2006 after being arrested and released on bond on unrelated state charges. Patterson was subsequently indicted by a federal grand jury on November 7, 2006, on mortgage fraud charges in “Operation Whose House.” Yvette Scott Patterson had been detained in Kingston, Jamaica, since her arrest on March 8, 2008, pending extradition to the U.S. on the 2006 fraud charges.

The 2006 Indictment charged Yvette Scott Patterson and others with conspiracy to commit mail fraud, wire fraud, and identity fraud in connection with a mortgage fraud scheme to obtain mortgages based on fraud for the purchase of residential properties in Broward County, Florida. The fraud involved more $10,000,000 in mortgages. Through her company, Khadmilroy, Inc., in Sunrise, Florida, Patterson is alleged to have submitted fraudulent mortgage applications and false documentation to lenders throughout the U.S., using straw buyers and the stolen identities of unwitting victims.

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Attorney Sentenced For Fraudulent Real Estate Closings

Allison Tussey —  May 12, 2009 — 1 Comment

John A. Yanchek, 49, Sarasota, Florida, was sentenced by United States District Judge James D. Whittemore to five years in federal prison for a conspiracy to commit loan fraud, bank fraud, and money laundering. The court also ordered Yanchek to forfeit $7.6 million. Yanchek had pleaded guilty on February 4, 2009.

According to court documents, Yanchek was a licensed Florida attorney who did business as the law firm of John A. Yanchek, P.A., in Sarasota, Florida. Yanchek represented G & T Land Development LLC and Steeplechase Properties LLC, legal entities owned and/or controlled by his co-conspirators, that purchased and developed commercial real estate in the Sarasota area. Yanchek also functioned as a closing agent.

According to the plea agreement, Yanchek entered into a conspiracy to make false statements to federally-insured banks in connection with applications for commercial loans used to purchase vacant land in the Sarasota/Manatee, Florida area for development. The object of the conspiracy was to obtain enough loan money to allow the conspirators to purchase the property without contributing any equity of their own and to receive excess loan proceeds for their personal use. Yanchek, as the closing attorney for the loans, made false statements to the banks regarding the financial resources of the borrower, the amount and source of equity contributed by the borrower, compliance with the seller’s obligation to provide marketable title to the property, and distribution of the loan proceeds.

Yanchek cooperated with the government and testified at the jury trial of his codefendant, Larry P. Nardelli, who was convicted on February 19, 2009 and is awaiting sentencing.

Yanchek‘s co-defendant Michael A. Tringali also has pleaded guilty and has cooperated with the government. Tringali received a 41-month sentence. Yanchek‘s co-defendant Neil M. Husani remains a fugitive.

United States Attorney A. Brian Albritton made the announcement. This investigation was conducted jointly by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. This case was prosecuted by Assistant United States Attorneys Terry A. Zitek and Adelaide Few.

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Commerical Land Developer Sentenced

admin —  April 20, 2009 — Leave a comment

Michael A. Tringali has been sentenced to 41 months in federal prison for conspiracy to commit loan fraud, bank fraud, and money laundering. A forfeiture judgement in the amount of $6,925,522 was ordered by Judge Whittemore. Restitution will be determined in a future hearing. As previously reported on Mortgage Fraud Blog, Tringali had pleaded guilty on November 3, 2008.

According to court documents, Tringali was the owner and principal officer of G & T Land Development LLC and Steeplechase Properties LLC, which entities purchased and developed commercial real estate in the Sarasota, Florida, area. Tringali was also a part owner of Sarasota Grand Central LLC. Tringali willfully and knowingly entered into an unlawful agreement with other individuals to make false statements to financial institutions in the Tampa/Sarasota area in connection with commercial loans applied for and/or obtained to acquire and develop vacant land.

This case was investigated by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Terry A. Zitek and Adelaide Few.

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Woman Convicted for Submitting Fake W2

Allison Tussey —  March 23, 2009 — Leave a comment

Martha Aleman was found guilty by a Miami, Florida jury on a three count indictment, first returned in 1993, charging her with conspiracy to commit bank fraud; bank fraud; and making false statements to a federally insured lending institution. Sentencing is scheduled before U.S. District Judge Adalberto Jordan for June 9, 2009.

According to the evidence presented during trial, from approximately February 6 to March 12, 1990, Martha Aleman and previously convicted co-defendant, Santiago Luis Casamayor, completed and submitted a loan application to Citi Bank for the purchase of a residential dwelling located in the Westchester neighborhood of Miami. The defendants submitted a false W-2, and other earnings-related asset information, to Citi Bank. Based on this false information, Citi Bank issued a first mortgage loan on the property. After execution of a search warrant on the property in 1992, the fraudulent loan documents were discovered. Martha Aleman left the United States for Nicaragua after being interviewed by the FBI, but prior to her indictment on February 16, 1993. Aleman was arrested in 2008 when she attempted to enter the United States.

R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, made the announcement.

Mr. Acosta commended the investigative efforts of the FBI. This case was prosecuted by Assistant United States Attorney Norman O. Hemming, III.

 

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Mortgage Fraud at an All-Time High According To MARI

Allison Tussey —  March 16, 2009 — 2 Comments

Incidents of mortgage fraud increased 26% from 2007 to 2008.  Rhode Island, Florida and Illinois top the list of states with highest mortgage fraud rates.

Reported incidents of mortgage fraud in the U.S. are at an all-time high and increased by 26 percent from 2007 to 2008 according to a new report released today by the Mortgage Asset Research Institute (MARI®), a LexisNexis® service. The 11th Periodic Mortgage Fraud Case Report to the Mortgage Banker’s Association (MBA) examines the current state of residential mortgage fraud and misrepresentation in the U.S. based on data submitted by MARI subscribers.

The report found that, for the first time, Rhode Island ranked first in the country for mortgage fraud with more than three times the expected amount of reported mortgage fraud for its origination volume. This is also Rhode Island’s first appearance on the MARI report Top-Ten list, indicating a problematic and overlooked mortgage fraud problem in the state. Florida, ranked first in 2007 and 2006, dropped to second place and is followed by Illinois, Georgia, Maryland, New York, Michigan, California, Missouri and Colorado. The report was presented during MBA’s annual National Fraud Issues Conference in Las Vegas. It is available on the MARI Web site at: www.marisolutions.com.

“With fewer loan originations today, the data suggests that the economic downturn may have created more desperation, causing more people than ever before to try to commit mortgage fraud,” said Denise James, LexisNexis Risk & Information Analytics Group director of Residential Mortgage Solutions. “Not only are we seeing traditional fraud trends, such as application fraud, but we are also seeing new types of emerging fraud occur,” said James. “It is therefore imperative that the mortgage industry continue to share information and insights, and collaborate in the fight against mortgage fraud.”

The top fraud incident type in 2008 – representing 61% of all reported frauds – was application fraud, the fifth year in a row it topped the list. Second were frauds related to tax returns and financial statements which jumped 60% from 17% of reported frauds in 2007, to 28% of reported frauds in 2008. Additional documented fraud types included, in order of volume, frauds related to appraisals or valuations, verifications of deposit, verifications of employment, escrow or closing costs, and credit reports.

“MARI data shows that mortgage fraud is more prevalent today than it was at the height of the boom in mortgage loan originations,” said John Courson, president and chief executive officer of the Mortgage Bankers Association. “This report is essential reading for mortgage bankers who need to understand where mortgage fraud is coming from, what to watch for and how to protect our companies and communities.”

The report also found that:

· After improving in 2006 and 2007, Georgia jumped from seventh to fourth place in 2008;

· California, ranked fourth in 2007, declined to eighth in 2008;

· Maryland jumped from fifteenth in 2007 to fifth in 2008; and

· The volume of reported frauds related to credit reports dropped from 9% to 4% between 2007 and 2008.

MARI provides valuable industry insight derived from its Mortgage Industry Data Exchange (MIDEX®) database, which contains an aggregation of reported incidents of fraud and verified misrepresentations submitted by leading mortgage industry participants. MARI analyzes this industry data and presents reports that depict a national composition of residential mortgage fraud and misrepresentation to support the industry’s effort in the fight against mortgage fraud.

 

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3 Loan Modification Perps Sent to Jail

admin —  March 10, 2009 — 12 Comments

3 individuals have pled guilty to loan modification fraud against hundreds of “desperate California homeowners” and were sentenced to as much as 6 years of prison. The defendants sentenced were part of a foreclosure scam engineered by the First Gov company, which was based in San Bernardino, California.

• Rosa Conrado, 51, San Bernardino, California, was sentenced to six years, four months of prison for 6 counts of grand theft.

• Alejandrina Maldonado, 33, St. Lucie, Florida, was sentenced on February 26, 2009, to a three year prison term for one count of grand theft.

• Martin Jesus Flores, 33, Baldwin Park, California, was given three years of probation today based on his limited participation in the scheme.

• David Giron, 44, ntario, and Saul Amador, 23, West Covina, both of Califonria, are scheduled for a preliminary hearing on March 19, 2009, for theft, money laundering, and conspiracy.

• Three other members of the ring — Juan Jose Perez, 48, Isuara Hernandez, 33, La Habra, and Antonia Gonzalez, 66, San Bernardino, all of California, – are believed to have fled the jurisdiction and may be out of the country.

In November 2008, Attorney General Brown announced the break up of the First Gov scam ring. First Gov, — which also operated under such misleading names such as Foreclosure Prevention Services; Resolution Department; Reinstatement Department; and Reinstatement Processing — solicited hundreds of homeowners, offering to help them stop the foreclosure of their homes.

Ring members promised victims they would renegotiate their mortgages and reduce monthly payments. They demanded an up-front fee, ranging from $1,500 to $5,000, to participate in the loan-modification program.

Victims were told to stop making mortgage payments and communicating with their lender because this would interfere with the loan modification process. After collecting their fee, ring members pocketed the money and did nothing to help victims.

“While doing nothing to help and pocketing all the money, these individuals ripped off desperate California homeowners who paid thousands of dollars to stop the foreclosure of their homes,” Attorney General Brown said.

The action is part of Attorney General Brown’s campaign to fight predatory lending and loan modification scams.

• In March 2008, the Attorney General’s office arrested members of Lifetime Financial Corporation for perpetrating a similar mortgage-modification scam that cheated hundreds of California homeowners out of hundreds of thousands of dollars.

• In October 2008, the Attorney General secured $8.6 billion in loan relief for eligible homeowners in a landmark settlement with Countrywide Financial Corporation for engaging in deceptive and predatory lending practices.

The Attorney General has also issued a Consumer Alert regarding foreclosure scam rings and tax reassessment scams. Homeowners should be on high alert when approached by companies offering ways to save your home or lower your property taxes.

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Connecticut Man Admits Role In Mortgage Fraud Scheme

admin —  March 3, 2009 — Leave a comment

William Athan, 63, Shelton, Connecticut and Naples, Florida, waived his right to indictment and pleaded guilty today before United States District Judge Vanessa L. Bryant in Hartford, Connecticut, to one count of conspiracy to commit mail fraud and wire fraud related to a $3.6 million mortgage fraud scheme.

According to documents filed with the Court and statements made in court, Athan, Jose Guzman and Brian Guimond, and others participated in the operation of a real estate and mortgage fraud scheme that arranged for individuals to purchase properties and fund mortgages of houses located Connecticut. As part of the scheme, Athan, Guzman and another individual created a New London-based Real Estate Investment Company, which was engaged in both the business of buying and selling real estate properties, and the mortgage origination business.

Through this scheme, the co-conspirators arranged for and assisted in arranging for various individuals, or “borrowers,” to obtain funding from various mortgage companies and mortgage originators, or “lenders.” The co-conspirators arranged for numerous persons to purchase residential real estate properties, and secured the funding for the mortgages for the properties from various lenders. The borrowers usually were individuals who had good credit but were of modest means with low levels of income. The co-conspirators located real estate properties, specifically residential housing properties located in New London County, Connecticut, to be purchased by the borrowers using the funds loaned from various lenders. In order to recruit and entice the individuals to act as the borrowers, the co-conspirators, at times, compensated the borrowers. In order to secure the funding from lenders, the co-conspirators falsified material information on the borrowers’ mortgage loan applications, including information regarding income, assets, employment, rent history, as well as the borrowers’ intention to make the properties their primary residence.

Athan, who had access to an individual with a real estate license and who operated a real estate business, secured property listings for the properties that the co-conspirators wanted to sell, and eventually sold to the borrowers using the funds from the fraudulently obtained mortgages, and then shared in the real estate commissions collected on the sale of those properties.

On certain transactions, including transactions on which Athan served as the borrower, Athan, Guzman and others falsified closing records, including false work invoices from The Cutting Edge, a home improvement contractor and landscaping company controlled by Guimond, and caused checks to be issued at the closing made payable to The Cutting Edge from funds provided by the lenders. The checks were payment for work that purportedly was performed on properties prior to the closing, but which had not been performed as represented. The checks were then converted to cashiers’ checks, which were used during the closing as down payments from the borrower. Through this scheme, the co-conspirators collected large commissions and fees, and a portion of the funds advanced by the lenders, which were intended to be used to finance the purchase of the properties, were in fact used for the benefit of the co-conspirators and their various companies.

More than 200 fraudulent mortgages were funded during the period of the conspiracy. As a result of defaults on the mortgages, the lenders suffered losses of more than $3.6 million.

Judge Bryant has scheduled sentencing for May 21, 2009, at which time Athan faces a maximum term of imprisonment of 20 years and a fine of up to approximately $7.2 million.

Guzman and Guimond have pleaded guilty to charges related to their participation in this scheme and await sentencing.

Acting U.S. Attorney Dannehy stated the investigation is ongoing.

This case is being investigated by the Federal Bureau of Investigation, with the assistance of the U.S. Department of Housing and Urban Development and the Waterford Police Department. The case is being prosecuted by Assistant United States Attorney Michael S. McGarry.

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Temporary Injunction Issued Against Foreclosure Rescue Company

admin —  February 27, 2009 — 1 Comment

FMA Servicing, Inc., Orlando, Florida, a loan modification company, has been temporarily enjoined by the Orange County Circuit Court from charging up-front fees to homeowners for loan modification services. According to the order, FMA Servicing must comply with written notice requirements contained in the Foreclosure Rescue Fraud Prevention Act.

As previously reported by Mortgage Fraud Blog, the Florida Attorney General’s Economic Crimes Division opened its investigation into FMA Servicing in December 2009 and filed a lawsuit against the company earlier this month. The investigation revealed FMA Servicing, which does business under the name Financial Management Advisors, charges an up-front fee as high as $2,500 to homeowners seeking loan modification services. The company subsequently refused to change its business practices even after receiving notification of the Foreclosure Fraud Rescue Prevention Act which took effect on October 1, 2008.

 

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