Archives For Down Payment Fraud

David Tipton, 52, Alexandria, Virginia, was sentenced today to a year and a day in prison for defrauding lenders who provided him with nearly $710,000 towards the purchase and renovation of a residential property in Northeast Washington.

According to the government’s evidence, Tipton owned a company that was created to purchase, renovate, and sell residential real estate in the District of Columbia and Virginia. He signed a contract in January 2013 to purchase a property in the 500 block of 14th Street NE, Washington, DC for $450,000 in cash, planning to renovate and sell the property for a profit. He falsely represented that he had the required funds available to close the cash transaction and created a false bank statement to back up the claim. In fact, almost all of the money for the purchase was coming from two unrelated private individuals whom he had met at a real estate investment seminar. Each of them provided Tipton with $224,497, for a total of $448,994, in return for Deeds of Trust securing their interest in the property.  Tipton did not tell the settlement company about the loans.  As a result, the Deeds of Trust were not recorded.

Additionally, Tipton later obtained $260,000 from a private money lender to renovate the property.  Tipton did not disclose to the lender that two other individuals held Deeds of Trust in the property.

Tipton pled guilty in May 2018, in the U.S. District Court for the District of Columbia, to a charge of mail fraud. He was sentenced by the Honorable Senior Judge Paul L. Friedman. Following his prison term, he will be placed on three years of supervised release. He also must pay $448,994 in restitution, as well as an identical amount in a forfeiture money judgment.

The announcement was made by U.S. Attorney Jessie K. Liu and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office.

In announcing the sentence, U.S. Attorney Liu and Assistant Director in Charge McNamara commended the work of those who investigated the case from the FBI’s Washington Field Office. They also expressed appreciation for the work of those who handled the case for the U.S. Attorney’s Office, including former Assistant U.S. Attorney John P. Marston, former Criminal Investigator Juan Juarez, Paralegal Specialist Aisha Keys, and former Paralegal Specialist Kristy Penny. Finally, they commended the work of Assistant U.S. Attorney Anthony Saler, who investigated and prosecuted the case.

Aleksandr Kovalev, 54, Rocklin, California, was sentenced to three years and ten months in prison for wire fraud involving financial institutions,

According to court documents, Kovalev was in the business of developing, building and selling real property in Sacramento, Fairfield, and Stockton, California. As the real estate market began to weaken, Kovalev offered to make incentive payments to purchasers, through “down payment assistance” or by making other payments to the buyers to be used in whatever manner the buyers wanted. Most of the payments to the buyers were out of escrow and were often paid through intermediaries, originating in Kovalev’s bank account. These payments were not disclosed to the lenders, and had the effect of substantially reducing the sales price below what was represented to the lenders.

Dozens of properties were involved in Kovalev’s mortgage fraud scheme, with several million dollars of losses to the lenders. Kovalev is the last to be sentenced out of nine individuals who were prosecuted as part of this mortgage fraud scheme. http://www.mortgagefraudblog.com/down-payment-assistance-results-in-guilty-plea

Kovalev was sentenced by U.S. District Judge Morrison C. England Jr.

This case was the product of an investigation by the Federal Bureau of Investigation and the IRS Criminal Investigation. Assistant U.S. Attorney Todd A. Pickles prosecuted the case. The sentencing was announced by U.S. Attorney McGregor W. Scott.

Abolghasseni “Abe” Alizadeh, 59, Granite Bay, California, pleaded guilty  to wire fraud, bank fraud and making false statements to a federally insured financial institution.

According to court documents, Alizadeh, a Sacramento-area commercial real estate developer, restaurateur and owner of Kobra Properties, came up with a scheme to fraudulently purchase land that he planned to develop. Banks usually loan up to 60–65 percent of the loan-to-value ratio (LTV) on undeveloped commercial property. (LTV ratio is the comparison between the amount of the loan and the value of the property.) To circumvent the banks and fraudulently get a higher level of financing, Alizadeh submitted altered purchase contracts to the banks that greatly inflated the purported purchase price. The banks, which competed for Alizadeh’s business, were unaware that the purchase prices were inflated and sometimes loaned well in excess of the loan-to-value ratio. By concealing the true purchase price from the banks, Alizadeh received substantial amounts of cash, sometimes millions of dollars, at the close of escrow and avoided making the full down payment or, in some instances, any down payment.

Alizadeh was assisted in this scheme by co-defendant Mary Sue Weaver, 64, currently of Scottsdale, Arizona and formerly of Lincoln, California, who was employed at a local title company. According to the plea agreement, Alizadeh would write checks for the down payment, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not.

On April 29, 2005, Alizadeh submitted a fraudulent purchase contract to Central Pacific Bank, which induced the bank to lend him nearly $4 million for the purchase of 10.3 acres of property. This loan represented over 96 percent loan-to-value ratio. Similarly, on October 21, 2005, Alizadeh received over $22 million in funding and loans to purchase the Turtle Island property, when in actuality, the original purchase price was $10 million. In March 2006, Alizadeh also falsely claimed to Bank of Sacramento that he was paying $36 per square foot for a piece of property where he intended to build a TGI Friday’s restaurant. In reality, Alizadeh was paying only $21 per square foot. This resulted in a $650,000 inflation of the true purchase price. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of over $22 million.

Alizadeh is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on March 30, 2018. Co-defendant Weaver pleaded guilty to one count of wire fraud and one count of bank fraud on December 15, 2017, and is scheduled for sentencing on March 23, 2018. Alizadeh and Weaver face a maximum statutory penalty of thirty years in prison on each count and a $1 million fine.

U.S. Attorney McGregor W. Scott announced the plea. The case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorney Michael D. Anderson and Heiko P. Coppola are prosecuting the case.

James Nassida, IV, 50, West Mifflin, Pennsylvania, was sentenced in federal court to 78 months of incarceration on his conviction of conspiracy to commit bank fraud, wire fraud, and mail fraud.

According to information presented to the court, Nassida owned and operated a mortgage broker business called Century III Home Equity (Century III), which assisted borrowers in obtaining loans collateralized by real estate. At the time of the events at issue, which was between 2002 and 2008, Century III was one of the largest mortgage broker businesses in the Western District of Pennsylvania, and during the course of that timeframe brokered hundreds of millions of dollars worth of loans using more than a dozen different lenders. Many of those loans, however, involved one or more aspects of fraud.

Some of the aspect of the fraud included the following:

  • Appraisals that fraudulently inflated the true value of the properties;
  • Settlement statements that falsely reflected that the borrowers made substantial payments associated with the purchases of real estate;
  • Settlement statements that failed to disclose secondary financing;
  • Settlement statements that failed to include cash payments charged by Century III and paid by the borrowers;
  • Settlement statements and closing documents that were backdated to reflect that the settlements had occurred on a date prior to the actual settlement date; and
  • Various loan documents, including loan approval forms, good faith estimates, and underwriting transmittal forms, that failed to disclose secondary financing and falsely represented the combined loan to value ratio

The fraud also involved misrepresentations to some of the borrowers to induce them to enter into the transactions, including concealing the fees Century III received from lenders for the borrowers’ transactions and the impact of those fees on the borrowers’ interest rates; and concealing the nature of the mortgage products, including that some of the mortgage products could negatively amortize. Lastly, the fraud also involved Nassida’s receipt of kickbacks from the settlement company that he failed to disclose to the borrowers and lenders, as required.

Nassida also submitted multiple fraudulent documents associated with loans in which he served as a loan officer, but also that the loan officers working under his direction regularly submitted false information to lenders and borrowers. In addition, Nassida caused the submission of fake documents to the lender in connection with his purchase of a $300,000 vacation home near Seven Springs, including the following: (1) a settlement statement that overstated the sales price; (2) a loan application that falsely stated his income and assets; and (3) fake statements from an investment company that falsely verified that he had more than $600,000 in investments when he really had about $15,000. In the loan application, James Nassida reported that he earned approximately $980,000 in 2006, but he did not even file his tax returns in 2006, and his reported taxable income in 2004 and 2005 was not even close to that figure.

This case was a breeding ground for many of the other investigations led by the Western Pennsylvania Mortgage Fraud Task Force,” said FBI Special Agent in Charge Robert Johnson. “Mortgage fraud cases are a priority for the FBI because mortgage lending and the housing market have such a significant effect on the overall economy. At the time of this case, James Nassida was living a fancy lifestyle, in a million dollar home, taking money from victims who put their trust in him. That is why today’s sentencing is significant. Since the task force formation in February, 2008, more than 100 people were charged and more than a half billion dollars in fraudulent loans were uncovered,” added SAC Johnson.

United States Attorney Scott W. Brady announced the sentence.  Assistant United States Attorneys Brendan T. Conway and Cindy Chung prosecuted this case on behalf of the government. Senior United States District Judge Donetta Ambrose imposed the sentence.

United States Attorney Brady commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of Nassida. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Allegheny County District Attorney’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Luis Antonio Rodriguez, 37, Mission, Texas, Rogelio Ramos Jr., 37, Pharr, Texas have been ordered to prison today for conspiracy to commit wire fraud following their convictions related to a “second chance” mortgage lending scheme. Also sentenced today was another co-conspirator, Guadalupe Artemio Gomez, 32, Mission, Texas, who had pleaded guilty prior to trial.

All three were accused of operating a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The investigation revealed Gomez, Rodriguez and Ramos conducted business in McAllen, Mission, Edinburg, Houston and San Antonio, Texas by hiring recruiters to funnel prospective home buyers to Infinite Properties. The homebuyers then gave 10 percent of the purchase price as a down payment to Infinite Properties. http://www.mortgagefraudblog.com/?s=Luis+Antonio+Rodriguez

During trial, the jury heard from victims, law enforcement and an FBI forensic accountant who testified that instead of using the down payments as intended, the money was used for personal expenses, trips to Las Vegas, Nevada and to purchase other real estate.

At the hearing, the court heard from all three defendants as well as numerous victims who provided testimony that described the substantial harm they and their families suffered as a result of the fraud.

Gomez testified at trial against Rodriguez and Ramos stating the two men received more than $1 million in the mortgage scheme in 2016.

The defense claimed they had no intent to defraud the victims because they had attempted to get a $10 million loan. The jury was not convinced and found both men guilty as charged.

U.S. District Judge Randy Crane ordered Rodriguez to serve a total of 13 years in federal prison, while Ramos received a 90-month term of imprisonment. Gomez received a four-year sentence. The three men were further ordered to serve five years of supervised release and ordered to pay $1,858, 997.75 in restitution to the victims of the scheme.

Previously released on bond, the three men were taken into custody following the sentencing today where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

Acting U.S. Attorney Abe Martinez made the announcement.

The FBI, Texas Department of Insurance and police departments in McAllen, Mission and Edinburg conducted the investigation.

Assistant U.S. Attorneys Robert L. Guerra Jr. and Andrew Swartz prosecuted the case.

 

Luis Antonio Rodriguez, 36, Mission, Texas, and Rogelio Ramos Jr., 36, Pharr, Texas were convicted by a federal jury of conspiracy to commit wire fraud for their roles in a “second chance” mortgage lending scheme.  The convictions followed a seven-day-trial and approximately nine hours of deliberation by the jury.

Guadalupe Artemio Gomez, 31, Mission, Texas, pleaded guilty before trial and testified against both Rodriguez and Ramos.

All three were accused of operating a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The investigation revealed Gomez, Rodriguez and Ramos conducted business in McAllen, Mission, Edinburg, Houston and San Antonio, Texas, by hiring recruiters to funnel prospective home buyers to Infinite Properties. The homebuyers then gave 10 percent of the purchase price as a down payment to Infinite Properties.

During trial, the jury heard from victims, law enforcement and an FBI forensic accountant who testified that instead of using the down payments as intended, the money was used for personal expenses, trips to Las Vegas and to purchase other real estate.

The defense claimed they had no intent to defraud the victims because they had attempted to get a $10 million loan. The jury was not convinced and found both men guilty as charged.

Rodriguez and Ramos defrauded 106 people out of more than $1.8 million in down payments.

Anyone who believes they may be a victim of fraud in relation to this investigation or any other similar crime may contact the FBI at 210-225-6741.

U.S. District Judge Randy Crane presided over the trial and set Rodriguez and Ramos for sentencing on Aug. 8, 2017. Gomez will be sentenced July 25, 2017. All face up face up to up to 30 years in federal prison and a possible $1 million fine.

The convictions were announced by Acting U.S. Attorney Abe Martinez.

The FBI and police departments in McAllen, Mission and Edinburg conducted the investigation. Assistant U.S. Attorneys Robert L. Guerra Jr. and Andrew Swartz prosecuted the case.

Alejandro E. Mayendía-Blanco was sentenced to serve 21 months of imprisonment for mortgage fraud, five years of supervised release, pay a fine of $50,000, and ordered to pay restitution of $98,666.  Mayendía-Blanco pled guilty on August 12, 2016.

Mayendía-Blanco was arrested on May 29, 2015, on charges of defrauding First Equity Mortgage Bankers, Inc. (FEBMI) in connection with a loan application. On October 3, 2008, the defendant participated in a real estate transaction as the seller of real property located in San Juan, Puerto Rico. As part of the transaction, the defendant, along with co-defendant Orlando Mayendía represented that Orlando Mayendía was going to contribute $48,381.10 towards the purchase of the property. At the time that the defendant and Orlando Mayendía made this representation to FEBMI they knew it to be false, since the defendant had agreed to contribute the $48,381.10 to the purchaser, Orlando Mayendía, after the sale. Thus, the proceeds of the contribution from the borrower, Orlando Mayendía were the sales proceeds provided to Alejandro Mayendía.

We are committed to bringing to justice those involved in federal financial crimes in Puerto Rico,” said Rosa Emilia Rodríguez-Velez, United States Attorney for the District of Puerto Rico, in announcing the sentence. “The US Attorney’s Office will continue to investigate and prosecute financial crimes and ensure just and effective punishment for those who perpetrate them, and recover proceeds for victims of financial crimes.”

Mayendía-Blanco was sentenced by United States District Court Judge Francisco A. Besosa. Assistant U.S. Attorneys Nicholas Cannon and Mariana E. Bauzá prosecuted the case.

Dianna Woods, 60, Citrus Heights, California, was sentenced to three years in prison for four counts of making false statements on loan applications.

According to evidence presented at her four-day trial in December 2016, Woods was a licensed real estate salesperson who worked at a company called VLD Realty, doing business as Trade House USA, in the Sacramento area. VLD built and sold houses in residential developments in Sacramento, Carmichael, and Copperopolis, Caifornia. As the housing market began to weaken from 2006 through 2008, VLD sought to sell the houses by offering money to buyers in the form of paying the down payment or giving the buyers money after the transaction, neither of which was disclosed to the lenders.

For her part, Woods purchased two houses based on the undisclosed kickbacks. Further, for the purpose of obtaining mortgage loans to purchase the properties, Woods also signed and submitted loan applications and other documents that contained false statements as to Woods’s income, employment, assets, the purpose of the property, the sales price, and whether the down payment was borrowed. Woods also assisted another buyer in making false statements to the lenders to get loans for the purchase of two properties in the housing developments and falsely verified his employment. The banks suffered nearly $2 million in losses with respect to fraudulent transactions in which Woods was involved.

Woods was sentenced by Senior U.S. District Judge William B. Shubb. The sentence was announced by U.S. Attorney Phillip A. Talbert and the case was the product of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Shelley Weger and Todd Pickles prosecuted the case.

Michelle Cabrera, 48, Miami Lakes, Florida, and Pedro Melian, 39, Hialeah, Florida, pled guilty to one count of conspiracy to commit wire fraud related to their participation in a $10 million Florida mortgage fraud scheme. At sentencing, each defendant faces up to thirty years’ imprisonment.

Marco Laureti, 45, Sunny Isles Beach, Florida, and Felix Mostelac, 44, Miami Beach, Florida, were charged by Indictment with one count of conspiracy to commit wire fraud  and multiple counts of wire fraud, for conduct allegedly related to the Florida mortgage fraud scheme, and are awaiting trial.

According to court documents, defendants Laureti, Mostelac, Cabrera and Melian were involved with a $10 million mortgage fraud scheme. Laureti was a former newspaper publisher and owner of Laureti Publishing Company, in addition to being a licensed real estate sales associate and mortgage broker. Mostelac was Laureti’s associate and also the owner of several companies. Cabrera owned Florida Elite Title & Escrow in Davie, Florida and served as the title agent for these transactions. Melian also owned several companies.

According to information presented in court and accompanying documents, the defendants engaged in a fraud scheme involving a condominium complex located at 45 Hendricks Isle, Fort Lauderdale, Florida. Defendants Laureti, Mostelac and Melian made false and fraudulent statements to a financial institution on loan applications and closing statements for the multi-million dollar condominiums. Once the loans were approved, defendant Cabrera, at Laureti’s direction, diverted the loan proceeds to fund the cash the borrower was expected to bring to the property’s closing, as well as diverting additional monies from the loan proceeds to various companies owned by Laureti and Mostelac. Furthermore, according to court documents, Laureti and Mostelac utilized the same scheme on the loan applications and closing statements to purchase their own multi-million dollar residential properties in Miami Beach, in addition to Laureti directing Cabrera to divert funds. The defendants’ scheme defrauded the financial institution of approximately $10 million.

Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement. Mr. Greenberg commended the investigative efforts of the FBI. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.

David Cevallos, real estate agent, 46, Miami, Florida, and Osbel Sanchez, real estate agent, 45, Tampa, Florida, pleaded guilty to conspiracy to commit wire fraud affecting a financial institution. Each faces a maximum penalty of 30 years in federal prison. Sanchez’s sentencing hearing has been set for April 24, 2017, and Cevallos’s sentencing hearing has been set for May 8, 2017.

According to the plea agreements, between summer 2008 and January 2009, Cevallos and Sanchez conspired with each other and others to fraudulently induce lenders into making mortgage loans based upon false information. This conspiracy involved a series of real estate transactions where the parties, including Cevallos and Sanchez, would make or cover up false statements made to the lenders regarding the source of down payments for the real estate transactions, and the manner in which the mortgage funds would be distributed. Most of these transactions involved Tribute Residential, a real estate development company operated by co-conspirator Rebecca Gheiler, as the seller.

Specifically, the parties represented to the lenders that down payments for these properties were being provided by the individuals purchasing the properties, when in fact they were provided by Cevallos or Sanchez. After the transactions had closed and the mortgage funds were released to Tribute Residential, Gheiler would arrange for the post-closing payments of the mortgage proceeds to be provided to Cevallos’s real estate firm, Metro Brokers. These post-closing payments reimbursed Cevallos for the money that he or Sanchez had provided to cover the buyer’s down payments, and to provide post-closing commissions from funds that were supposed to go to the seller. As a result, the lenders were unknowingly funding the down payment for the transactions (as well as undisclosed commissions) from the mortgage proceeds themselves, and were being misled as to the true value of the properties for which they were providing loans.

United States Attorney A. Lee Bentley, III made the announcement.

The case was investigated by the Federal Housing Finance Agency – Office of Inspector General, the Florida Office of Financial Regulation and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Vincent S. Chiu and Special Assistant United States Attorney Chris Poor.