Archives For Down Payment Fraud

State’s Attorney Facing Perjury & False Mortgage Application Charges

Stephanie Abbott —  January 13, 2022 — Leave a comment

Marilyn J. Mosby, 41, Baltimore, Maryland, was indicted today on federal charges of perjury and making false mortgage applications, relating to the purchases of two vacation homes in Florida.

According to the four-count indictment, on May 26, 2020 and December 29, 2020, Mosby submitted “457(b) Coronavirus-Related Distribution Requests” for one-time withdrawals of $40,000 and $50,000, respectively, from City of Baltimore’s Deferred Compensation Plans.  In each request, the indictment alleges that Mosby falsely certified that she met at least one of the qualifications for a distribution as defined under the CARES Act, specifically, that she experienced adverse financial consequences from the Coronavirus as a result of being quarantined, furloughed, or laid off; having reduced work hours; being unable to work due to lack of childcare; or the closing or reduction of hours of a business she owned or operated.  In signing the forms, Mosby “affirm[ed] under penalties for perjury the statements and acknowledgments made in this request.”  The indictment alleges that Mosby did not experience any such financial hardships and in fact, Mosby received her full gross salary of $247,955.58 from January 1, 2020 through December 29, 2020, in bi-weekly gross pay direct deposits of $9,183.54.

Further, the indictment alleges that on July 28, 2020 and September 2, 2020, as well as on January 14, 2021 and February 19, 2021, Mosby made false statements in applications for a $490,500 mortgage to purchase a home in Kissimmee, Florida and for a $428,400 mortgage to purchase a condominium in Long Boat Key, Florida.  As part of both applications, Mosby was required to disclose her liabilities.  Mosby did not disclose on either application that she had unpaid federal taxes from a number of previous years and that on March 3, 2020, the Internal Revenue Service (IRS) had placed a lien against all property and rights to property belonging to Mosby and her husband in the amount of $45,022, the amount of unpaid taxes Mosby and her husband owed the IRS as of that date.  In each application, Mosby also responded “no” in response to the question, “Are you presently delinquent or in default on any Federal debt or any other loan, mortgage, financial obligation, bond, or loan guarantee,” even though she was delinquent in paying federal taxes to the IRS.

Finally, according to the indictment, one week prior to closing on the Kissimmee vacation home, on or about August 25, 2020, Mosby executed an agreement with a vacation home management company giving the management company control over the rental of the property she ultimately purchased in Kissimmee.  On September 2, 2020, Mosby signed a “second home rider” which provided, among other things, that the borrower occupy and use the property as their second home; that the borrower maintain exclusive control over the ownership of the property, including short-term rentals, and not subject the property to any…agreement that requires the borrower either to rent the property or give a management firm or any other person or entity any control over the occupancy or use of the property; and that the borrower keep the property available primarily as a residence for their personal use and enjoyment for at least one year, unless the lender otherwise agrees in writing.  The indictment alleges that by falsely executing the “second home rider” Mosby could obtain a lower interest rate on the mortgage for the property than she would have received without it.

If convicted, Mosby faces a maximum sentence of five years in federal prison for each of two counts of perjury and a maximum of 30 years in federal prison for each of two counts of making false mortgage applications.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

The defendant will have an initial appearance in U.S. District Court in Baltimore, but the hearing has not yet been scheduled.

The indictment was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.

United States Attorney Erek L. Barron commended the FBI and IRS-CI for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorneys Leo J. Wise, Sean R. Delaney, and Aaron S.J. Zelinsky, who are prosecuting the federal case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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Attorney Indicted for Allegedly Stealing From Client in the Sale of Her Property

Stephanie Abbott —  May 10, 2021 — Leave a comment

Antoni Moszczynski, 67, Madison, New Jersey, an attorney has been arraigned today on an indictment in which he is charged with grand larceny for allegedly stealing approximately $239,500 in funds he received, and was not entitled to, while representing a client in the sale of her deceased sister’s estate.

According to the investigation, in December 2019, the defendant, an attorney who is currently licensed to practice law in New York, represented the victim in the sale of her property at 584 Leonard Street, Brooklyn, New York. The victim, who was appointed executrix of her deceased sister’s estate, entered contract of sale for $2.395 million.

It is alleged that on December 2, 2019, the defendant received a wired down payment from the buyer into his escrow account in the amount of $239,500. Furthermore, it is alleged that, within a week, the defendant transferred $210,000 into his personal bank account with Wells Fargo, and within three months had withdrawn or spent the remainder of the down payment.

The victim retained a different attorney to represent the estate at the closing, which took place on June 30, 2020. The defendant was allegedly not present at the closing and has not answered calls from the victim or her attorney. To date, the defendant has not given the victim or the estate the down payment he allegedly stole.

Moszczynski was arraigned in front of Brooklyn Supreme Court Justice Danny Chun on an indictment in which he is charged with second-degree grand larceny. He was released without bail and ordered to return to court on June 29, 2021.

Brooklyn District Attorney Eric Gonzalez today made the announcement.

District Attorney Gonzalez said, “This defendant allegedly abused his power and betrayed his client to steal hundreds of thousands of dollars to which he was not entitled and has not returned despite the victim’s repeated attempts to contact him. We will now seek to hold him accountable for this flagrant and brazen theft.”

If you believe that you or someone you know is the victim of fraud or theft perpetrated by the defendant, please call the District Attorney’s Action Center at (718) 250-2340.

This case is being prosecuted by Senior Assistant District Attorney Sara Walshe of the District Attorney’s Public Integrity Bureau, under the supervision of Assistant District Attorney Laura Neubauer, Chief of the Public Integrity Bureau, and Assistant District Attorney Michel Spanakos, Deputy Chief of the Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.

An indictment is an accusatory instrument and not proof of a defendant’s guilt

 

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Mob Associate Sentenced for Real Estate Fraud Scheme

Stephanie Abbott —  April 13, 2021 — Leave a comment

Stephen Sharkey, 51, Swedesboro, New Jersey, was sentenced to four years and one month in prison, three years of supervised release, for stealing down payments for homes from two different families.

In September 2020, the defendant pleaded guilty to two counts of conspiracy to commit wire fraud, eight counts of wire fraud, one count of aggravated identity theft and, one count of money laundering in connection with three brazen and predatory frauds which greatly harmed innocent victims and netted the defendant more than $385,000. Sharkey engaged in two mortgage-closing schemes to defraud potential home buyers – stealing money that the victims had intended to use to purchase residences for themselves and their families. In the third scheme, the defendant stole all of the proceeds of the sale of a house by secretly going to closing without telling the seller.

Sharkey and his associate, Antonio Ambrosio, convinced their victims to provide Sharkey with the down payment funds in advance of the dates set for the real estate closings, with the promise that Sharkey would provide full financing for the purchases. Rather than finance the deals, Sharkey and Ambrosio simply stole the down payment money supplied by the victims and made excuses when the deals did not close. As part of the scam, Sharkey and Ambrosio even defrauded Ambrosio’s own brother-in-law out of $208,000. After receiving this money, Sharkey immediately cut checks to ARMM Investments, LLC, a company owned by George Borgesi. Borgesi and Sharkey were both convicted in United States v. Merlino, et al., 99 CR 363, an early 2000s RICO case in which the Philadelphia La Cosa Nostra was named as the enterprise. Borgesi was named as a capo of the Philadelphia LCN in that Indictment, and Sharkey was identified as a bookmaker for the mob.

After Sharkey and Ambrosio stole the down payment from Ambrosio’s brother-in-law, they proceeded to lure a second victim to use Sharkey to finance his mortgage, and the victim wired Sharkey $100,000, which Sharkey promptly converted to his own use. The deal for this property fell through, but Sharkey and Ambrosio induced the victim to send the seller an extra $25,000 to hold the deal open, claiming Sharkey would get the deal done. The victim sent the seller the $25,000, but Sharkey had already disposed of the earlier $100,000 and the deal never closed.

Finally, in the real estate fraud perpetrated on the seller victim, Sharkey promised the victim that Sharkey would sell the house belonging to the estate of the victim’s deceased parents and, after going to a closing the victim knew nothing about, Sharkey deposited all of the proceeds of the sale into his own bank account, stealing over $52,000 from the victim in the process.

Sharkey was ordered to pay $296,000 restitution and to forfeit the same amount of money.

Acting United States Attorney Jennifer Arbittier Williams made the announcement.

“Sharkey’s greed impacted the lives and security of multiple families, and his shameful actions had severe consequences for these innocent people,” said Acting U.S. Attorney Williams. “Not only did he and his associate steal mortgage down payments, but he also sold a different family’s house right out from underneath them and pocketed all of the cash. For his actions, he will now spend years in prison.”

“Real estate fraud was just the latest racket for Stephen Sharkey,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He blatantly preyed on innocent victims here, destroying two families’ plans of buying homes and stealing a third person’s inherited property. A chunk of these fraudulent proceeds was diverted to a longtime Philadelphia mob figure, underscoring Sharkey’s continued association with organized crime. The FBI and our partners are going to keep investigating and locking up those committed to making money through illicit means.”     

“This investigation once again reveals how members and associates of the Philadelphia La Cosa Nostra Organized Crime Family are constantly looking to make illicit financial gains by infiltrating legitimate business or exploiting regulatory rules as well as federal and state laws,” said Brandon Corby, Eastern Organized Crime Task Force Commander, Pennsylvania State Police. “The Pennsylvania State Police with our FBI partners are committed to eradicating this type of criminal behavior and hold those engaged in such activities accountable.”

The case was investigated by the Federal Bureau of Investigation’s Organized Crime Task Force and the Pennsylvania State Police, and is being prosecuted by Assistant United States Attorney Michael T

 

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Former Lawyer Indicted for Allegedly Stealing From Client in Real Estate Deal

Stephanie Abbott —  April 8, 2021 — Leave a comment

Gerald Douglas, 52, East Flatbush, Brooklyn, New York was arraigned today on an indictment in which he is charged with second-degree grand larceny for allegedly stealing the down payment toward the purchase of a Brownsville, New York home whose seller he represented.

According to the investigation, the defendant represented a 76-year-old woman in the sale of her Brownsville house, negotiating the contract for her in September 2018. A down payment of $71,700 was allegedly deposited into the defendant’s escrow account. The closing occurred in August 2019, by which time the defendant had allegedly stopped returning his client’s phone calls and she was forced to retain new counsel to close the transaction. The client received the sale proceeds at the closing, but not the down payment despite repeated requests to the defendant.

It is further alleged that in June and July 2018, the defendant asked the same client if she would loan him money, first $6,000 and then $8,000. He allegedly told her he was expecting a rental payment for a property he owned in Flatbush, Brooklyn, though in fact the property had gone into foreclosure five years earlier and he was no longer the owner.

Douglas was released without bail and ordered to return to court on May 12, 2021.

The defendant was disbarred by the Appellate Division Second Department in 2019.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said “The victim in this case was allegedly defrauded of a large sum of money by her own attorney, who had a legal duty to protect her interests. I would like to thank my Public Integrity Bureau for its hard work in seeking to hold the defendant accountable for his alleged criminal act and betrayal of trust.”

The case is being prosecuted by Senior Assistant District Attorney Adam Libove of the District Attorney’s Public Integrity Bureau, under the supervision of Assistant District Attorney Laura Neubauer, Bureau Chief, and Assistant District Attorney Michel Spanakos, Deputy Chief of the District Attorney’s Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

 

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Brother & Sister Charged in Real Estate Scam Involving Fake Open Houses at Not-for-Sale Homes

Stephanie Abbott —  April 6, 2021 — Leave a comment

Adolfo Schoneke, 43, Torrance, California and his sister, Bianca Gonzalez, a.k.a. Blanca Schoneke, 38, Walnut, California, a brother-and-sister team were arrested today on federal charges alleging they orchestrated a $6 million real estate fraud scam in which they listed homes without the owners’ consent and collected money from multiple would-be buyers for each of the not-for-sale homes.

According to the indictment, Schoneke and Gonzalez, with the help of co-conspirators, operated real estate and escrow companies based in Cerritos, La Palma and Long Beach, California under a variety of names, including MCR and West Coast. The indictment alleges Schoneke and Gonzalez found properties that they would list for sale – even though many, in fact, were not for sale, and they did not have authority to list them for sale – and they then marketed the properties as short sales providing opportunities for purchases at below-market prices.

Using other people’s broker’s licenses, Schoneke and Gonzalez allegedly listed the properties on real estate websites such as the Multiple Listing Service (MLS). In some cases, the indictment alleges, the homes were marketed through open houses that co-conspirators were able to host after tricking homeowners into allowing their homes to be used.

As part of the alleged scheme, the co-conspirators accepted multiple offers for each of the not-for-sale properties, hiding this fact from the victims and instead leading each of the victims to believe that his or her offer was the only one accepted. The co-conspirators allegedly were able to string along the victims – sometimes for years – by telling them closings were being delayed because lenders needed to approve the purported short sales.

The indictment also alleges that Schoneke and Gonzalez directed office workers to open bank accounts in the office workers’ names. Those accounts were used to receive down payments on the homes and other payments from victims who were convinced to transfer the full “purchase price” to these bank accounts after receiving forged short sale approval letters. Schoneke and Gonzalez also allegedly directed the office workers to withdraw large amounts of cash from these accounts and give it to them – a procedure that allowed Schoneke and Gonzalez to take possession of the fraud proceeds while hiding their involvement in the scheme.

Investigators estimate that several hundred victims collectively lost more than $6 million during the scheme.

Each pleaded not guilty this afternoon to nine charges contained in an indictment unsealed after their arrests. The indictment charges Schoneke and Gonzalez with one count of conspiracy, seven counts of wire fraud, and one count of aggravated identity theft.

During the arraignments this afternoon, a trial was scheduled for June 1, 2021. Both defendants will remain in custody at least until detention hearings scheduled for Friday for Schoneke and April 13, 2021 for Gonzalez.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

If convicted of all charges, Schoneke and Gonzalez each would face a statutory maximum sentence of 162 years in federal prison.

This matter was investigated by the FBI and the Federal Deposit Insurance Corporation, Office of Inspector General. The investigation was initiated by numerous complaints to the Long Beach Police Department and the Los Angeles County Sheriff’s Department, both of which provided substantial assistance during the federal investigation.

This case is being prosecuted by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.

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R. E. Developer Charged in Mortgage Fraud Scheme

Stephanie Abbott —  February 2, 2021 — Leave a comment

Andrzej Lajewski, 53, formerly of Wheeling, Illinois, a real estate developer, who owned Des Plaines-based Highland Consulting Corp., and Chicago-based Quality Management and Remodeling Inc., has been indicted with three others for allegedly participating in a mortgage fraud scheme that defrauded financial institutions out of at least $3 million.

According to an indictment returned Jan. 28, 2021, Lajewski schemed with two mortgage professionals and the owner of a remodeling company to fraudulently obtain at least $3 million in mortgage loans by making and causing to be made materially false representations to financial institutions regarding the buyers’ qualifications for the loans. The false representations concerned the buyers’ employment history, income, assets, source of down payment, and intention to occupy the properties, the indictment states.  In some instances Lajewski fraudulently claimed to lenders that the buyers were employed by his companies – even though he knew that was untrue – to help the buyers qualify for the mortgage loans, the indictment states.

The alleged fraud scheme lasted from 2010 to 2016 and involved numerous properties on the South Side of Chicago.

The indictment charges multiple counts of financial institution fraud against Lajewski, and two mortgage professionals – loan originator Agnieszka Siekowski, 46, Northbrook, Illinois and loan processor Aldona Bobrowicz, 45, Arlington Heights, Illinois and the home remodeler, Andrzej Bukowski, 66, formerly of Wheeling, Illinois.  Arraignments for Siekowski and Bobrowicz are scheduled for Friday at 10:00 a.m. before U.S. District Judge Martha M. Pacold.  Arraignments for Lajewski and Bukowski have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General.  The government is represented by Assistant U.S. Attorneys Kalia Coleman and Jason Yonan.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of financial institution fraud is punishable by up to 30 years in federal prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

 

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Former Bank President Pleads Guilty to Bank Fraud

Stephanie Abbott —  July 31, 2020 — Leave a comment

Mary Beyer Halsey, age 59, Rising Sun, Maryland, the former President and Chief Executive Officer of Cecil Bank, pleaded guilty today to the federal charges of conspiracy to commit bank fraud, receipt of a bribe by a bank official, and false statement in bank records, in connection with the straw purchase of a home in Elkton, Maryland, upon which Cecil Bank had foreclosed.

Cecil Bank, located in Elkton, Maryland, had received $11,560,000 in federal taxpayer funds in 2008, under the Capital Purchase Program, as part of the Troubled Asset Relief Program. On April 20, 2011, Cecil Bank initiated the foreclosure of a single-family house located at 127 Ebenezer Church Road in Elkton.

According to her plea agreement, from 2012 to 2013, Halsey conspired with Daniel Whitehurst, an employee of a real estate development company that did business in Maryland, to defraud Cecil Bank and another bank to purchase a home through false pretenses, representations and promises. Specifically, on March 28, 2012, Halsey and Whitehurst met at a restaurant in Cecil County. Whitehurst asked Halsey if she could help him and a business partner get a $500,000 line of credit from Cecil Bank. Halsey agreed to help Whitehurst to obtain a line of credit from Cecil Bank, in exchange for Whitehurst agreeing to serve as the straw purchaser of 127 Ebenezer, Elkton, Maryland on behalf of Halsey. Halsey suggested that she increase the line of credit for Whitehurst to $650,000 to include the funds needed to buy the house. Whitehurst agreed to Halsey’s request to secretly buy 127 Ebenezer on Halsey’s behalf. On May 9, 2012, Halsey participated in a loan committee meeting at Cecil Bank that considered and approved a $650,000 line for credit for Whitehurst and a $500,000 line of credit for his business partner.

Halsey admitted that at her request, on May 14, 2012, Whitehurst visited 127 Ebenezer and provided Halsey with an estimate of the costs to update the house. Whitehurst determined that beyond replacing the kitchen subflooring at a cost of about $1,000, there were no significant repairs needed. Whitehurst provided a letter of intent to purchase the home from the bank for $150,000 for Halsey to review. Halsey suggested lowering the price to $145,000 to allow room to increase the offer later. Halsey knew that an exterior-only appraisal of the property ordered by Cecil Bank on November 9, 2011, showed a market value of $263,000. A full appraisal on September 10, 2012, reflected a market value of $295,000. To support the below-market price that Halsey wanted to pay, Whitehurst included in the letter of intent a list of lower-priced home sales in the same area that were not comparable to 127 Ebenezer and therefore was not reflective of the property’s actual market value.

As detailed in the plea agreement, on May 23, 2012, Whitehurst e-mailed Cecil Bank his offer to purchase 127 Ebenezer for $145,000. On the same day, during a meeting of the Cecil Bank Board of Directors, Halsey advised the Board that Whitehurst had made a purchase offer of $140,000 for 127 Ebenezer, $5,000 less the actual offer. To support the below-market price of $140,000, Halsey falsely characterized the property as having “structural deficiencies [that] will require significant repairs.” Halsey did not disclose her personal interest in the property, nor Whitehurst’s role as her nominee to acquire the property on her behalf. The Board authorized Halsey to “negotiate the best price.” Thereafter, Whitehurst submitted a contract for him to purchase 127 Ebenezer from Cecil Bank for $150,000, which Halsey signed on August 17, 2012 on behalf of Cecil Bank.

According to the plea agreement, subsequent to authorizing the sale of 127 Ebenezer, Halsey told Whitehurst that he should not use his line of credit from Cecil Bank to purchase the house, but should instead get the funds from a different source. Whitehurst applied for and obtained a $100,000 loan from another bank to purchase 127 Ebenezer, fraudulently claiming that he was purchasing the property for himself and that the down payment was from an investment account. On October 31, 2012, prior to 127 Ebenezer going to settlement, Halsey wired $75,000 to Whitehurst’s bank account to cover the cost of the down payment as well as closing costs and upgrades to the property that Halsey directed Whitehurst to arrange. To conceal the true purpose of the wired funds, Whitehurst sent Halsey a fictitious real estate contract purporting to show that the $75,000 was the down payment for a different property that Whitehurst owned in Havre de Grace, Maryland.

On November 21, 2012, the settlement of 127 Ebenezer was held with Halsey representing Cecil Bank as the seller, and Whitehurst as the purported purchaser, selling the property to Whitehurst for $150,000. Both signed the HUD-1 form which falsely represented that Whitehurst had paid approximately $52,566 at settlement, when in fact, the down payment and all related closing costs were paid from the $75,000 Halsey had wired to Whitehurst’s bank account beforehand. From October 31, 2012 through March 29, 2013, Halsey transferred an additional $60,000 to Whitehurst to cover the cost the upgrades to the house that they had previously discussed, as well as to reimburse Whitehurst for mortgage payments he made on the property. Halsey and Whitehurst also made plans to transfer title of the property to Halsey by selling the house to her at a price that would minimize the tax consequences of the sale for Whitehurst.

In December 2012, in response to a question from a bank examiner for the Federal Reserve Bank of Richmond inquiring about the sale of the property to Whitehurst, Halsey falsely stated that she was “not totally familiar with [that] property” and that the bank had difficulty marketing the property and had not listed it with a realtor because of “issues with the county over the bonds outstanding.”

In April 2013, federal agents began interviewing employees and other borrowers about banking irregularities at Cecil Bank. Title to 127 Ebenezer was never transferred to Halsey. Halsey never told the bank that she was the true purchaser of 127 Ebenezer, nor did the bank know that Halsey and Whitehurst had orchestrated the sale of the foreclosed property at the fraudulent price of $150,000, instead of the appraised pre-renovation price of $295,000.

As a result of Halsey’s misrepresentations and omissions, the bank lost approximately $145,000.

Halsey faces a maximum sentence of 30 years in federal prison for each offense: conspiracy to commit bank fraud; false statement in bank records; and receipt of a bribe by a bank official. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for November 6, 2020 at 11:00 a.m.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Mark P. Higgins of Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), Mid-Atlantic Region; Special Agent in Charge Patricia Tarasca of Federal Deposit Insurance Corporation, Office of Inspector General (FDIC/OIG), New York Region; Special Inspector General Christy Goldsmith Romero for the Troubled Asset Relief Program (SIGTARP); and Inspector General Hannibal “Mike” Ware of the Small Business Administration, Office of Inspector General (SBA/OIG).

“Mary Beyer Halsey used her position as President and CEO of Cecil Bank for her personal benefit, causing a loss to the bank, which had already received federal taxpayer funds as part of the Troubled Asset Relief Program,” said U.S. Attorney Robert K. Hur. “Corrupt bank officials undermine the public’s trust in our financial system.”

“The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) is committed to investigating allegations of fraud committed by officers of financial institutions which are members of the 11 Federal Home Loan Banks (FHLBanks) because their crimes strike at the heart of the FHLBank System,” said Mark Higgins, Special Agent in Charge of the FHFA-OIG’s Mid-Atlantic Region. “We are proud to have partnered with the U.S. Attorney’s Office for the District of Maryland on this case.”

“This plea illustrates the tremendous harm bank insiders can cause when they use their positions for personal gain, breaking the trust placed in them by their employees, shareholders, and customers,” said Patricia Tarasca, Special Agent in Charge, New York Region, Office of Inspector General for the Federal Deposit Insurance Corporation. “We thank our law enforcement partners and appreciate the cooperation between investigating agencies.”

“Today, another bank CEO pleads guilty to committing fraud against the bank while the bank was in TARP,” said Special Inspector General Christy Goldsmith Romero. “Cecil Bank CEO Halsey pled guilty to conspiracy to commit bank fraud, making false statements in bank records, and receiving a bribe in a fraud that caused losses to Cecil Bank. Taxpayers lost nearly $11 million in TARP when Cecil Bank failed. SIGTARP commends U.S. Attorney Robert Hur and his team for fighting financial fraud related to TARP.”

“OIG and its law enforcement partners are poised to root out fraud and bring wrongdoers to justice,” said SBA Inspector General Hannibal “Mike” Ware. “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

Daniel Whitehurst, age 36, Bel Air, Maryland, pleaded guilty under seal to the federal charge of mail fraud on April 6, 2018. Whitehurst faces a maximum sentence of 30 years in federal prison for conspiracy to commit bank fraud. Judge Chasanow has not scheduled a date for Whitehurst’s sentencing.

United States Attorney Robert K. Hur commended the FHFA-OIG, Mid-Atlantic Region; FDIC/OIG; SIGTARP; and SBA/OIG for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Martin J. Clarke and Harry M. Gruber, who are prosecuting the case

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Businessman Pleads Guilty to Mortgage Fraud

Stephanie Abbott —  July 22, 2020 — 1 Comment

David Daughtrey, 60, El Cajon, California, pleaded guilty in federal court today to bank fraud and tax evasion charges, admitting that over the course of several years he evaded taxes by failing to report $498,612 of income to the IRS, and also orchestrated an illegal scheme to fraudulently obtain a mortgage for his $1.8 million residence using a third party.

Daughtrey admitted that from July 2006 until April 2016, he conspired with others to commit bank fraud and tax evasion. As part of the bank fraud scheme, Daughtrey directed another individual to submit a mortgage application to Wells Fargo to purchase a $1.8 million five-bedroom residence, and to falsely claim that the funds used as down payment belonged to the third party and the residence would be used by the third party.  In reality, Daughtrey provided the funds, and the home was intended to be Daughtrey’s primary residence. Daughtrey made monthly mortgage payments of approximately $8,000 for his residence, but continued to represent to the bank that the third party owned the house.  Daughtrey later submitted a false hardship letter on behalf of the third party in an effort to get the bank to modify the terms of the loan on the home.  As part of the plea agreement, Daughtrey admitted he was the true owner of the residence at all relevant times, and promised to make a good faith effort to transfer the legal ownership of the home into his own name.

Daughtrey also admitted as part his plea that over several years, he and his spouse (who is not charged in the case) conspired to commit tax evasion by filing tax returns listing substantially less income than Daughtrey actually earned.  Daughtrey’s tax return for the year 2012 omitted at least $498,612 in income.  Daughtrey failed to report his total income in tax years 2013, 2014, and 2015, and did not file timely tax returns for subsequent years.  According to the plea agreement, the resulting tax loss to the IRS for the years 2012-2014 was $456,536.   Daughtrey agreed to pay $1,016,457.91 in restitution to the IRS, which includes the total tax loss plus penalties and interest.

As part of his plea agreement, David Daughtrey also agreed to pay over $1 million in restitution to the Internal Revenue Service. He is scheduled to be sentenced on November 16, 2020, before U.S. District Judge Larry A. Burns.

“People who cheat on their taxes are cheating all other law-abiding tax payers,” said U.S. Attorney Robert Brewer. “Mr. Daughtrey blatantly disregarded his tax obligations for years.  The defendant not only abused the tax system for his own financial benefit, but conspired to commit bank fraud in order to maintain this lifestyle.” Brewer commended the excellent work of prosecutor Oleksandra Johnson and FBI and IRS agents.

“The FBI is dedicated to ensuring that white collar crimes are uncovered and prosecuted,” stated FBI Acting Special Agent in Charge Omer Meisel. “Today, David Daughtrey has admitted to mortgage fraud and tax evasion.  This case illustrates that the FBI will continue to investigate those individuals that engage in fraudulent financial schemes that cause harm to our banking industry and defraud the government of tax revenue.”

“Our Nation’s tax system funds critical infrastructures and vital programs, including supporting our citizens and small businesses during the ongoing pandemic,” Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation. “Honest Americans’ compliance with the tax laws is imperative. Rather than pay his fair share, David Daughtrey chose to live lavishly, while intentionally failing to report his true income and evading the payment of over $400,000 in taxes.  Today’s guilty plea demonstrates that the IRS will diligently continue our important enforcement efforts despite the ongoing challenges posed by Covid-19.  We will work alongside our law enforcement partners in a collective effort to enforce the law and ensure the public trust.”

SUMMARY OF CHARGES

Conspiracy to Commit Bank Fraud and Tax Evasion, 18 U.S.C. § 371 (count 1); and

Making a False Tax Return, 26 U.S.C. § 7206(1) (count 2).

Maximum penalty:

Five years’ imprisonment and $250,000 fine (count 1)

Three years’ imprisonment and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest (count 2)

AGENCY

Federal Bureau of Investigation

Internal Revenue Service

 

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Duo Sentenced For Conspiracy To Make False Statements To Banks

Stephanie Abbott —  June 15, 2020 — Leave a comment

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

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

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

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

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

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

 

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A.G. Puts Real Estate Scammers Out of Business

Stephanie Abbott —  March 5, 2020 — 1 Comment

Ruben Diaz and Rodrigo Diaz, who were accused of deceiving dozens of Spanish-speaking consumers in a variety of real estate-related transactions have been put out of business by court order. As a result of the injunctive relief, Ruben and Rodrigo Diaz are banned permanently from advertising, offering, or providing services in connection with the sale, purchase, lease, or financing of real property in Arizona.

The lawsuit filed by the Attorney General’s Office alleged that Ruben and Rodrigo Diaz (father and son team), used several companies, including ProSolutions LLC, to prey upon Spanish-speaking families who wanted to purchase a home. The Defendants promised to find the families homes to purchase and arrange financing. The Defendants then took tens of thousands of dollars in down payments and had Spanish-speaking consumers sign documents in English under false pretenses.

Families who believed they were purchasing a home eventually discovered, sometimes years later, that they were only renters with no equity or ownership rights. In other instances, consumers gave the Defendants thousands of dollars as a down payment for a home, with the promise that it would be returned to them if they did not make a home purchase. In reality, the Defendants spent the down payments and never made the promised refunds.

Ruben and Rodrigo Diaz were not licensed lenders, real estate agents, or mortgage brokers.

In addition, Ruben Diaz owes $425,313 in restitution to consumers, as well as $100,000 in civil penalties to the State.

Attorney General Mark Brnovich made the announcement.

“Buying a home is part of the American dream, but Ruben and Rodrigo Diaz turned that process into a nightmare and robbed dozens of home buyers of that experience,” said Attorney General Mark Brnovich.

Consumers can help protect themselves from real estate and mortgage fraud by working only with licensed professionals and by ensuring that they read and understand contracts before signing them. The public can access the Arizona Department of Real Estate‘s and the Arizona Department of Financial Institutions‘ public databases to determine if a lender or realtor is licensed in the State of Arizona.

Assistant Attorneys General Rebecca Salisbury and Kaitlin Hollywood handled this case.

If you believe you have been the victim of consumer fraud, you can file a consumer complaint by visiting the Attorney General’s website. If you need a complaint form sent to you, you can contact the Attorney General’s Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at (800) 352-8431. Nuestros formularios de quejas están disponibles en inglés o español.

 

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