Archives For False Documents

Phillip Yoder, 41, Ligonier, Indiana, was sentenced on his guilty pleas to wire fraud, bank fraud, mail fraud and bankruptcy fraud.

According to his plea agreement, beginning in or about 2014 and continuing until in or about July 2015, Yoder and others, sometimes working through the entity, KOH Enterprises, LLC, defrauded persons via a “Foreclosure Rescue Scheme.” As part of the scheme to defraud, Yoder and others monitored foreclosure notices of properties, and would then approach distressed homeowners and convince them to transfer title of the property in exchange for false promises of being able to avoid further foreclosure obligations. They falsely represented to these homeowners that they would handle their mortgage arrearages and the foreclosure process.  Because of these false representations, the homeowners vacated the property and transferred their interest in the property through a Quitclaim deed to business entities. Those entities then furthered the scheme by recording the Quitclaim at the local Recorder’s Office. However, the Quitclaim deed did not extinguish the homeowner’s outstanding mortgage debt.  Yoder and others would use the mail to send a fraudulent document, entitled an “International Promissory Note”, purporting to satisfy the outstanding mortgage debt to the financial institution holding the mortgage.  Simultaneously, Yoder and others would cause a fraudulent “Satisfaction of Mortgage” to be filed with the county recorder’s office in an attempt to discharge the mortgage.  They would then convey another Quitclaim deed to an investor or purchaser of the properties, even though the property was still encumbered.   The total loss to investors and insurers was $1,466,136.20.

With regard to the bankruptcy fraud, which resulted from a referral by the U.S. Trustee for Region 10, according to his plea agreement, on or about February 24, 2016, Yoder knowingly and fraudulently made a material false declaration, certificate and verification under the penalty of perjury in his bankruptcy proceeding.  He claimed as an asset a “Billion dollar gold bond” when he knew that the purported bond was fraudulent and worthless.  In his bankruptcy proceeding, Yoder claim $792,592.46 in debts.

Yoder was sentenced to serve 87 months each on the mail fraud, bank fraud, and mail fraud counts, and 60 months on the bankruptcy fraud count, all to run concurrently.   Yoder also was sentenced to two years of supervised release and ordered to pay a total of $581,386.04 in restitution.

The announcement was made by U.S. Attorney Kirsch.

Creating a scheme that enriches the defendant while defrauding banks, insurers and average home owners, jeopardizes our financial system,” said U.S. Attorney Kirsch.  “My Office in coordination with all our law enforcement partners will continue to aggressively prosecute these type of cases.

Everyone has the right to expect honest representation from those they do business with.  Targeting homeowners with this type of fraudulent activity when they are already dealing with financial hardship is not only illegal but a violation of trust and won’t be tolerated by the FBI,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division.  “The FBI and our law enforcement partners will continue to investigate and pursue those who try to line their pockets at the expense of others and hold them accountable.”

HUD Special Agent in Charge Geary stated, “At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those resources are completely dedicated to those in need. The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Single Family housing programs.

Today’s sentence sends a strong message to those who abuse the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Indiana and Southern and Central Illinois (Region 10).  “Providing false documents such as fictitious “bonds” to the United States Bankruptcy Court undermines the integrity of the system and will not be tolerated.  We appreciate the commitment of U.S. Attorney Kirsch and our law enforcement partners to holding those who abuse the bankruptcy system accountable.  We welcome information that will help detect fraud and abuse in the bankruptcy system and we encourage citizens to report suspected bankruptcy fraud through our Internet hotline at USTP.Bankruptcy.Fraud@usdoj.gov.”   The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development’s Office of Inspector General in collaboration with the Northern Indiana Bankruptcy Fraud Working Group coordinated by the U.S. Trustee.  The case was handled by Assistant U.S. Attorney John M. Maciejczyk.

 

John F. Iacono (also known under the alias Vito Yodice), 46, and Shpresa Gjekovic (also known under the aliases Hope Gjekovic, Hope Iacono, Hope Yodice, and Shpresa Hadzovic), 32 , were sentenced today for defrauding banks throughout New York State and laundering those criminal proceeds to further their scheme.

The co defendants were convicted for mortgage fraud, money laundering and scheme to defraud after a joint investigation by the Office of the Attorney General and the New York State Police revealed that the couple utilized shell companies, forged cashier’s checks, and provided fake bank statements, W2s, paystubs, and tax returns in order to solicit over $1.3 million in loans from multiple upstate New York banks.

According to the indictment and statements made by the prosecutor in court, between April 2016 and March 2017, Iacono and Gjekovic applied for mortgages, a construction loan, personal lines of credit, personal loans, a commercial loan, a debt consolidation loan, and a Home Equity Line of Credit with fraudulent documentation that overstated their income, assets, and source of funds. The couple also created fake entities, including but not limited to JF Iacono, LLC and Iacono, LLC, and purported to have worked for them for years. In reality, these companies were created just days prior to their submissions of applications for hundreds of thousands of dollars in bank funds.

The investigation also revealed that Iacono and Gjekovic supplied over $125,000 in counterfeit cashier’s checks to financial institutions, law firms, title companies, and the sellers of a Schoharie County, New York property in order to secure financing and establish residency in the area. The couple allegedly intended to turn the Schoharie County property into a swingers club, but instead rented it out as a hunting cabin while pretending to raise money for children in need. Utilizing online postings, including on Facebook and Airbnb, they advertised the rental property.

The defendants also created a false personal financial statement showing net worth in excess of $1.1 million, with cash on hand of $400,000, while their actual account balances were in the negative. The balances on these statements were grossly inflated, as the couple never had more than a few thousand dollars in the accounts – the vast majority of which was from other loans. To support their claims, Iacono and Gjekovic also supplied fake bank statements showing counterfeit assets.

In addition, Iacono and Gjekovic concealed outstanding judgments against them totaling in excess of $1.4 million from the financial institutions from which they tried to secure loans. Moreover, the couple laundered the fraudulently-obtained loan proceeds to fund real estate transactions, utilizing at least five financial institutions during the course of the year-long scheme. In total, the couple stole over $460,000 from three financial institutions, and attempted to steal over $860,000 in additional proceeds from five financial institutions.

In December 2018, both defendants were arrested on a 19-count indictment charging Residential Mortgage Fraud in the Second Degree, Grand Larceny in the Second and Third Degrees, Money Laundering in the Third Degree, Criminal Possession of a Forged Instrument, Falsifying Business Records in the First Degree, and Scheme to Defraud in the First Degree, among other charges.

On March 29, 2019, Iacono and Gjekovic pleaded guilty before Schoharie County Court Judge George R. Bartlett, III to Residential Mortgage Fraud in the Second Degree (a class C felony), Money Laundering in the Third Degree (a class D felony), and Scheme to Defraud in the First Degree (a class E felony). Iacono and Gjekovic’s pleas resolve additional alleged crimes of money laundering, grand larceny, forgery, and identity theft for which the defendants could have been charged in Albany, Delaware, Greene, Kings, Otsego, Queens, and Rensselaer Counties.

Attorney General Letitia James and State Police Superintendent Keith M. Corlett made the announcement.

Iacono and Gjekovic falsified document after document in order to pad their own pockets,” said Attorney General Letitia James. “Let this serve as a warning to all of those who try to carry out such deliberate schemes: There is no place in this state for individuals who try to cash in at the expense of hardworking New Yorkers. I thank the State Police for their bringing accountability and justice to this elaborate and deceitful plot.”

This couple knowingly defrauded financial institutions and businesses, and preyed on the public’s philanthropy, all to fill their pockets and satisfy their greed,” said New York State Police Superintendent Keith M. Corlett. “This sentencing brings justice and should remind those thinking of carrying out these types of schemes, that you will be held accountable. Thank you to the Attorney General’s Office, our State Police Financial Crimes Unit and other law enforcement partners for their hard work in exposing this plot.”

The case is being prosecuted as part of Attorney General James’ Combatting Upstate Financial Frauds and Schemes (“CUFFS”) Initiative, led by Assistant Attorney General Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative was created to assist local law enforcement and District Attorney’s Offices in the investigation and prosecution of complex financial crimes and money laundering cases such as this one.

Attorney General James thanks the New York State Police Financial Crimes Unit and State Police Bureau of Criminal Investigations, as well as Schoharie County District Attorney Susan J. Mallery for their valuable assistance on this investigation.

This case is being prosecuted by Assistant Attorney General Philip V. Apruzzese, with the assistance of Legal Support Analysts Kira M. Russom, Caitlin Carmody and Samantha Wintner and Supervising Analyst Paul Strocko. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo. The Criminal Division is led by Chief Deputy Attorney General José Maldonado.

The OAG investigation was conducted by Investigator Mark J. Terra, under the supervision of Supervising Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by First Deputy Chief Investigator John Reidy.

 

Richard Earl Jeffcoat, 52, Pelion, South Carolina was sentenced today to six months in federal prison and six months of home confinement after pleading guilty to Conspiring to Commit Bank Fraud.

Facts presented in court established that Jeffcoat is an accountant who was producing false documentation in support of loan applications and giving that information to an Arthur State Bank loan officer.  The officer than facilitated approvals for mortgages and other loans using the fake documents.  Some of the loans were for Jeffcoat’s family members.

Jeffcoat was involved in a total of six loans valued at $529,000.  Several are still current.  The value of the loss-to-date is approximately $45,000.

Senior United States District Court Judge Terry L. Wooten of Columbia imposed the sentence and ordered Jeffcoat to pay over $45,000 in restitution to the victim, Arthur State Bank.

United States Attorney Sherri A. Lydon made the announcement.

The United States Secret Service investigated the case.  Assistant United States Attorney Winston D. Holliday, Jr., of the Columbia office prosecuted the case.

Michael Todd Barrick, aka Kentuckyana Jones, 56, Smiths Grove, Kentucky, pleaded guilty to five counts of bank fraud on Monday.

According to Barrick’s plea agreement and other documents filed in the case, in 2007 Barrick and his co-defendant, Roger Hagan, agreed that Hagan would purchase property at 302 Laurel Street, Smiths Grove, Kentucky from Barrick for $575,000, but Barrick would make all loan payments and keep all rental income.  Hagan did not have sufficient assets and income to qualify for the loan, but at Barrick’s direction Hagan submitted a fraudulent financial statement to American Bank & Trust (AB&T) that substantially overstated Hagan’s assets and income.  Based on these fraudulent representations, AB&T approved Hagan for the loan.  Barrick paid Hagan’s $118,977.50 loan down payment, and gave Hagan $21,422.50 as payment for participating in the transaction.  The loan went into default in November 2010.

In 2008, Hagan entered a similar agreement with Barrick to purchase 708 Kelly Road, Bowling Green, Kentucky for $300,000.  At Barrick’s direction, Hagan again submitted a fraudulent financial statement to PBI Bank.  Based on these fraudulent representations, PBI approved Hagan for the loan.  After the loan closed Barrick paid Hagan $6,534 for participating in the transaction, and the loan went into default in March 2010.

In 2011, Barrick recruited co-defendant Lorri Hughes to purchase a Wholesale Mattress Warehouse (WMW) from Barrick for $179,000.  The WMW was purportedly located at 1700 N. Dixie Highway in Louisville, but in reality a McDonalds restaurant operated at that address, and had been there for many years.  At Barrick’s direction, Hughes submitted a fraudulent financial statement to Monticello Bank that substantially overstated her income and assets.  Based on these fraudulent representations, Monticello Bank approved the loan, and after the loan closed Barrick paid Hughes $20,000 for participating in the transaction.  The loan went into default in February 2012.

In 2010, Barrick recruited T.P. to purchase Som’ Beach Tanning (SBT), a business located at 140 River Place Avenue, Bowling Green, Kentucky from Barrick.  At Barrick’s direction, T.P. submitted a fraudulent financial statement to Monticello Bank that substantially overstated his assets.  The loan was supposed to be collateralized by SBT’s equipment, but Barrick had already used that equipment as collateral in a separate December 2009 loan from BB&T Bank, and that BB&T loan was not satisfied.  Based on these fraudulent representations, co-defendant Garry Hammer, a Monticello Bank loan officer, approved the loan, and after the loan closed Barrick paid T.P. $5,000 for participating in the transaction, but Barrick never surrendered control of the business.

In late 2010, Barrick recruited R.R. to purchase a Mattress City Wholesale (MCW) from Barrick for $179,880.  Under the terms of their agreement, R.R. would own the business on paper and would receive a small percentage of profits, but Barrick would pay the taxes, insurance, and all loan payments, and would receive the majority of profits.  The paperwork Barrick submitted reflected that the MCW was located at 2201 Gallatin Road, Madison, Tennessee.  In reality, a PetSmart was located at that address, and had been there for many years.  Based on these fraudulent representations, Monticello Bank, through co-defendant Garry Hammer, approved the loan.  After the loan closed, Barrick paid R.R. $30,000 for participating in the transaction, and used a significant portion of the remaining proceeds to pay off T.P.’s SBT loan.  The R.R. loan went into default in February 2012.

Barrick’s codefendants, Roger Hagan, Lorri Hughes, and Garry Hammer, all pleaded guilty in April.

Barrick is scheduled to be sentenced by United States District Court Judge Joseph McKinley in Bowling Green on August 15, 2019, at 9:30 a.m., and faces a statutory maximum penalty of 150 years in prison.  Barrick also stipulated to a loss of over $1.4 million. Roger Hagan, Lorri Hughes and Garry Hammer are all scheduled to be sentenced in Bowling Green on July 9, 2019.

The announcement was made by United States Attorney Russell M. Coleman.

This case is being prosecuted by Assistant United States Attorneys David Weiser and Josh Judd and was investigated by the Federal Deposit Insurance Corporation (FDIC) and the FBI.

George French Jones, Jr., 50, Santa Monica, California, was sentenced to 116 months in prison today after previously pleading guilty to mail fraud and identity theft charges in connection with a mortgage fraud scheme involving two waterfront residential properties in Broward County, Florida.

According to information disclosed in open court, in early 2018 Jones identified two residential properties in Fort Lauderdale, Florida, which Jones fraudulently pledged as collateral in order to obtain mortgage loans from a private lender. http://www.mortgagefraudblog.com/?s=George+French+Jones%2C+Jr

The two Broward County properties were owned by corporate entities that Jones had no affiliation with and which were in fact owned by independent third parties. To execute his fraudulent loan scheme, Jones created fake identification documents and email addresses in order to impersonate officers of the corporate owners of the two properties. Jones then submitted bogus loan applications and other documents to a private lender in which he pretended to be the owners of the Fort Lauderdale properties. As a result of this scheme, Jones defrauded the private lender out of approximately $1.7 million dollars.

Jones was also ordered to pay $1,824,581 in restitution.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) made the announcement.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI.  This case was prosecuted by Assistant U.S. Attorney Christopher Browne.  Assistant U.S. Attorney Nalina Sombuntham is handling the asset forfeiture aspects of the prosecution.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

 

Brian Thomas Sapp, 38, formerly of Alexandria, Virginia was sentenced today to nine years in prison for operating a Ponzi scheme that took in approximately $9 million and defrauded over 20 victims of $1.8 million.

According to court documents, Sapp from 2014 through 2018, committed wire fraud and aggravated identity theft in executing the scheme. Sapp preyed on his closest friends and their families, many of whom described Sapp as a “best friend” and “like a brother.” He caused financial hardship to many victims, including those with special needs children.

To execute the scheme, Sapp set up Novus Properties, claiming he had identified distressed single family homes in the District of Columbia, Maryland and Virginia, which he would purchase and then resell to guaranteed buyers. All he needed was investor funds to finance the property flips. On hundreds of occasions, Sapp fabricated a sophisticated set of interlocking purchase, sale, guarantee, and HUD-1 settlement documents to induce victims to part with money. He stole real identities of sellers and buyers and digitally forged their signatures hundreds of times. Sapp bragged that he was “killing it” and “dominating the market.” In reality, he never closed a single deal.

Instead, Sapp used investor money to fund a lavish lifestyle, including golf trips, meals out, and attending wealth-building seminars. Sapp spent $80,000 to purchase and customize a Mercedes van that he outfitted with special rooftop satellite TV antennas and flat screen TVs. Sapp loaded the van with professional grilling equipment, tents, food and beverage service stations, and other amenities so that he could host elaborate tailgating parties at Penn State football games, where he ate and drank with his victims at their expense, unbeknownst to them at the time.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Matthew J. DeSarno, Special Agent in Charge, Criminal Division, FBI Washington Field Office, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorney Russell L. Carlberg prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-446.

Erik Hermann Green, 37, Roseville, California was found guilty on Tuesday of three counts of wire fraud in a mortgage fraud scheme.

According to evidence presented at trial, Green was part of a large-scale mortgage fraud scheme to defraud the New Century Mortgage Company by submitting false documentation about employment, income and assets, including fraudulent loan applications and other altered bank documents. Around October 2006, when Green submitted his fraudulent loan applications to obtain a loan for $820,000, he was a licensed real estate sales person and managed approximately 15 loan officers. As part of the scheme, Green received a check for $100,000 that was funneled through a shell company at the close of escrow. Green used the funds for personal expenses.

Co-defendants Stephen Pirt and Janis Pirt previously pleaded guilty to wire fraud. Stephen Pirt was sentenced in 2015 to 25 months in prison and in 2014, Janis Pirt was sentenced to five years of probation with a year of home detention.

Green is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on June 13, 2019. Green faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

U.S. Attorney McGregor W. Scott made the announcement.

This case is the product of an investigation by the IRS Criminal Investigation and the Alameda County District Attorney’s Office. Assistant U.S. Attorneys Michael D. Anderson and Miriam R. Hinman are prosecuting the case.

 

Rafael Peralta, 46, Clifton, New Jersey, and Philip Puccio Jr., 40, Mahwah, New Jersey were arraigned today for their respective roles in a reverse mortgage scheme that took advantage of several elderly homeowners.

According to documents filed in this case and statements made in court:

From November 2007 through December 2010, Peralta and Puccio, home repair contractors, allegedly conspired to fraudulently obtain Home Equity Conversion Mortgage (HECM), also known as reverse mortgage, proceeds by submitting inflated and fraudulent documentation to various victim banks to influence their decision to approve and fund HECMs. Peralta and Puccio recruited a conspirator to prepare inflated real estate appraisals that falsely increased the value of the properties securing the HECMs, thereby influencing each lender’s decision to provide loans in amounts greater than what would otherwise be available.

Peralta and Puccio also caused the submission of false and fraudulent loan documents that actively concealed the disbursement of loan proceeds to Peralta, Puccio, and entities they owned and controlled. The diverted loan proceeds were deposited into bank accounts controlled by Peralta and Puccio and used for their personal benefit and to further the conspiracy.

Peralta and Puccio Jr., were indicted February 8, 2019, by a federal grand jury on one count of conspiracy to commit bank fraud and six counts of bank fraud. They were arraigned March 15, 2019, before U.S. District Judge Anne E. Thompson in Trenton federal court.

The conspiracy to commit bank fraud and bank fraud charges carry a maximum potential penalty of 30 years in prison, a fine of $1 million, or twice the gross pecuniary gain by the defendants or twice the gross pecuniary loss to others, whichever is greater.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency, Office of the Inspector General, under the direction of Acting Special Agent in Charge Robert Manchak; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; and special agents of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading the charges.

The government is represented by Special Assistant U.S. Attorneys Kevin Di Gregory and Charlie Divine of the U.S. Attorney’s Office Criminal Division in Newark and the Federal Housing Finance Agency, Office of the Inspector General.

 

Patrick Ogiony, 35, Buffalo, New York, pleaded guilty today to conspiracy to commit bank fraud. The charge carries a maximum penalty of five years in prison and a $250,000 fine.

Between March 2011 and June 2017, the defendant conspired with co-defendants Frank Giacobbe, Kevin Morgan, Todd Morgan, and others, to defraud financial institutions, including Evans Bank, N.A.; UBS Securities LLC; M&T Bank; Arbor Commercial Mortgage LLC; SteepRock Capital, LLC; and Berkadia Commercial Mortgage, LLC.

During the course of the conspiracy, Ogiony was employed by Aurora Capital Advisors, LLC, a mortgage brokerage company owned and operated by Frank Giacobbe. Through Aurora, the defendant brokered mortgage loans on behalf of Morgan Management, LLC, a real estate management company that managed over 100 multi-family properties. Kevin Morgan was employed as a Vice President at Morgan Management, and Todd Morgan was employed as a Project Manager.

Ogiony, his co-defendants, and others provided false information to financial institutions and government sponsored enterprises overstating the incomes of properties owned by Morgan Management or certain principals of Morgan Management. The false information induced financial institutions to issue loans: (1) for greater values than the financial institutions would have authorized had they been provided with truthful information; and (2) that the financial institutions would not have issued at the time of issuance had they been provided with truthful information. Ogiony admitted that these properties included:

• The Preserve at Autumn Ridge, Watertown, NY;
• The Eden Square Apartments, Cranberry Township, Pennsylvania;
• The Rochester Village Apartments at Park Place, Cranberry Township, Pennsylvania;
• The Reserve at Southpointe, Canonsburg, Pennsylvania;
• 7100 South Shore Drive Apartments, Chicago, Illinois;
• The Avon Commons Apartments, Avon, NY;
• The Morgan Bay Apartments, Houston, Texas;
• Brookwood on the Green, Syracuse, NY;
• The Creek Hill Apartments, Rochester, NY;
• Hickory Hollow, Rochester, NY;
• The Knollwood Manor Apartments, Rochester, NY;
• The Links at Centerpointe, Canandaigua, NY;
• The Nineteen North Apartments, Pittsburgh, Pennsylvania;
• The Overlook at Golden Hills, Lexington, South Carolina;
• The Penbrooke Meadows Apartments, Rochester, NY;
• The Trails of North Hills Apartments, Raleigh, North Carolina;
• The Rivers Pointe Apartments, Syracuse, NY;
• The Union Square Apartments, Rochester, NY;
• The View at MacKenzi, York, Pennsylvania; and
• The Villas of Victor, Rochester, NY.

In addition, the defendant, his co-defendants, and others employed various mechanisms to mislead financial institutions regarding the properties’ occupancy. Ogiony specifically:

• provided false rent rolls to lenders and appraisers on a variety of dates, overstating either the number of renters in a property, the rent paid by occupants;
• provided or conspired to provide false and inflated income statements for the properties; and
• worked with others to deceive inspectors into believing that unoccupied apartments were, in fact, occupied.

In one such instance, Ogiony and his co-defendants provided false information to Berkadia Commercial Mortgage, LLC, in connection with The Rochester Village Apartments at Park Place, a multi-family residential apartment owned by Morgan Management principals. The information included falsely inflated income from storage unit rentals, false reports of rental income, and falsely reporting apartment units as occupied before certificates of occupancy were obtained for those units.

Also, Ogiony, his co-defendants, and others made misrepresentations and engaged in conduct designed to conceal from the lending financial institutions that they obtained cash from the loan proceeds, which was not used to purchase or maintain the premises. Ogiony, his co-defendants, and others did so by, at times, providing false documentation of obligations purportedly associated with the properties, and by misrepresenting the actual purchase prices of properties.

Defendant Kevin Morgan was previously convicted of conspiracy to commit bank fraud and is awaiting sentencing. Charges remain pending against Frank Giacobbe and Todd Morgan. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent-in-Charge Robert Manchak.

U.S. Attorney James P. Kennedy, Jr. made the announcement.

Sentencing will be scheduled at a later date.

David Plunkett, 53, Lynn, Massachusetts pleaded guilty today to assisting a multi-year mortgage fraud scheme by creating fraudulent tax returns and submitting fraudulent letters to lenders.

George Kritopoulos, 46, Salem, Massachusetts, one of the alleged leaders of the mortgage fraud scheme, was indicted in September 2018, and has pleaded not guilty. Co-conspirator, Joseph Bates III, 38, of Lynnfield, Massachusetts pleaded guilty in October 2018 to one count of conspiracy, three counts of wire fraud affecting a financial institution, and two counts of bank fraud.

According to the charging documents, from 2006 through 2015, Bates and others engaged in a scheme to defraud banks and other financial institutions by causing false information to be submitted to those institutions on behalf of borrowers, people recruited to purchase properties, located primarily in Salem, Massachusetts. The properties were usually multi-family buildings with two-to-four units, which the co-conspirators then converted into condominiums. The co-conspirators recruited other borrowers to purchase the individual condominium units, which were also financed by fraudulent mortgage loans.

The false information submitted to lenders included, among other things, representations concerning the borrowers’ employment, income, assets, and intent to occupy the property. Specifically, the false employment information included representations that borrowers were employed by entities that were, in fact, shell companies used to advance the fraudulent scheme. The employment information included false representations about the income that the borrowers received from the entities, when, in fact, the borrowers received little or no income from them.  Furthermore, the income asserted on the borrowers’ loan applications substantially overstated their true income. The false information also included representations that the recruited borrowers intended to live in the properties that they were purchasing, when the borrowers, in fact, did not intend to do so.

Plunkett assisted the scheme by preparing tax returns for some of the borrowers that contained false and inflated income. Some of those tax returns were submitted to lenders in support of the fraudulent loan applications. Plunkett also signed letters falsely representing that his CPA firm had prepared corporate tax returns for one of the shell entities, when in fact no such returns had ever been prepared or filed.

Because the borrowers did not have the financial ability to repay the loans, in many instances, they defaulted on their loan payments, resulting in foreclosures and millions of dollars of losses to the financial institutions. http://www.mortgagefraudblog.com/?s=David+Plunkett

Plunkett plead guilty to one count of bank fraud and one count of aiding in the submission of false tax returns.

The charge of bank fraud provides for a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million, or twice the gross gain or loss, whichever is greater. The charge of aiding in filing a false tax return provides for a sentence of no greater than three years in prison, one year of supervised release, and a fine of $250,000, or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

U.S. District Court Judge Richard G. Stearns scheduled sentencing for June 25, 2019.

United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeastern Regional Office; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorneys Mark J. Balthazard and Sara Miron Bloom of Lelling’s Securities and Financial Fraud Unit are prosecuting the case.

The details contained in the charging documents are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.