Archives For False Documents/HUD

Attorney & Settlement Agent Admits Role in Reverse Mortgage Fraud Scheme

Stephanie Abbott —  December 17, 2021 — Leave a comment

Martin D. Eagan, 50, Montville, New Jersey, today admitted his role in a reverse mortgage fraud scheme that exploited several elderly homeowners.

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

Eagan, principal of the Martin D. Eagan Law Firm, was an attorney licensed by the state of New Jersey with a practice in Morristown, New Jersey, that primarily focused on real estate transactions, such as loan originations, reverse mortgages and the refinancing of residential homes.

From 2007 through 2010, Eagan, acting as a settlement agent, was required to comply with instructions established by financial institutions that provided loan funds to borrowers. As part of the lending process, Eagan was required to generate and certify HUD-1 settlement statements that Eagan submitted to lenders. The HUD-1 settlement statement itemized the receipt and disbursement of all funds for each real estate closing. HUD-1 settlement statements were required to be approved by a lender before a settlement agent could disburse funds. The disbursement of funds had to mirror the representations made on the lender-approved HUD-1.

Eagan and his conspirators submitted fraudulent documentation to lenders to persuade lenders to approve and fund reverse mortgages and the refinancing of existing mortgages. Fraudulent documentation submitted included false HUD-1s that concealed from the lenders the fact that disbursements of loan proceeds went to conspirators, or entities the conspirators owned or controlled, and false appraisals that overstated the value of homes.

Eagan, his conspirators, and others controlled the loan application process from the time the homeowners applied for loans to the disbursement of loan funds, and ultimately through the diversion of loan proceeds to conspirators.

Eagan pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit bank fraud.

The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for April 14, 2022.

U.S. Attorney Philip R. Sellinger made the announcement.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.

The government is represented by Special Assistant U.S. Attorneys Kevin Di Gregory and Charlie L. Divine of the Federal Housing Finance Agency, Office of Inspector General.

 

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Real Estate Investment Fraudster Sentenced

Stephanie Abbott —  October 23, 2020 — Leave a comment

Dean Rossi, 55, Warrington, Pennsylvania, was sentenced to five years in prison, four years of supervised release, and was ordered to pay $2.85 million in restitution and $1.38 million in forfeiture for devising and participating in schemes to defraud three financial institutions out of millions of dollars.

Rossi was convicted at trial in March 2018 on seven charges: one count of conspiracy to commit mail fraud affecting a financial institution and bank fraud; one count of mail fraud affecting a financial institution; three counts of bank fraud; and two counts of loan fraud.

From at least December 2006 until about March 2012, Rossi and his co-conspirators participated in schemes to defraud Nova Bank, First Cornerstone Bank, and Leesport Bank, which later became VIST Financial Bank, out of more than $4.15 million in connection with multiple real estate closings for small residential properties in working class neighborhoods in the Philadelphia, Pennsylvania area. In each scheme, the defendant conspired with others to obtain fraudulent mortgage loans and made misrepresentations regarding the disbursement of those funds and his income. The defendant also falsified numerous documents, including tax returns and HUD-1 settlement sheets. Although the banks were able to mitigate some of their fraud losses, the banks and their insurers still suffered losses exceeding $2.85 million. Rossi personally pocketed a total of $1.38 million.

United States Attorney William M. McSwain made the announcement.

“The scope and duration of Rossi’s fraud are simply stunning,” said U.S. Attorney McSwain. “He stole millions of dollars from bank lenders and preyed upon residential neighborhoods – and then attempted to cover his tracks with lies. That sort of white collar crime deserves significant prison time, which is what Rossi has earned.”

“Dean Rossi lied on mortgage applications starting in 2006, his lies and greed helped to contribute to the financial meltdown in 2008,” observed Damon Wood, Inspector in Charge of the Philadelphia Division of the Postal Inspection Service.  “Over ten years later, after being found guilty at trial, he has finally been sentenced to five years in jail.  I want to thank the Postal Inspectors and the Assistant United States Attorneys who stayed with this case for nearly a decade.  The Postal Inspection Service has long history of investigating frauds schemes, and we will continue to lead and support investigations into fraud schemes that use the mail.”

The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorneys Mark Dubnoff and Elizabeth Ray.

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Former State Senator Sentenced For Making False Statement

Stephanie Abbott —  July 14, 2020 — 1 Comment

Wesley T. Bishop, 52, New Orleans, Louisiana was sentenced to four years of probation for making a false statement.

Bishop admitted to knowingly and willfully making a false, material statement to the United States Department of Housing and Urban Development (“HUD”) in connection with rental property that he owned.

As explained by FBI New Orleans Special Agent in Charge Bryan Vorndran, “Former State Senator Bishop made false statements on HUD paperwork which resulted in Bishop receiving a forgivable $188,000 loan under the “road home” program.”

Pursuant to the plea agreement, Bishop has agreed to pay restitution of $188,000 to the State of Louisiana, Division of Administration, Office of Community Development, which administers the subject Small Rental Property Program on behalf of HUD.  In addition to probation, Bishop has been ordered to pay a $100.00 special assessment fee.

U.S. Attorney Peter G. Strasser made the announcement.

U.S. Attorney Strasser praised the work and tireless efforts of the HUD Office of Inspector General and the FBI in investigating, and of Assistant United States Attorney Andre J. Lagarde in prosecuting this matter.

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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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Pair Sentenced For Making False Statements to FHA

Stephanie Abbott —  July 18, 2019 — 2 Comments

Jared Castellaw, 34, Alpine, California, and Valerie Schones, 54, Tucson, Arizona, were sentenced on Wednesday, July 17, 2019 for their role in making false statements to a financial institution.

According to court documents, beginning in or around October 2008 and continuing to on or about May 2009, Castellaw and Schones, along with co-defendant Patrick Healey, made false statements to the Federal Housing Administration “FHA” in order to assist low-income borrowers in qualifying for FHA insured loans that they would not otherwise have qualified for. Healey and Castellaw are former employees of an undisclosed entity, ABC Homes, LLC, located in St. Bernard Parish, Louisiana.  Schones worked for XYZ Financial as a loan officer. In total, due to the acts of the defendants, the FHA suffered a loss in excess of $852,415.

Both Castellaw and Schones were sentenced to time served, supervised release of 5 years, a special assessment of $100, and ordered to pay restitution in the amount of $852,415.16.

U.S. Attorney Peter G. Strasser made the announcement.

U.S. Attorney Strasser praised the work of the Department of Housing and Urban Development, Office of Inspector General and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Sharan E. Lieberman and Edward J. Rivera.

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FHA Mortgage Fraud

3 Pleas in $64 Millon FHA Mortgage Fraud

Rachel Dollar —  July 15, 2015 — Leave a comment

Hector Hernandez, real estate developer and owner of a mortgage company, 57, Miami, Florida; Aleida Fontao, co-owner of a mortgage company, 62, Miami, Florida; and Olga Hernandez, senior mortgage underwriter, 58, Lake Mary, Florida, each pleaded guilty to conspiracy to commit wire fraud affecting a financial institution in connection with an FHA mortgage fraud scheme involving federally insured mortgages that caused losses of $64 million to the Federal Housing Administration (FHA).  Including these defendants, 25 individuals have pleaded guilty to offenses related to this scheme to date..  Hector and Olga Hernandez both pleaded guilty on July 13, 2015, while Fontao pleaded guilty on July 7, 2015.  As part of his plea, Hector Hernandez also agreed to forfeit $8 million, which amounts to his profits from the scheme.

Hector Hernandez’s mortgage company, Great Country Mortgage Bankers, specialized in mortgage loans that were insured by the FHA. Continue Reading…

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Man Admits Using False Documents and Inflated Appraisals to Obtain $1M in Loans

Allison Tussey —  June 3, 2015 — 1 Comment

Grady Wayne Fricks, 65, Nashville, Tennessee, pleaded guilty to conspiracy charges arising out of a scheme to defraud Cornerstone Community Bank, Dalton, Georgia, using false appraisals, settlement statements and misrepresentations to qualify for more than a million dollars in loans.

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Title Agent Gets 5 Years in Prison for Mortgage Fraud

Allison Tussey —  May 19, 2015 — Leave a comment

Ania Nowak, 48, Belvidere, New Jersey, a former real estate title agent was sentenced to 66 months in prison for carrying out a mortgage fraud scheme in which she obtained seven loans, totaling more than $3.7 million, on two properties located in Wood-Ridge, New Jersey and Belvidere, New Jersey.

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6 Indicted for Mortgage Fraud Involving Fraudulent Loan Applications

Allison Tussey —  April 8, 2015 — Leave a comment

Six individuals were indicted for participating in a mortgage fraud conspiracy involving alleged misrepresentations to the banks including fictitious verifications of false and fraudulent employment and bank deposit information set forth on loan applications.  Continue Reading…

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Former Title Insurance Agent Pleads Guilty to Stealing Escrow Funds

Allison Tussey —  April 7, 2015 — Leave a comment

Carole Tilghman, 50, Baltimore, Maryland, a title insurance agent who took tens of thousands of dollars from her clients’ escrow accounts to pay her personal bills pleaded guilty in the Circuit Court for Baltimore County to one count each of felony theft and felony theft scheme.

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