Archives For false income

John F. Iacono, a/k/a Vito Yodice, 46 and Shpresa Gjekovic, a/k/a Hope Gjekovic a/k/a Hope Iacono a/k/a Hope Yodice a/k/a Shpresa Hadzovic, 32, have been charged with defrauding banks throughout New York State and laundering those criminal proceeds to further their scheme.

A joint investigation by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau and the New York State Police revealed that Iacono and Gjekovic allegedly utilized shell companies, provided fake bank statements, W2s, paystubs, and tax returns, and forged cashier checks in order to solicit over $1.3 million in loans from multiple banks across the upstate region.

According to the indictment and statements made by the prosecutor at arraignment, between April 2016 and March 2017, Iacono and Gjekovic allegedly 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 (HELOC) by grossly overstating their income, assets, and source of funds – all supported by fraudulent documentation. The couple also allegedly created 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 submission of applications for hundreds of thousands of dollars in bank funds. 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.

The investigation further revealed that Iacono and Gjekovic allegedly supplied over $125,000 in counterfeit cashiers 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 residence in the area. Iacono and Gjekovic allegedly intended to turn the Schoharie County property into a swingers club, but after obtaining the property, instead rented it out as a hunting cabin and purported to raise money for children in need. The couple allegedly utilized online postings, including on Facebook and Airbnb, to advertise the rental property.

In addition, Iacono and Gjekovic allegedly concealed from financial institutions outstanding judgments against them totaling in excess of $1.4 million. Moreover, the couple allegedly laundered fraudulently obtained loan proceeds to fund deposits and cash to close on the real estate transactions, utilizing at least five financial institutions during the course of the year-long scheme.

The defendants also allegedly created a personal financial statement showing net worth in excess of $1.1 million, with cash on hand of $400,000, while in reality their account balances were in the negative. The defendants allegedly supplied false bank statements showing the purported assets to support this claim. The balances on these statements were allegedly 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.

Both defendants were arrested on a 19-count indictment, including charges of Residential Mortgage Fraud in the Second Degree, Grand Larceny in the Second and Third Degrees, and Money Laundering in the Third Degree.

Iacono and Gjekovic are each charged in the Attorney General’s indictment with the following 19 felonies: Residential Mortgage Fraud in the Second Degree, a class C felony (one count); Grand Larceny in the Second Degree, a class C felony (two counts); Money Laundering in the Third Degree, a class D felony (two counts); Grand Larceny in the Third Degree, a class D felony (one count); Attempted Residential Mortgage Fraud in the Second Degree, a class D felony (one count); Attempted Grand Larceny in the Second Degree, a class D felony (three counts); Criminal Possession of a Forged Instrument, a class D felony (four counts); Falsifying Business Records in the First Degree, a class E felony (four counts); and Scheme to Defraud in the First Degree, a class E felony (one count).

Iacono was arraigned on December 20, 2018 before Schoharie County Court Judge George R. Bartlett, III. Bail was set in the amount of $175,000 cash or $350,000 bond. Gjekovic was arraigned on December 24, 2018 before Hon. Bartlett and bail was set in the amount of $75,000 cash or $150,000 bond. The defendants are scheduled to appear back in court January 16, 2019.

If convicted of all counts, Iacono and Gjekovic could each face up to 10 to 20 years in state prison.

Attorney General Barbara D. Underwood and State Police Superintendent George P. Beach II made the announcement.

As we allege, these defendants grossly inflated their assets and forged a number of documents in order to defraud multiple New York banks and attempt to steal over a million dollars,” said Attorney General UnderwoodWe have no tolerance for those who try to defraud New Yorkers in order to line their own pockets.”

Superintendent George P. Beach II said, “This couple concocted a series of devious schemes to knowingly defraud financial institutions out of hundreds of thousands of dollars. I commend the Attorney General’s Office, our State Police Financial Crimes Unit and other law enforcement partners for their hard work in exposing this fraud. This indictment should serve as a reminder that those who seek to carry out such deliberate scams will be held accountable for their crimes and brought to justice.”

The charges are merely allegations and the defendants are presumed innocent unless and until proven guilty in a court of law.

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

The case is being prosecuted by Assistant Attorney General Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau, with the assistance of Legal Support Analysts Kira M. Russom, Caitlin Carmody, and Supervising Analyst Paul Strocko. 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 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 Alvin Bragg.

 

Bobbie W. Williams, a.k.a. Robert W. Williams, 56, Akron, Ohio was indicted for using a fraudulent Social Security number and falsely overstating his income to obtain a mortgage of more than $300,000.

The indictment alleges Williams falsified information on his loan application in order to secure the purchase of the property located on Ridgewood Road, Akron, Ohio. Then, after Williams could not make the payments on the property and it went into foreclosure, he falsified information in his bankruptcy petition, including his true identity and his ownership of the Ridgewood Road property.

An indictment is only a charge and is not evidence of guilt.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Williams is charged with on one count of bank fraud and two counts of bankruptcy fraud.

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations.  In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.

The matter is being prosecuted by Assistant U.S. Attorney Mark S. Bennett, and Special Assistant U.S. Attorney Amy Good, Trial Attorney, United States Trustee, after an investigation conducted by the U.S. Department of Housing and Urban Development, Office of Inspector General and the Cleveland office of the Federal Bureau of Investigation.

Wells Fargo Bank, N.A. and several of its affiliates (Wells Fargo) will pay a civil penalty of $2.09 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on the bank’s alleged origination and sale of residential mortgage loans that it knew contained misstated income information and did not meet the quality that Wells Fargo represented. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in residential mortgage-backed securities (RMBS) containing loans originated by Wells Fargo.

FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate criminal offenses, including wire and mail fraud. The United States alleged that, in 2005, Wells Fargo began an initiative to double its production of subprime and Alt-A loans. As part of that initiative, Wells Fargo loosened its requirements for originating stated income loans – loans where a borrower simply states his or her income without providing any supporting income documentation.

To evaluate the integrity of its increasing volume of stated income loans, Wells Fargo subjected a sample of these loans to “4506-T testing.” A 4506-T form is a government document signed by the borrower during the loan approval process that allows the lender to obtain the borrower’s tax transcripts from the Internal Revenue Service (IRS). 4506-T testing involves comparing the tax transcripts of the borrower with the income stated on the loan application. Wells Fargo implemented 4506-T testing on two of its programs. This testing revealed that more than 70% of the loans that Wells Fargo sampled had an “unacceptable” variance (greater than 20% discrepancy between the borrower’s stated income and the income information reflected in the borrower’s most recent tax returns filed with the IRS), and the average variance was approximately 65%. After receiving these results, Wells Fargo conducted further internal testing. This additional testing, performed by quality assurance analysts, was designed to determine if “plausible” explanations existed for the “unacceptable” variances over 20%. This additional step revealed that nearly half of the stated income loans that Wells Fargo tested had both an unacceptable variance and the absence of a plausible explanation for that variance.

The results of Wells Fargo’s 4506-T testing were disclosed in internal monthly reports, which were widely distributed among Wells Fargo employees. One Wells Fargo employee in risk management observed that the “4506-T results are astounding” yet “instead of reacting in a way consistent with what is being reported WF [Wells Fargo] is expanding stated [income loan] programs in all business lines.”

The United States alleged that, despite its knowledge that a substantial portion of its stated income loans contained misstated income, Wells Fargo failed to disclose this information, and instead reported to investors false debt-to-income ratios in connection with the loans it sold. Wells Fargo also allegedly heralded its fraud controls while failing to disclose the income discrepancies its controls had identified. The United States further alleged that Wells Fargo took steps to insulate itself from the risks of its stated income loans, by screening out many of these loans from its own loan portfolio held for investment and by limiting its liability to third parties for the accuracy of its stated income loans. Wells Fargo sold at least 73,539 stated income loans that were included in RMBS between 2005 to 2007, and nearly half of those loans have defaulted, resulting in billions of dollars in losses to investors.

The Justice Department made the announcement today .

This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” said Acting Associate Attorney General Jesse Panuccio. “It sends a strong message that the Department is committed to protecting the nation’s economy and financial markets against fraud.

Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans,” said Acting U.S. Attorney for the Northern District of California, Alex G. Tse. “Today’s agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted. Our office is steadfast in pursuing those who engage in wrongful conduct that hurts the public.

The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of California, with investigative support from the Federal Housing Finance Agency, Office of Inspector General.

The claims resolved by this settlement are allegations only, and there has been no admission of liability.

Celia Nipper, aka Celia Arrand, 61, Dublin, California pleaded guilty to committing wire fraud, bank fraud, and filing false tax returns in connection with a scheme to embezzle funds from a real estate technology company.

Nipper admitted in the plea agreement that in June of 2008, on two separate occasions she overstated her income in connection with fraudulent mortgage loan applications.

According to the plea agreement, Nipper admitted that while employed as an office manager, she used her position of financial control at a technology company to redirect funds intended for her employer to accounts that she controlled.  According to the plea agreement, from 2005 to 2011, while Nipper managed her company’s accounts payable and accounts receivable, invoicing, and bill paying she opened bank accounts in the name of her employer without disclosing the existence of the accounts.  She then directed customer payments to those accounts.  Nipper also admitted as part of the plea agreement that she misappropriated funds from her employer’s legitimate corporate bank accounts.  Nipper also admitted she used money belonging to her employer to pay for her own personal expenses and deposited employer funds into her personal bank accounts.  Nipper further acknowledged that her scheme defrauded the company of more than $2 million.

Further, nipper admitted that she filed false U.S. Income Tax Returns for the tax years 2009, 2010, and 2011.  In each case, she understated her income, resulting in a failure to report more than $1 million and a tax loss to the United States of at least $290,000.

On April 7, 2016, a federal grand jury indicted Nipper by superseding indictment, charging her with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of bank fraud, in violation of 18 U.S.C. § 1344(2); and three counts of filing a false tax return, in violation of 26 U.S.C. § 7206(1).  Pursuant to the plea agreement, Nipper pleaded guilty to all seven counts.

Judge Gilliam has scheduled Nipper’s sentencing for February 5, 2018.    The maximum statutory penalties for wire fraud and bank fraud is 20 years in prison, a $250,000 fine, and 3 years of supervised release.  The maximum statutory penalty for filing a false tax return is 3 years in prison, a $250,000 fine and 1 year of supervised release.  Additional fines, forfeitures, and special assessments also may be imposed.

The plea was announced United States Attorney Brian J. Stretch, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett, and Internal Revenue Service (IRS), Criminal Investigation, Special Agent in Charge Michael T. Batdorf.  The plea was accepted by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.  The prosecution was the result of an investigation by the FBI and IRS, Criminal Investigation.

Edgar Avila aka Michael Mendez aka Michael Edgar Avila-Mendez, aka Michael AvMen was indicted on one charge of mail fraud and one charge of bank fraud in connection with two separate fraud schemes.

According to the affidavit in support of the arrest warrant, in January 2014, Avila submitted a loan application to purchase a residence at 2915 Legend Hill Drive, Katy, Texas.  On the application, he represented that he worked for AvMen Entertainment at 924 Town and County 800, Houston for a year and a half as a line producer with a salary of $13,600 per month.  He also stated he attended Devry College of Business from September 2009 through May 2013 to account for his history prior to working at AvMen. Paystubs along with a VOE faxed to the mortgage company confirmed this employment. The officer attesting to the affidavit stated that he was unable to find a legitimate business under the name AvMen and discovered that Avila created the entity as part of his fraud scheme.  An assumed name certificate for AvMen was filed in August 2010 using the same address as listed on Avila’s driver’s license.  The affiant also stated that he confirmed through several sources that Avila and Michael Avmen were the same person. Avila’s disclosed bank accounts did not reveal any income associated with AvMen – nor did they substantiate income nearing $13,000 per month.

To support his claims of attending Devry University, according to the affidavit, Avila submitted a college transcript containing the signature of John J. Getek, as college registrar.  Investigation showed that the Getek was not registrar for Devry, instead, in 2001 he was the Deputy Inspector General of Audit for the U.S. Department of Labor, Office of Inspector General – and Getek’s digital signature was available online from his annual reports to Congress.

In March 2015, according to the affidavit, Avila defaulted on the loan.  In September 2015, the mortgage lender modified the loan and negotiated a payment plan, based on a statement from Avila that he was diagnosed with “cephalic neuralgias” and “Bell’s palsy.”  He claimed his illness caused him to lose his job and that his current job did not pay the same.  The affiant stated that while he could not rule out an illness, Avila was arrested by the Houston Police Department in 2015 “which is the more likely reason for his sudden lack of income.”

The loan was guaranteed by the U.S. Department of Veteran’s Affairs.

The affidavit also details a vehicle related fraud scheme underlying the mail fraud charges where Avila allegedly provided a fake social security card, false Texas driver’s license and fake Devry University transcript to obtain a vehicle loan. According to the affiant, he then cleared title to the vehicle through a mechanic’s lien sale to himself and sold the vehicle to a Lexus dealership.

Jeffrey T. Crothers, 50, Stockton, California, pleaded guilty to conspiracy to commit bank fraud.

According to court documents, Crothers, while working for National City Mortgage in Stockton, conspired with at least one other person to defraud National City Bank, which funded the mortgages. In 2006, Crothers submitted a loan application that falsely represented that the loan applicant was the actual borrower, that the loan applicant’s monthly income was higher than it actually was, and that the property being purchased was to be the loan applicant’s primary residence when it was not. The loan applicant was selected because of his good credit, but was unable to make the monthly payments for the loan.

Crothers also submitted a letter that contained a false explanation as to why the loan applicant was purchasing the property. The false letter was used to satisfy a condition for the issuance of the loan. National City Bank sustained a loss of approximately $87,000.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys John K. Vincent and Christiaan H. Highsmith are prosecuting the case.  The plea was announced by United States Attorney Benjamin B. Wagner.

Crothers is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on May 20, 2016. Crothers faces a maximum statutory penalty of five years in prison and a $250,000 fine.

Ex-NFL Star Irving Fryar Sentenced to 5 Years in Prison in $1.2 Million Mortgage Fraud Case

Randy Platfoot, 54, Clearwater, Florida, pleaded guilty to making false statements in mortgage loan applications.

According to court documents, between September 2005 and April 2007, Platfoot applied for two separate mortgage loans from Washington Mutual Bank, in connection with the purchase of properties in Myakka City, Florida, and Sarasota, Florida. In the loan documents that Platfoot signed and submitted to the bank, he made false statements about his income and about the lack of subordinate financing in connection with one of the properties. Washington Mutual Bank suffered financial losses after Platfoot defaulted on both loans.

Platfood faces a maximum penalty of 30 years in federal prison. His sentencing is scheduled for December 18, 2015.

The announcement was made by United States Attorney A. Lee Bentley, III.  The case was investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation-Office of Inspector General. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.

Moctezuma Tovar, 46, Sacramento, California and Sandra Hermosillo, 53, Woodland, California pleaded guilty to conspiring to commit wire fraud in connection with a mortgage fraud scheme.

According to court documents, Tovar was the founder and president of Delta Homes and Lending Inc., a Sacramento, California based real estate and mortgage lending company. Delta Homes opened one office in 2003 and eventually had five offices in Sacramento and Woodland, California. As the president of Delta Homes, Tovar managed the day-to-day operations of the company and prepared and submitted residential home loan applications on behalf of Delta Homes’ clients. Hermosillo was a loan officer at the Woodland office and was also responsible for submitting residential home loan applications on clients’ behalf. Continue Reading…

Edward Dacy, 77, most recently of West Melbourne, Florida, was sentenced to six years in prison on charges stemming from a multi-million dollar mortgage fraud investment scheme involving 45 properties and $16 million in mortgage loans used for the purchase of residential real estate in the District of Columbia and Maryland.

Dacy was found guilty on March 25, 2015, following a trial in the U.S. District Court for the District of Columbia, of 10 counts of conspiracy, bank fraud, and mail fraud.  His conviction completes a three-year investigation relating to this mortgage fraud scheme. A total of nine individuals have admitted their guilt through guilty pleas or were found guilty after trial. Upon completion of his prison term, Dacy will be placed on three years of supervised release. In addition, Judge Walton ordered that he pay $2,730,345 in restitution and an identical amount as a forfeiture money judgment. Continue Reading…