Archives For foreclosure fraud

Francisco Javier Gonzalez, a/k/aJavier Gonzalez,” 46, Duncanville, Texas, was sentenced yesterday to 60 months in federal prison and ordered to pay $611,740.55 in restitution for his role in a scheme to defraud numerous homeowners, banks and the Department of Housing and Urban Development, (HUD).

Gonzalez pleaded guilty in September 2017 to one count of mail fraud, stemming from his work at the Dallas County Community Action Committee, Inc. (DCCAC), a non-profit entity accredited by HUD to provide housing counseling.  Gonzalez has been in custody since his arrest in October 2016. http://www.mortgagefraudblog.com/?s=Francisco+Javier+Gonzalez

According to the plea agreement factual resume filed in the case, Gonzalez served as a Vice President and Director for DCCAC, and leased space in the DCCAC offices for another entity, known as Residential Counseling FJ LLC.

While working in the DCCAC building, Gonzalez falsely claimed he was certified by HUD to provide foreclosure counseling assistance.  Gonzalez sought out victims looking for mortgage loan and foreclosure prevention assistance and would then meet these victims in the DCCAC offices or in their homes.

Additionally, as stated in the plea agreement factual resume, Gonzalez prepared and submitted incomplete and false mortgage assistance applications for the victims.  Gonzales instructed the victims to not communicate with the banks, as this would prevent him from effectively obtaining the loan modification.  Additionally, Gonzalez required lump sum payments for his supposed assistance; and instructed the victims to make mortgage payments directly to him indicating he would forward these payments to the bank.

Gonzalez did not submit the monies he was paid by the victims to the banks, but instead used the money for his own personal expenses.

The announcement was made by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland; and Carrol Antonio Jackson, a/k/a Jack Jackson, 48, Hinesville, Georgia, were convicted on June 20, 2018 of conspiracy and mail and wire fraud charges in connection with a foreclosure prevention fraud scheme.

According to the evidence presented at the eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland.  Welsh was the president, vice president, and director of MJLAG.  Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.

The evidence showed that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes.  Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders.  Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.

Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.”  The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU.  Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, and to stop paying their mortgages.  Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes.  Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.

The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients.  The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.

The defendants each face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and 20 years in prison for each of ten counts of wire fraud.  U.S. District Judge Roger W. Titus has scheduled sentencing for September 28, 2018 at 9:00 a.m.

After the verdict was announced, U.S. District Judge Roger W. Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.

The conviction was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes.  This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets.  Information about mortgage fraud prosecutions is available http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.

United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who are prosecuting the case.

 

Hollie Darlene Dustin, 60, Punta Gorda, Florida has pleaded guilty to wire fraud. She faces a maximum penalty of 20 years in federal prison.

According to the plea agreement, Dustin, a licensed real estate broker, owned Home Choice Real Estate (HCRE), a company that contracted with the Federal National Mortgage Association (Fannie Mae) to manage and perform preservation services on various Fannie Mae foreclosed properties and potentially list those properties for sale. As part of a Master Listing Agreement with Fannie Mae, Dustin’s company was prohibited from using any vendors that she controlled or with which she had a conflict of interest to perform preservation services on Fannie Mae properties. Dustin fraudulently used ProPreserve, a company that she controlled, to perform preservation services on the properties without Fannie Mae’s knowledge or consent. Dustin submitted approximately 550 fraudulent ProPreserve invoices to Fannie Mae requesting approximately $146,280.46, which Fannie Mae paid to HCRE.

Dustin also created inflated ProPreserve invoices for work already performed by other vendors, then submitted those false invoices to Fannie Mae for payment.  Dustin used interstate wires to submit the fraudulent invoices to Fannie Mae.

Dustin’s sentencing hearing is scheduled for September 17, 2018.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General. It is being prosecuted by Assistant United States Attorney Jeffrey F. Michelland.

Michael Rubino, 59, Clearwater, Florida, was sentenced today to 13 months in federal prison for bankruptcy fraud and equity skimming.

According to court documents, Rubino devised a scheme to defraud mortgage lenders that were holding recorded mortgage notes, as well as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Housing Agency (“FHA”), which guaranteed the mortgage notes. In furtherance of his scheme, Rubino searched Pinellas County Clerk of Court records to find properties in various stages of foreclosure. He then contacted distressed homeowners who had already defaulted on their mortgages and had vacated their properties. Rubino offered to take control of, manage, and rent the properties to new tenants. Rubino told the homeowners that he would use the rental income he obtained to pay the mortgages and, in some instances, pay the homeowner a portion of the rent he collected. At no time did Rubino hold any legal or equitable interest in these properties, or have authorization from the mortgage lenders, Fannie Mae, or FHA, to rent out the properties. Further, he failed to remit any of the collected rent monies to FHA, as required by law.

Additionally, in order to prevent Fannie Mae and the mortgage lenders from lawfully foreclosing on properties secured by mortgage notes, Rubino engaged in a bankruptcy fraud scheme whereby he filed fraudulent bankruptcy petitions in the names of the distressed homeowners, without their knowledge or consent, just prior to the scheduled foreclosure sale. These fraudulent bankruptcies triggered the automatic stay provision of the bankruptcy code, preventing the mortgage note holders from conducting the foreclosure sale. The fraudulent bankruptcy petitions filed by Rubino allowed him to continue to collect rent monies to which he was not entitled.

Rubino had pleaded guilty on January 31, 2018.

This case was investigated by the U.S. Department of Housing and Urban Development – Office of Inspector and the Federal Housing Finance Agency – Office of Inspector General. The Office of the U.S. Trustee for the Middle District of Florida also provided substantial assistance. It was prosecuted by Special Assistant United States Attorney Chris Poor.

Christopher Coburn, 33, Winter Garden, Florida was indicted today on six counts of bankruptcy fraud. If convicted, he faces a maximum penalty of 30 years in federal prison.

According to the indictment, Coburn solicited homeowners whose mortgages were in default and offered to rescue their homes from foreclosure. In order to prevent the Federal National Mortgage Association (“Fannie Mae”) and multiple financial institutions holding mortgages from lawfully foreclosing on homeowners’ properties, Coburn engaged in a bankruptcy fraud scheme whereby he filed or caused to be filed fraudulent bankruptcy petitions in the name of homeowners, without their knowledge or consent, just prior to the scheduled foreclosure sale dates. These fraudulent bankruptcies triggered the automatic stay provision of the bankruptcy code, preventing Fannie Mae and the financial institutions from conducting lawful foreclosure sales and obtaining title to the properties. The fraudulent petitions enabled Coburn to collect fees and allowed him to refer the properties to real estate agents in order to obtain ill-gotten referral fees.

United States Attorney Maria Chapa Lopez made the announcement.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Housing Finance Agency, Office of Inspector General. The Office of the United States Trustee for the Middle District of Florida (Orlando Division) also provided substantial assistance. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

 

On May 18, 2018,  Attorney General Bob Ferguson filed a lawsuit against Kirkland and Portland, Oregon based Real Estate Investment Network, LLC (REIN), a company accused of scamming foreclosed homeowners out of equity in the form of surplus funds from the foreclosure sale to halt its deceptive practices while the state’s lawsuit progresses. REIN had been charging up to 67 percent of surplus funds it recovers for homeowners following a foreclosure sale. These fees amounted to tens of thousands of dollars for each homeowner.

With the real estate market booming, foreclosure sales can bring in more money than is owed on the mortgage. Homeowners can often recover these “surplus funds” through a relatively simple process with the court.

REIN approached foreclosed homeowners soon after the foreclosure sale, before they receive notice that surplus funds are available.

REIN’ misrepresented  the process for recovering surplus funds, telling consumers the process could take up to a year and will be near impossible without their help. REIN then offered to help the consumer recover the funds in exchange for a fee, but presented documentation giving REIN all the rights to the surplus funds. Although REIN returned a percentage of the recovered surplus funds to the consumer, REIN’s cut often exceeded 50 percent of the total recovery and was sometimes as high as 67 percent.

REIN omitted any information about the amount of surplus funds available, which can exceed $100,000. In one instance, the foreclosure sale led to $134,000 in surplus funds, and under the terms of its contract, REIN would recover around $90,000 for its services. In another case, REIN’s contract allowed it to recover about $88,000 of more than $141,000 in surplus funds.

My office is a watchdog for homeowners facing foreclosure,” Ferguson said. “I will hold companies that prey on homeowners facing foreclosure accountable.”

Judge Catherine Moore, a King County Superior Court judge granted an agreed order for a preliminary injunction, which, among other restrictions, prevents REIN from collecting more than the 5 percent allowed by law.

The order prevents REIN from:

  • Making misrepresentations or material omissions to consumers about surplus funds;
  • Charging homeowners more than 5 percent of recovered surplus funds plus reasonable costs not to exceed $225; and
  • Failing to disclose all the information REIN knows about a consumer’s foreclosed property, including the foreclosure sale price, liens on the property and the amount of recoverable surplus funds.

One victim told KING 5 news that when he learned the true amount of the surplus funds available, he thought, “We were getting scammed. Totally.”

Mark Demetri Stein, 38, Carrollton, Texas, appeared in federal court this morning and pleaded guilty to one count of mail fraud.

A federal grand jury in Dallas returned an indictment in December 2016 charging Stein and three others with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013. http://www.mortgagefraudblog.com/?s=Mark+Demetri+Stein  Bruce Kevin Hawkins, 52, Desoto, Texas, Richard Bruce Stevens, 51, San Antonio, Texas, and Christina Renee Caveny, 37, Dallas, Texas have pleaded guilty to their roles in the scheme. Hawkins and Caveny have been sentenced to 41 months and 15 months in federal prison, respectively. Stevens is scheduled to be sentenced before U.S. District Judge David C. Godbey on May 7, 2018.

According to documents filed in the case, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, as foreclosure rescue companies.  The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive a new home loan with a reduced interest payment and reduced monthly payment.  Hawkins and other conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage.  They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.

Furthermore, Hawkins and other conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.

As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders.  As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”

Further, according to plea documents, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property.  The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners.  In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct.  Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.

The defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.

Stein faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine.  Restitution could also be ordered.  Stein will remain on bond pending sentencing which will be set at a later date.

U.S. Attorney Erin Nealy Cox of the Northern District of Texas made the announcement.

This case is one of many felony indictments of bankruptcy-related crimes prosecuted as part of the Bankruptcy Fraud Initiative, United States Attorney’s Office, Northern District of Texas.  These bankruptcy prosecutions were a part of a larger number of criminal referrals regularly made to this office by the United States Trustee’s Office, Dallas, Texas.  Since 2013, these focused prosecutions have resulted in 25 convictions of individuals engaged in various types of fraudulent conduct within the United States Bankruptcy Courts.

The Dallas FBI investigated the case.  Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

David Lyle Morgan, 53, Tampa, Florida, has been charged with two counts of bankruptcy fraud and one count of falsification of records in a bankruptcy proceeding. If convicted, he faces a maximum penalty of 30 years in federal prison.

According to the indictment, Morgan, a licensed realtor, entered into a contract with a homeowner to sell a property in foreclosure. In order to prevent the Federal National Mortgage Association (“Fannie Mae”) from lawfully foreclosing on the homeowner’s property, Morgan engaged in a bankruptcy fraud scheme whereby he filed fraudulent bankruptcy petitions in the homeowner’s name, without the homeowner’s knowledge or consent, just prior to the scheduled foreclosure sale dates. These fraudulent bankruptcies invoked the automatic stay provision of the bankruptcy code and prevented Fannie Mae from conducting the sale and obtaining title to the property. They also allowed Morgan to continue his efforts to sell the property to obtain illegal real estate commissions.

The indictment further alleges that Morgan made false declarations on a fraudulent bankruptcy petition that he had filed in the name of the homeowner, impeding the proper administration of a bankruptcy proceeding.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

United States Attorney Maria Chapa Lopez made the announcement.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General. The Office of the United States Trustee for the Middle District of Florida (Tampa Division) also provided substantial assistance. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

Tyler Korn, 28, St. Ann, Missouri, pleaded guilty Monday to charges he and his accomplices swindled homeowners facing foreclosure with false promises to help them save their homes.

In his plea, he admitted he and co-defendants used the address of a UPS store in Overland Park, Kansas, to form Reliant Home Financial Group, a company they operated out of the St. Louis, Missouri metro area.

The indictment alleges the defendants took money from victims and fraudulently promised to:

  • Lower their interest rates.
  • Lower their monthly payments.
  • Help them obtain loan modifications.

When victims received foreclosure notices, the defendants advised them not to worry about it.

Other defendants include:

Amjad Daoud, 33, Lutz, Florida, who is awaiting trial.

Ruby Price, 73, Bonner Springs, Kansas, who is awaiting sentencing.

Korn will be scheduled for sentencing later. He faces up to 20 years in federal prison and a fine up to $1 million on each count.

U.S. Attorney Tom Beall made the announcement.

Beall commended the U.S. Department of Housing and Urban Development – Office of Inspector General, the Federal Housing Finance Agency – Office of Inspector General, the Johnson County District Attorney’s Office, Special Assistant U.S. Attorney Emilie Burdette and Assistant U.S. Attorney Jabari Wamble for their work on the case.

 

Jamie Matsuba, 33, Chatsworth, California and her father, Thomas Matsuba, 67, Chatsworth, California, managers of foreclosure rescue companies, were both convicted today for their roles in a foreclosure rescue scheme.

They were convicted after a one-week trial of one count of conspiracy to commit wire fraud, making false statements to federally insured banks and committing identity theft. In addition, both defendants were convicted of one count of making false statements to federally insured banks.

According to evidence presented at trial, from January 2005 to August 2014, Jamie Matsuba, Thomas Matsuba and others engaged in a scheme to defraud financially distressed homeowners by offering to prevent foreclosure on their properties through short sales. Instead, the conspirators rented out the properties to third parties, did not pay the mortgages on the properties, and submitted false and fraudulent documents to mortgage lenders and servicers to delay foreclosure. The evidence further established that the conspirators obtained mortgages in the names of stolen identities. In addition, the defendants used additional tactics, including filing bankruptcy in the names of distressed homeowners without their knowledge and fabricating liens on the distressed properties, the evidence showed.

Sentencing has been scheduled for May 14, 2018 at 10 a.m., before U.S. District Judge R. Gary Klausner, who presided over the trial.

Three other defendants have been charged in this matter. Defendant Dorothy Matsuba, 66, Chatsworth, California, who is the mother of Jamie Matsuba and wife of Thomas Matsuba, and her daughter, Jane Matsuba-Garcia, 41, Camarillo, California, previously pleaded guilty and are awaiting sentencing. Defendant Young Park, Los Angeles, California, is a fugitive. In addition, in related cases, Jason Hong, 36, Chatsworth, California and Ryu Goeku, 47, Canoga Park, California, previously pleaded guilty and are awaiting sentencing.http://www.mortgagefraudblog.com/?s=Jamie+Matsuba

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Division, Special Agent in Charge R. Damon Rowe of Internal Revenue Service Criminal Investigation’s (IRS-CI) Los Angeles Field Office, Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency-Office of Inspector General (FHFA-OIG), and Sheriff Jim McDonnell of the Los Angeles County Sheriff’s Department made the announcement.

This case was investigated by the FBI, IRS-CI, FHFA-OIG and the Los Angeles County Sheriff’s Department. Trial Attorney Niall M. O’Donnell, Senior Litigation Counsel David A. Bybee and Trial Attorney Jennifer L. Farer of the Criminal Division’s Fraud Section are prosecuting the case. Senior Trial Attorney Nicholas Acker previously worked on the

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.