Archives For foreclosure fraud

Anthony T. Williams, 49, Pineville, Louisiana was sentenced today in federal court to 240 months’ imprisonment for wire fraud and mail fraud in connection with a fraudulent mortgage relief scheme.

Williams marketed a fraudulent mortgage debt reduction scheme to distressed homeowners, who were mostly non-native English speakers in the Filipino immigrant community in Hawaii. Williams created two companies, Mortgage Enterprise Investments (MEI) and Common Law Office of America (CLOA), neither of which was licensed to service or modify mortgages. Through MEI, Williams made conflicting promises to clients that he could eliminate their existing mortgage obligations to their lenders, or reduce their mortgage obligations by half. Through CLOA, Williams promised legal representation in mortgage-related litigation and foreclosure proceedings. To give himself the appearance of credibility, Williams told prospective clients he was a “private attorney general” and brandished an official-looking law enforcement badge and credentials, despite not having a law license or any affiliation with law enforcement.

Williams falsely promised victims that he could eliminate their existing home mortgage obligations by filing bogus documents with the Hawaii Bureau of Conveyances. These documents included new MEI mortgages and notes obligating homeowners to make monthly payments to MEI. Williams then advised homeowners to stop making their mortgage payments to their lenders and to pay him instead.

Between 2012 and 2015, Williams enlisted 112 victims in Hawaii into his MEI program and fraudulently obtained over $230,000 from his victims, without providing any legitimate services. Several victims testified at trial that they had relied upon Williams’s representations and went into foreclosure or bankruptcy. Two victims testified that they lost their homes as a result of Williams’s scheme.

For several years, Anthony Williams actively preyed upon distressed homeowners within the Filipino community here in the State of Hawaii. His scheme financially devastated his victims, forcing some into bankruptcy and homelessness. As a result of this prosecution, Williams’s scheme has come to an end and Williams will be incarcerated for 20 years. My office will continue to protect the most vulnerable members of our community,” said U.S. Attorney Price.

Williams knowingly targeted and preyed upon citizens of our Filipino community” said Eli Miranda, Special Agent in Charge of the FBI’s Honolulu Division. “He took advantage of this vulnerable and in need population, delivering empty promises. He drained their finances leaving many penniless. The FBI cannot, and will not stand by. We will continue to maximize our efforts with partner agencies to bring these perpetrators to justice and hold them accountable for their crimes.

A federal jury convicted Williams on March 3, 2020 of 32 counts of wire fraud and mail fraud after a four week trial.

In addition to a term of imprisonment, the Court also imposed three years of supervised release, and restitution. The Court’s sentence of imprisonment is to run consecutively to a fifteen-year sentence of imprisonment that another court had handed down earlier to Williams for similar fraudulent conduct in the State of Florida.

The investigation was led by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kenneth M. Sorenson and Gregg Paris Yates handled the prosecution.

 

Dana Q. Roush, 40, and her husband Michael “Bubba” Roush, 56, both of Greenville, South Carolina were sentenced to a total of seventeen years in federal prison and ordered to pay back more than $2.5 million after a jury found them guilty of conspiracy to commit mail fraud and equity skimming.

Evidence presented at trial showed that Dana and Bubba Roush owned and operated Kingdom Connected Investments, LLC (“KCI”).  They marketed their company as a Christian organization and promised to create “win-win” situations for home sellers and buyers. They sought homeowners who often owed more on their home than the property was worth, and buyers who lacked good credit and thus could not obtain a conventional mortgage.

KCI promised to relieve the homeowner from the burdens of mortgage payments by “buying” the home and placing a new buyer in the home who would rent-to-own.  KCI promised to make all the sellers’ mortgage payments.  KCI misled sellers to believe that they would be immediately removed from the property’s title and that they were no longer responsible for the original loan.

KCI promised the buyers an easy road to homeownership.  In exchange for the down payment (typically ten percent of the purchase price), the buyers were told that they were renting-to-own and building up equity.  KCI further concealed from the buyers that a third party – the seller – had an existing mortgage on the property that KCI was responsible for paying.

Rather than using the down payments and rents received from the buyers to pay the sellers’ mortgage payments, Bubba and Dana Roush used the money for personal expenses and to expand their real estate business.

The sellers, many of whom believed they were off the title and note, received foreclosure notices.  They learned that KCI, despite having a renter in the home, had stopped paying on the mortgage.  Buyers often learned they had no real ownership interest when the home was purchased by a third-party at a foreclosure sale and the new owner started eviction proceedings.

Victims of the scheme suffered myriad injuries including loss of money, shattered dreams, and ruined credit.  Special Agent Matt Jacobson of the Federal Bureau of Investigation (FBI) testified that KCI received $2.6 million from buyers and only paid $1.4 million in mortgage payments.  Approximately 130 properties were involved in the scam and Agent Jacobson testified that in only two instances did a buyer actually become a homeowner and a seller not face foreclosure and ruined credit.

Mrs. Roush was sentenced to more than eleven years, while her husband was sentenced to six and a half years.

United States Attorney Peter M. McCoy, Jr., made the announcement.

These defendants here stole more than money. They robbed their victims of the American dream,” said U.S. Attorney McCoy. “For so many South Carolinians, times are tough right now. That these two defendants exploited that difficulty to line their own pockets is reprehensible, and this office will not tolerate it. I appreciate the jury’s verdict and the sentence handed down by the judge. I am especially thankful for the hard work form our federal partners in this case.”

The fraud perpetrated by the defendants allowed them to steal millions of dollars from people who could not afford to lose any money,” said FBI Special Agent in Charge Jody Norris.  “The victims were robbed of their life savings, their homes, and the futures they had planned.  The Special Agents from the FBI and the investigators from the Department of Housing and Urban Development (HUD) who brought these defendants to justice, should be commended for their dedication and demonstration of our resolve to fully investigate these fraudulent schemes in South Carolina.

The core of our mission is to protect the Department of Housing and Urban Development from those that would seek to defraud its programs for the sole purpose of enriching themselves at the government’s expense,” said Wyatt Achord, Special Agent in Charge, HUD Office of Inspector General (OIG). “We remain committed toward working with the U.S. Department of Justice to pursue any individual who attempts to defraud the government.

United States District Judge Timothy M. Cain sentenced Mrs. Roush to 136 months in federal prison, to be followed by a three-year term of court-ordered supervision. Judge Cain sentenced Mr. Roush to 78 months in federal prison, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system. Judge Cain also ordered the defendants to pay $2,664,796.69 in restitution.

The case was investigated by the FBI and HUD OIG. Assistant U.S. Attorney Bill Watkins

 

James Lee Clark, 59, Wilton Manor, Florida has been charged with one count of conspiracy to commit bankruptcy fraud, seven counts of bankruptcy fraud, one count of making a falsification of records in a bankruptcy proceeding, and eight counts of wire fraud.

According to the indictment, from January 2010 through February 2017, Clark conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors, such as Fannie Mae, who were holding mortgage notes on properties that were in foreclosure. The indictment further charges that Clark and Liebman falsely and fraudulently represented to the distressed homeowners facing foreclosure that, in exchange for executing quitclaim or warranty deeds for their properties to an entity controlled by Liebman, they would negotiate with the mortgage creditors to prevent foreclosures. Clark and Liebman convinced the distressed homeowners to pay them rent, or agree to put their houses up for sale. In order to continue to collect ill-gotten rents, or profit from the sale of the properties, Clark allegedly filed fraudulent bankruptcy petitions in the names of the homeowners to prevent the mortgage creditors from lawfully foreclosing and taking title to the property. In some instances, Clark filed multiple fraudulent petitions in the names of distressed homeowners.

Additionally, it is further alleged that, from January 2012 to February 2017, Clark, who was a licensed attorney, defrauded his clients out of approximately $1.3 million. As part of his practice, Clark would act as a trustee for his clients and also hold their money in various bank accounts depending on the purpose of trust.  Instead of using the funds for the purpose intended by his clients, Clark would divert the money into his law firm’s bank accounts and pay for personal expenses, such as gambling, travel, and automobiles.

Liebman pleaded guilty to one count of conspiracy to commit bankruptcy fraud on September 24, 2019. His sentencing hearing is scheduled for January 14, 2021.

United States Attorney Maria Chapa Lopez made the announcement.

If convicted, Clark faces up to 20 years’ imprisonment for the falsification of records count and for each wire fraud count. He faces up to 5 years in federal prison for the conspiracy count, and for each bankruptcy fraud count. The indictment also notifies Clark that the United States is seeking a money judgment of $1.3 million, the proceeds of the charged criminal conduct.

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 Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. The Office of United States Trustee for the Middle District of Florida, Tampa Division provided substantial investigative assistance. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

 

Vision Property Management, LLC, a South Carolina based real estate company, its CEO Alex Szkaradek, and a number of affiliated companies have agreed today, subject to court approval, that more than $3.75 million will be paid in consumer restitution for engaging in and operating an illegal, deceptive, and unlicensed mortgage-lending business that targeted, among others, the disabled, the elderly, single parents, and others living on fixed incomes.

Specifically, the settlement includes cash payments of $600,000 that will be distributed to numerous New York consumers who were victims of Vision’s conduct and have, for the most part, moved out of their previous homes. Additionally, more than $3.15 million in unpaid principal for 58 homes will be forgiven by Vision as restitution. The ownership of these 58 homes will be transferred, free and clear of any future payments, to Vision’s current New York consumers. Additionally, the defendants must wind down their remaining business in New York over the following year, and along with any businesses they take a controlling interest in, are permanently enjoined from engaging in any future residential real estate business in New York.

The settlement is set to resolve an August 2019 federal lawsuit, filed in the Southern District of New York, alleging that, since at least 2011, Vision and its affiliates profited from predatory, subprime home loans at the expense of some of the most vulnerable New Yorkers, primarily in Upstate and Central New York. In the complaint, Attorney General James and Superintendent Lacewell accused the company of buying severely distressed properties and marketing them at a substantial markup with high-cost, interest rates, in the range of 10% to 25%. Vision rarely disclosed these high interest rates and typically made no repairs or renovations to the dilapidated homes they were selling, illegally passing those costs on to consumers. Further, Vision was not properly licensed to engage in seller finance lending in New York, which it was required to be beginning in late 2011, and thus was operating illegally when entering into these transactions.

The lawsuit further charged that Vision targeted vulnerable consumers who , by the company’s own admission, were eager to share in the American dream of homeownership, but could not qualify for conventional financing due to various employment, health, marital, or other financial reasons. While Vision claimed its “unique” business model was a path to homeownership, in reality, the company made significant profits with little risk by skirting consumer protections and financial regulations and trapping consumers with high cost mortgages and often uninhabitable homes.

Despite placing the burden of repairing and maintaining the homes on consumers, Vision did not fully disclose the many dangerous, unhealthy, and unsafe conditions in its homes, and in many instances concealed the extent of these conditions by leaving the electricity and other utilities turned off while consumers took walk throughs of the homes. These conditions included pest infestations; faulty electrical wiring; water damage; missing heaters, pipes, water tanks, and septic systems; mold; asbestos; foundation damage; and severely damaged and rotted out, floors, windows, walls, and roofs. The high cost of Vision’s loans combined with the significant cost of repairing these violations set consumers up to fail. Moreover, Vision routinely evicted consumers who had invested substantial sums of money in repairs without offering them the foreclosure protections to which they were entitled.

The settlement being announced today is still subject to final court approval.

New York Attorney General Letitia James and New York Superintendent of Financial Services Linda Lacewell made the announcement.

Vision’s illegal and deceptive practices that were targeted against New York’s most vulnerable residents will finally be put to an end,” said Attorney General James.Owning a home is what millions of New Yorkers dream of, but Vision turned that dream into a nightmare. Not only are we shutting down this company’s illegal New York racket, but we are securing restitution for the many victims and are ensuring 58 families have their mortgage debts wiped away. A fair and transparent housing market is essential for the health, welfare, and economic stability of New York and its residents, which is why my office will never stop fighting to hold companies responsible for their deceptive actions. I want to thank Superintendent Lacewell and her team at DFS for their partnership and diligent work throughout this case.”

Vision property management stole from hundreds of New Yorkers who sought the American dream of homeownership,” added Superintendent Lacewell. “This settlement holds Vision accountable for their illegal actions and provides a measure of restitution to New Yorkers who were victimized by Vision’s predatory practices. This is a clear message that New York has zero tolerance for those who rely on deception and fraud to turn a profit, and I commend Attorney General James and the staff of both DFS and the Attorney General’s office for their hard work on this important matter.”

In August 2019, Attorney General James and Superintendent Lacewell reached a settlement with New York-based hedge fund Atalaya Capital Management LP, for its role in funding and assisting Vision and its affiliates in their illegal business. Under that settlement, Atalaya paid New York $250,000 in civil penalties, agreed to abide by injunctive terms intended to prevent future wrongdoing, and paid more than $2.5 million in restitution to consumers, which is now being distributed to more than 100 New York homeowners in the form of monetary payments and payment cancellation.

This matter was handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Bureau Chief Jane M. Azia and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo and First Deputy Attorney General Jennifer Levy.

Additional attorneys handling this matter for the Department of Financial Services included Deputy Superintendent Peter C. Dean and Supervising Attorney in the Consumer Protection and Financial Enforcement Division Cynthia M. Reed.

Judge issues arrest warrant for Montgomery County man charged with mortgage fraud  – Patricia Duckett cries as she recounts how she lost her home of nearly 20 years, Nov. 6, 2019, in District Heights, Md. (Katherine Frey/The Washington Post) Patricia Duckett cries as she recounts how she lost her home of nearly 20 years, Nov. 6, 2019, in District Heights, Md. (Katherine Frey/The Washington Post) By Rachel Chason Jan. 3, 2020 at 9:51 a.m. PST A Prince George’s County Circuit Court judge issued an arres

Source: Judge issues arrest warrant for Montgomery County man charged with mortgage fraud – The Washington Post

Omar Anabo, 57, Vallejo, California has been sentenced to three years in prison for conspiracy to make false statements on loan applications and ordered to pay $379,068 in restitution to victims of the conspiracy.

According to court documents, between Oct. 2004 and May 2007, Anabo and co‑conspirators Sergio Roman Barrientos, 66, and Zalathiel Aguila, 46, operated Capital Access LLC in Vallejo, a company that preyed on homeowners nearing foreclosure. The defendants convinced homeowners to sign over the title to their homes to Capital Access and then spent any equity those homeowners still had, which was then used for operational expenses of the scheme and personal expenses of Anabo and his co-conspirators. http://www.mortgagefraudblog.com/?s=Omar+Anabo

The defendants also used straw buyers to obtain home loans under false pretenses and defraud federally insured financial institutions out of millions of dollars. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

Barrientos was sentenced on Nov. 2, 2018, to 14 years in prison for his role in the scheme. Aguila was sentenced on July 26, 2019, to four years in prison.

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

This case was the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Christina McCall prosecuted the case.

 

Ruby Price, 74, Bonner Springs, Kansas was sentenced today to a year and a day in prison for swindling homeowners facing foreclosure with false promises to help them save their homes

Price was a managing partner of Arize Group, a company based in Overland Park, Kansas. http://www.mortgagefraudblog.com/?s=Ruby+Price

She and co-defendants took money from distressed homeowners by fraudulently promising to:

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

Price pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.

U.S. Attorney Stephen McAllister made the announcement.

McAllister 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.

Sara Cordry, 69, Overland Park, Kansas, was found guilty on Monday of taking part in a scheme to swindle homeowners facing foreclosure with false promises to help them save their homes.

During trial, prosecutors presented evidence that Cordry conspired with co-defendants to take money from victims by fraudulently promising to:

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

Investigators identified more than 500 victims in 24 states who suffered a total loss of more than $1 million due to the scheme.

Co-defendants include:

  • Tyler Korn, 30, St. Ann, Missouri, who was sentenced to 51 months in federal prison.
  • Ruby Price, 74, Bonner Springs, Kansas, who is awaiting sentencing.
  • Amjad Daud, 35, Lutz, Florida, who failed to appear at court hearings. A warrant for his arrest has been issued.

Cordry’s sentencing is set for January 9, 2020. She could face up to 30 years in federal prison and a fine up to $1 million on each count.

U.S. Attorney Stephen McAllister made the announcement.

McAllister 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.

 

Aston Wood, 55, New Richmond, Wisconsin, has been charged today with four counts related to an alleged mortgage fraud scheme.

The indictment charges that Wood engaged in a scheme to defraud from September 2015 to July 2019.  He is charged with one count of wire fraud, one count of mail fraud, one count of bankruptcy fraud, and one count of criminal contempt of court.

The indictment alleges that Wood represented to owners of homes in foreclosure that he could help them stay in their home by obtaining refinancing or modification of their mortgage, and that he instructed customers to make monthly mortgage payments towards a new or modified loan in an amount he selected, payable to him or to a limited liability company of which he was the sole member.  The indictment alleges that rather than remit the payments to lenders as promised, Wood instead deposited the payments in bank accounts he controlled and used the funds for his own personal expenses.

The indictment further alleges that Wood offered to help some customers buy back their foreclosed property, and he continued to solicit and receive funds from customers or their families based on false representations that the funds would be used to repurchase the property.   In addition, the indictment alleges that Wood told some customers to file for bankruptcy to stall foreclosure proceedings, which allowed Wood to delay detection and continue collecting monthly mortgage payments from customers.

The fourth count of the indictment alleges that Wood disobeyed a lawful order of a Court of the United States, an injunction issued on October 24, 2017, by U.S. Bankruptcy Judge Catherine J. Furay in the Western District of Wisconsin, which permanently enjoined Wood from soliciting customers, offering to perform, and performing services related to mortgage foreclosure and debt relief.

If convicted, Wood faces a maximum penalty of 20 years in federal prison on both the wire fraud charge and the mail fraud charge, and five years on the bankruptcy fraud charge.  The criminal contempt of court charge has no maximum penalty; the penalty is at the Court’s discretion.

You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.

The charges against Wood are the result of an investigation by the Federal Bureau of Investigation, IRS Criminal Investigation, and the Federal Housing Finance Agency – Office of Inspector General.  The U.S. Attorney’s Office acknowledges the assistance of the Office of the U.S. Trustee.  Assistant U.S. Attorney Meredith Duchemin is handling the prosecution.

 

Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision have been charged today for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.

The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.

Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.

Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.

Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.

Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell made the announcement.

For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”

As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell. “We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”

In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.

The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.

Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.