Archives For foreclosure fraud

Sergio Roman Barrientos, 64, Poway, California was sentenced today in multimillion dollar mortgage and foreclosure rescue fraud scheme. Barrientos was sentenced to 14 years in prison for conspiring to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, from about September 2004 through February 2008, Barrientos and co-conspirators Zalathiel Aguila and Omar Anabo operated an entity named Capital Access LLC, Vallejo, California. They preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the distressed homeowners’ properties was then used for operational expenses of the scheme and personal expenses of Barrientos and his coconspirators. 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. http://www.mortgagefraudblog.com/?s=Sergio+Roman+Barrientos

Co-defendant Zalathiel Aguila pleaded guilty and is scheduled for sentencing on November 16, 2018. Aguila faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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

This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

David Lyle Morgan, 53, Tamp, Florida has pleaded guilty to one count of bankruptcy fraud.

According to the plea agreement, Morgan was a licensed realtor who entered into a contract with a homeowner to sell a property in foreclosure. In order to prevent the Federal National Mortgage Association (commonly known as Fannie Mae) from lawfully foreclosing on the homeowner’s property, Morgan devised and executed a bankruptcy fraud scheme wherein he filed a fraudulent bankruptcy petition in the name of the homeowner, without the homeowner’s knowledge or consent, just prior to the scheduled foreclosure sale date. The fraudulent bankruptcy invoked the automatic stay provision of the bankruptcy code, which prevented Fannie Mae from conducting the foreclosure sale and obtaining title to the property. http://www.mortgagefraudblog.com/?s=David+Lyle+Morgan

The fraudulent bankruptcy petition filed by Morgan allowed him to continue efforts to sell the property in order to obtain ill-gotten real estate commissions.

He faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.

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

Brian Roy Lozito, Jacksonville, Florida, has been charged today for deceptively marketing and selling mortgage and foreclosure relief services to consumers throughout the United States, defrauding consumers out of more than $160,000.

Lozito, while doing business as American Investigative Services, LLC allegedly deceived more than 150 consumers by claiming to provide services in return for payments upfront.

According to the complaint, American Investigative Services solicited upfront payments from consumers promising to conduct a forensic audit of consumers’ mortgage documentation in order to uncover evidence of improper robosigning, or improper notarization, assignment, or recording of the mortgage documents, or other technical deficiencies. The defendants told consumers that if these purported legal deficiencies were uncovered in mortgage documents, the lender would be unable to foreclose on the consumer’s mortgage, and the consumer would thereby own the home free and clear, even if the consumer stopped making mortgage payments to the lender. The defendants even claimed that consumers could recover mortgage payments the consumers had previously made to mortgage companies.

The complaint also alleges that the defendants performed none of the promised services, and instead used the money obtained from consumers to pay Lozito’s personal expenses. The complaint alleges violations of Florida’s Deceptive and Unfair Trade Practices Act, and seeks permanent injunctive relief, restitution, civil penalties and fees.

Attorney General Pam Bondi made the announcement.

Consumers who paid fees to the above-named entity or individual can file a complaint by calling 1(866) 9NO-SCAM or file online at MyFloridaLegal.com

To view the complaint, click here.

Lynn Benson, 54, formerly of Las Vegas, Nevada was indicted today on charges including five counts of Mortgage Lending Fraud, a category “C” felony, one count of Pattern of Mortgage Lending Fraud, and five counts of Theft in the Amount of $3,500 or More, both category “B” felonies.

According to the indictment, Lynn Benson misled victims into believing their homes could be saved from mortgage foreclosure. The victims were led to believe that they could follow a devised scheme devised to not make additional payments on their homes.

Nevada Attorney General Adam Paul Laxalt made the announcement.

Taking advantage of homeowners in need of assistance will not be tolerated by my office,” said Laxalt. “We will continue to work with our law enforcement partners to protect the financial safety of all Nevadans.”

In July, 2016, the Nevada Legislature’s Interim Finance Committee unanimously approved AG Laxalt’s request to create a Financial Fraud Unit to combat increasing financial fraud within the State. Among the 10 positions created using non-taxpayer settlement funds, the office dedicated a criminal investigator to the FBI’s Joint Terrorism Task Force, where local, state and federal agencies collaborate to combat regional terrorism.

This case was investigated after the Office of the Nevada Attorney General began its full-time participation in the FBI’s Joint Terrorism Task Force. This case was investigated by Las Vegas Metropolitan Police Department Task Force officers, and the arrest was made by the Cloverdale, CA Police Department. The Office of the Nevada Attorney General is prosecuting this case.

A grand jury indictment is merely a charging document; every defendant is presumed innocent until and unless proven guilty in a court of law.

The grand jury indictment against Lynn Benson is attached.  To file a complaint about someone suspected of committing a fraud, click here.

Jeffery J. Detloff, Lori K. Detloff and Detloff Marketing and Asset Management Inc., have been indicted today on charges of conspiring to commit mail fraud and wire fraud for participating in a long-running conspiracy to defraud companies, including financial institutions, in connection with foreclosed properties in the Minneapolis area and elsewhere from in or about September 2007 and continuing through in or about June 2015.

Jeffery Detloff, a realtor who sold and managed foreclosed Minneapolis, Minnesota properties on behalf of victim companies worked alongside his wife, Lori Detloff, an accountant for Jeffery Detloff and associated companies, in committing the fraud.  The Detloffs conducted their real estate business through Detloff Marketing.  In addition to the conspiracy charge, the indictment includes four counts of wire fraud and four counts of mail fraud.

According to the indictment, the Detloffs devised a scheme requiring repair contractors to pay the Detloffs kickbacks.  In return, Jeffery Detloff used his position as a realtor for the victim companies to steer housing repair contracts to contractors who paid the kickbacks.  The contractors paid kickbacks to the Detloffs through Detloff Marketing.  The indictment further alleges that Jeffery Detloff procured and submitted sham bids as part of the scheme to defraud the victim companies.  One housing repair contractor has already pleaded guilty in connection with this investigation.

This is the second case involving fraud and kickbacks relating to repair contracts for properties in the Minneapolis area owned by financial institutions.  The maximum penalty for wire fraud affecting a financial institution, mail fraud affecting a financial institution, and conspiracy to commit mail and wire fraud affecting a financial institution is 30 years of imprisonment and a fine of $1,000,000.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The Department of Justice made the announcement.

This indictment affirms the Antitrust Division’s commitment to protecting the American housing market from fraud,” said Assistant Attorney Makan Delrahim of the Department of Justice’s Antitrust Division.  “We will continue to work with our law enforcement partners to protect the integrity of the competitive process.”

As alleged, the defendants created a scheme to siphon as much money as they could from these properties, no matter the method, no matter the victim,” said FBI Special Agent in Charge Jill Sanborn of the Minneapolis Division. “These scams victimize all of us, and the FBI and our law enforcement partners will continue to unravel these schemes and hold accountable anyone found responsible for defrauding the system.”

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The charges are the result of a federal investigation of housing repair contracts in the  Minneapolis area.

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.