Archives For fraudulent loan applications

Jaime Mayorga, 40, and Ruben Rodriguez, 42, both of Sacramento, California were found guilty, on Tuesday, after a six-day trial, on one count of conspiracy to commit wire fraud.

On July 14, 2011, Mayorga, Rodriguez, and five others were charged by indictment with conspiracy to commit wire fraud. The defendants, including Mayorga and Rodriguez, worked for Delta Homes & Lending, a Sacramento, California, based real estate and mortgage lending company that falsified home loan applications to obtain mortgage loans for borrowers, many of whom did not and could not qualify for a loan without the lies submitted by Delta employees. Mayorga and Rodriguez were real estate agents and loan officers. The now defunct Delta Homes was founded by co-defendant Moctezuma “Mo” Tovar, 49, Sacramento, California.

According to court documents, Delta opened one office in 2003 and eventually had multiple offices in Sacramento, with additional branch offices in Woodland, Yuba City, and Southern California. Rodriguez and Mayorga both started working at the original Delta office on Enterprise Drive in Sacramento. Later, they both moved to a branch on Franklin Boulevard, and Rodriguez went on to work at other Delta branches, including a large branch office located on Howe Avenue.

According to court documents and evidence presented at trial, Delta targeted the Latino community with advertisements in Spanish that heralded the company’s ability to obtain home loans for borrowers who otherwise would not qualify for a mortgage. In addition to advertisements in which Delta claimed to be “Hispanics Serving Hispanics,” Delta employees solicited clients at flea markets and by going door-to-door through the community.

In order to obtain mortgages, the defendants falsified information on loan applications regarding the clients’ income, occupation, and personal savings. Straw buyers were sometimes used when the true borrower did not have a sufficient credit score to qualify. The defendants also deposited money into borrowers’ bank accounts to meet the lenders’ requirement that the borrower have money on hand, taking the money back after acquiring the verification of deposited funds that the lenders also required.

The evidence at trial showed that the defendants’ fraud was also personally lucrative. During the investigation, Rodriguez estimated that in 2006 alone, he earned more than $400,000. Similarly, Mayorga told agents that although he earned a salary when he started at Delta, he shifted to commission-based compensation and then earned between 50 and 85 % of the brokerage fees. Mayorga stated that he earned more than $500,000 in 2005.

The aggregate sale price of the homes involved in the conspiracy was in excess of $10 million, and as a result of the conspiracy, mortgage lenders and others suffered losses of at least $4 million.

Co-defendants Tovar, Manuel Herrera, 39, Davis, California; Sandra Hermosillo, 57,  Woodland, California; and Jun Michael Dirain, 46, Antelope, California all pleaded guilty to one count of conspiracy to commit wire fraud. Christian Parada-Renteria, 43, Woodland, California pleaded guilty to two counts of concealing felonies related to the wire fraud conspiracy.

Rodriguez and Mayorga are scheduled to be sentenced on August 6, 2019 by U.S. District Judge John A. Mendez. The court has not yet set a sentencing date for Tovar, Herrera, Hermosillo, and Dirain. Parada-Renteria was sentenced to serve one year in prison.

Each of the defendants faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentences, 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.

U.S. Attorney Scott stated: “Mayorga and Rodriguez took advantage of members of the Latino community who hoped to become homeowners and manipulated the real estate process for personal gain. As so often occurs in these cases, the result was losses to the financial institutions and neighborhoods burdened with foreclosed properties. We are grateful for the diligence and professionalism of the FBI in investigating this case.”

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Brian A. Fogerty and Justin L. Lee are prosecuting the case.

George French Jones, Jr., 50, Santa Monica, California, was sentenced to 116 months in prison today after previously pleading guilty to mail fraud and identity theft charges in connection with a mortgage fraud scheme involving two waterfront residential properties in Broward County, Florida.

According to information disclosed in open court, in early 2018 Jones identified two residential properties in Fort Lauderdale, Florida, which Jones fraudulently pledged as collateral in order to obtain mortgage loans from a private lender. http://www.mortgagefraudblog.com/?s=George+French+Jones%2C+Jr

The two Broward County properties were owned by corporate entities that Jones had no affiliation with and which were in fact owned by independent third parties. To execute his fraudulent loan scheme, Jones created fake identification documents and email addresses in order to impersonate officers of the corporate owners of the two properties. Jones then submitted bogus loan applications and other documents to a private lender in which he pretended to be the owners of the Fort Lauderdale properties. As a result of this scheme, Jones defrauded the private lender out of approximately $1.7 million dollars.

Jones was also ordered to pay $1,824,581 in restitution.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) made the announcement.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI.  This case was prosecuted by Assistant U.S. Attorney Christopher Browne.  Assistant U.S. Attorney Nalina Sombuntham is handling the asset forfeiture aspects of the prosecution.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

 

James Bayfield, 46, Queens, New York was sentenced today to 21 months’ imprisonment, to be followed by three years of supervised release, for conspiracy to commit bank and wire fraud.

Bayfield, a self-described mortgage specialist, was convicted by a federal jury in January 2017 for his role in a multi-million dollar mortgage fraud scheme. http://www.mortgagefraudblog.com/?s=James+Bayfield

Between September 2008 and May 2011, Bayfield and his co-conspirators caused mortgage loan applications with false information to be submitted to lending institutions, including Amtrust, Bank of America and JPMorgan Chase, in connection with the purchase of residential properties located in Brooklyn and Queens, New York.  These applications contained fraudulently inflated purchase prices and false information about the assets and income of the purported purchasers, many of whom were paid to act as straw purchasers.  Bayfield and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and other borrowers had made down payments on the properties.

To complete their scheme, Bayfield and his co-conspirators conducted simultaneous and secretive purchases and sales of the properties, sometimes called “flips,” at inflated prices.  Ultimately, the lending institutions issued millions of dollars of mortgage loans secured by properties with inflated appraisal values, and many of these loans were placed into default status.

Bayfield was also ordered to pay $184,651 in forfeiture.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentencing.

Bayfield has portrayed himself as a mortgage specialist, but now stands exposed as a convicted thief who used his knowledge of real estate transactions to carry out his fraudulent schemes against lending institutions,” stated United States Attorney Donoghue.  “This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of lenders left holding the loans.”  Mr. Donoghue thanked the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of Inspector General; the Federal Deposit Insurance Corporation, Office of Inspector General; and the New York State Department of Financial Services for their hard work and dedication over the course of this multi-year investigation and prosecution.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David C. Pitluck, Mark E. Bini and Michael T. Keilty are in charge of the prosecution.

IRVINE, Calif.–(BUSINESS WIRE)–CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its latest Mortgage Fraud Report. The report shows a 12.4 percent year-over-year increase in fraud risk at the end of the second quarter, as measured by the CoreLogic Mortgage Application Fraud Risk Index.

Source: CoreLogic Reports a 12.4 Percent Year-over-Year Increase in Mortgage Fraud Risk for the Second Quarter of 2018 | Business Wire

Yant Garcia, 38, Hialeah, Florida pled guilty on September 5, 2018, to one count of conspiracy to commit an offense against the United States.

According to the plea document, beginning around 2012, and continuing through around 2015, Garcia agreed with others to launder the proceeds of an identity theft tax refund scheme and mortgage fraud scheme by cashing checks in names of persons who were not present at check-cashing stores in Miami.

In or around 2013, Garcia’s co-conspirators submitted fraudulent tax returns to the Internal Revenue Service (IRS) using stolen personal identity information seeking refunds ranging in value from $130,000 to $170,000.  In total, the Department of Treasury paid out approximately $4.3 million in fraudulent refund claims by mailing out tax refund checks.  The defendant and a co-conspirator met with the owner of a check-cashing store in Hialeah and the true owner of the store agreed to cash these checks for a thirty percent fee.

In or around 2015, Garcia and his co-conspirators engaged in a mortgage fraud scheme on a property in Miami Beach.  Garcia and his coconspirators submitted fraudulent loan applications and received approximately $3.7 million in proceeds from this mortgage fraud via interstate wire to the account of the fake title company in Miami.  Garcia then provided checks to co-conspirators who cashed these checks at check-cashing stores in South Florida in the names of payees who were not present.  http://www.mortgagefraudblog.com/?s=Yant+Garcia

Garcia is scheduled to be sentenced on November 14, 2018 at 10:30 a.m. before U.S. District Judge Marcia G. Cooke.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI) made the announcement.

Mr. Greenberg commended the investigative efforts of the FBI and IRS-CI.  The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Joseph DiValli, Jackson, New Jersey, was sentenced today to 18 months in prison for his role in a large-scale mortgage fraud scheme that used phony documents and straw buyers to acquire more than $6 million in loans.

According to documents filed in this case and statements made in court: http://www.mortgagefraudblog.com/?s=Joseph+DiValli+

From March 2011 through November 2012, DiValli and other conspirators agreed to fraudulently obtain mortgage loans for properties located in North Jersey, New Jersey. After recruiting “straw buyers” to purchase the properties, DiValli and others submitted false and fraudulent loan applications and supporting documents so the straw buyers could qualify for the loans. DiValli and others also used another conspirator, who worked at a bank, to create misleading certifications showing certain bank accounts held more money than they actually had. DiValli and other conspirators also submitted false appraisal reports, backdated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.

As a loan officer for a North Jersey mortgage lender, DiValli facilitated some of these fraudulent transactions, including a $244,855.26 mortgage on a property located on Smith Street, Elizabeth, New Jersey. Overall, the scheme induced lenders to issue more than $6 million in loans, resulting in several defaults and exposing lenders and the Federal Housing Administration (FHA) to more than $2 million in potential losses.

DiValli also admitted using a separate scheme to modify the mortgage on his personal residence. From March 2011 through June 2012, Divalli used false payroll ledgers and earnings statements to deceive a loan officer into believing that his net earnings were lower than his actual income level.

DiValli also admitted receiving income of more than $450,000 in 2012. In order to avoid taxes of $79,000, DiValli failed to file taxes for 2012 and cashed his paychecks at a check-cashing facility to conceal his income.

DiValli previously pleaded guilty before U.S. District Judge Susan D. Wigenton to a superseding information charging him with one count of conspiracy to commit wire fraud, one count of wire fraud and one count of tax evasion. Judge Wigenton imposed the sentence today in Newark federal court.

In addition to the prison term, Judge Wigenton sentenced DiValli to three years of supervised release and ordered to pay restitution of $2,322,045.

U.S. Attorney Craig Carpenito made the announcement and credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Goldsmith Romero; special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the National Security Unit, Andrew Kogan of the Cyber Unit, and Senior Litigation Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit.

Defense counsel: Michael A. Koribanics Esq. Clifton, New Jersey.

Alejandro Tobon, 35, Orlando, Florida has been sentenced to 37 months and Carlos Escarria, 61, Largo, Florida has been sentenced to 18 months in federal prison, for conspiracy to commit bank and wire fraud. They pleaded guilty on June 9, 2017.

According to court documents, from as early as October 2007 through May 2008, Tobon, Escarria, and others conspired to execute a bank and wire fraud scheme. The goal of the fraud scheme was to sell condominium units at The Preserve at Temple Terrace, a 392-unit condominium complex in Tampa, Florida. To entice buyers to purchase the units, the conspirators offered cash payments to buyers, either before or after closing. The mortgage lenders were not made aware of these payments. The conspirators used several entities to conceal from the mortgage lenders the cash payments to buyers.

The conspirators made false statements on loan documents, such as purchase and sale agreements and loan applications, and on HUD-1 settlement statements, to induce mortgage lenders to approve loans for otherwise unqualified borrowers for the condo unit purchases.

Tobon was the manager of Transcontinental Lending Group’s branch in Tampa, Florida and he was also the President of Tobon Marketing and Consultant. His role in the conspiracy included submitting false and fraudulent loan applications to financial institutions to induce them to provide funding for buyers to purchase Preserve units. He also marketed units to buyers with undisclosed incentives and transferred funds he had received from the developer through Tobon Marketing and Consultant to borrowers’ bank accounts who needed money to close on the purchases. The money was then used to provide the down payment and cash to close requirements.

Escarria worked as a loan officer at Transcontinental Lending Group’s branch in Tampa, Florida. He signed false and fraudulent loan applications to induce financial institutions into providing funding for buyers to purchase condo units. The false representations submitted to and relied upon by the mortgage lenders included occupancy, income, source of funds, and assets.

The mortgage lenders’ total losses resulting from Tobon’s and Escarria’s role in the mortgage fraud conspiracy are approximately $5.8 million.

Tobon and Escarria were sentenced by U.S. District Judge Susan C. Bucklew.

This case was investigated by Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.

Ralph Christopher Cirino was indicted in the Eastern District of Pennsylvania on six counts of mail fraud, four counts of misrepresentation of a social security number, four counts of wire fraud, two counts of making false statements in mortgage loan applications and one count of unlawful possession of authentication feature.

According to the indictment, Cirino falsely reported to the Pennsylvania Department of Labor that two corporations, Fast Care Home Care P.C. and Juris Clarity were legitimate corporations with multiple employees earning wages in 2015 and 2016.  In fact, these companies did not conduct any business, have employees or pay wages and the employees were fictitious.  Cirino sought to obtain unemployment benefits by purporting to be several of the fictitious employees and by submitted unemployment claims on behalf of those fictitious employees and on his own behalf. On of the fictitious employee names identified in the indictment is Benjamin Hunt.

The indictment alleges that Cirino made false statements to American Internet Mortgage, Inc. and Fairway Independent Mortgage Corporation for the purpose of influencing the actions of the mortgage companies on loans.  He caused loan applications containing knowing false statements to be submitted including an application in December 2016 to AIM falsely stating the applicant’s name was Benjamin Hunt, he was employed by Fast Care and earned a weekly salary of $1,960 and an application in March 2017 to Fairway falsely stating the applicant’s name was Benjamin Hunt, he was employed by Fastcare and earned a monthly salary of $9,880.

The indictment also seeks forfeiture of $87,259.

Pierre Chainey, 42, Tabernacle, New Jersey, was sentenced to 54 months in prison for his role in a mortgage fraud scheme that caused $2.7 million in losses.  Chainey previously pleaded guilty before U.S. District Judge Noel L. Hillman to one count of conspiracy to commit wire fraud and one count of money laundering. Judge Hillman imposed the sentence on July 7, 2017, in Camden federal court.

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

In November 2005, Chainey established Universal Lending Solutions LLC, a mortgage brokerage company in Northfield, New Jersey, and served as chief executive office of the company until 2008. He was also a loan officer for the company.

From November 2005 through at least January 2008, he conspired with others to profit from the sale and purchase of properties in New Jersey by obtaining mortgage loans for unqualified borrowers using fraudulent loan applications, HUD-1 Settlement Statements and other documents.

In addition to the prison term, Judge Hillman sentenced Chainey to three years of supervised release; restitution will be determined at a later date.

Acting U.S. Attorney William E. Fitzpatrick announced the sentence and credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Newark.

Louis Marandola, 42, Providence, Rhode Island, a Former Real Estate Attorney, and Brian R. McCaffrey, 38, Warwick, Rhode Island, a former licensed loan originator, have been sentenced to federal prison for their participation in a scheme to obtain money they were not entitled to from financial institutions and individuals through mortgage loans, residential property sales and fees.

Marandola was sentenced to 48 months in federal prison to be followed by 3 years supervised release. On January 13, 2017, Marandola pleaded guilty to conspiracy to commit bank fraud and aggravated identity theft.

McCaffrey was sentenced to 18 months in federal prison, to be followed by 3 years supervised release. McCaffrey pleaded guilty on January 27, 2017, to conspiracy to commit bank fraud and bank fraud.

Two co-defendants in this matter, Raffaele M. Marziale, 41, Bristol, Rhode Island, a former loan officer who pleaded guilty on February 29, 2016, to conspiracy to commit bank fraud, bank fraud, and aggravated identity theft; and Edwin Rodriguez, 35, Pawtucket, a real estate investor who pleaded guilty on June 1, 2016, to conspiracy to commit bank fraud, bank fraud, aggravated identity theft and tampering with a witness, are awaiting sentencing.

Gina Ronci Mohamed, 46, Lincoln, Rhode Island, was sentenced on April 25, 2017, to two years probation. Ms. Ronci pleaded guilty on April 22, 2016, to making a false statement to HUD. Lauren Sienko, 35, of Rehoboth, Massachusetts., was sentenced on April 3, 2017, to two years probation. Ms. Sienko pleaded guilty on January 6, 2017, to making a false statement to HUD.

According to court documents and information presented to the court, an investigation by the United States Attorney’s Office, HUD-OIG, U.S. Secret Service and Rhode Island State Police determined that between 2007 and 2014, the defendants conspired to execute a scheme which caused prospective homebuyers to obtain mortgages from financial institutions based upon materially false loan applications and fraudulent supporting documentation. As part of the conspiracy, false representations were made in order to obtain fees to which the defendants were not entitled or to make a profit selling property in which they had an ownership interest. In some instances, thousands of dollars were fraudulently obtained by misrepresenting on a HUD form the amount of funds due or to be paid to one of the parties involved in a transaction.

In numerous instances, the defendants concealed their involvement in the scheme by conducting business under the names of several different entities and individuals. At times, the defendants used stolen identities to further the fraud and to conceal their connection to the real estate transactions.

The sentences, imposed by U.S. District Court Judge John J. McConnell, Jr., are announced by Acting United States Attorney Stephen G. Dambruch; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Brian Deck, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; and Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police.

The cases are being prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and William J. Ferland.