Archives For fraudulent loan applications

Attorney Charged With Making False Statements to Mortgage Lenders

Stephanie Abbott —  January 16, 2025 — Leave a comment

Thomas C. Goldstein, Chevy Chase, Maryland, and Washington, D.C., an attorney, was indicted today on a 22-count indictment,of tax evasion, assisting in the preparation of false tax returns, failing to pay taxes, and making false statements to two separate mortgage lenders.

According to the indictment, in 2021, Goldstein, the sole owner of Goldstein & Russell, P.C., a boutique law firm specializing in appellate litigation, including litigation before the United States Supreme Court. Goldstein allegedly submitted false mortgage applications to two separate mortgage lending companies, seeking financing to purchase a $2.6-million home in Washington, D.C.  On those mortgage applications — which required Goldstein to list all his liabilities and debts — Goldstein allegedly omitted millions of dollars of liabilities, including more than $14 million he owed at the time on two promissory notes, as well as taxes he owed to the IRS.  Goldstein’s false statements to one of the mortgage lenders allegedly enabled him to obtain a $1.98 million loan.

Also, between 2016 and 2023, Goldstein allegedly engaged in a scheme to evade his taxes.  Goldstein allegedly took various steps to carry out his scheme, including diverting legal fees that were due to the law firm to his personal bank account, and then using them to pay personal poker-related debts; using the law firm’s assets to satisfy his personal poker debts and falsely classifying those payments as “legal-fee” expenses on the firm’s books and records; and using firm assets to pay salaries and health insurance premiums for people with whom Goldstein had a personal relationship but who performed little or no work for the law firm and did not qualify for its health insurance.

Goldstein also allegedly did not report, or falsely understated, millions of dollars of gambling winnings on his tax returns. In addition, for 2016 through 2021, except 2018, Goldstein allegedly did not pay the taxes he self-reported were due on his returns, while simultaneously spending millions of dollars on personal expenses such as gambling debts, travel, vacation rentals, and luxury goods.

If convicted, he faces a maximum sentence of five years in prison for each of the tax evasion charges; three years for each count of assisting in the preparation of false tax returns; a maximum of one year on each of the five counts charging willful failure to pay taxes; and 30 years for each count of making false statements to mortgage lenders. He also faces a period of supervised release, monetary penalties, and restitution.

IRS Criminal Investigation and the Federal Bureau of Investigation are investigating the case.

U.S. Attorney Erek L. Barron announced the indictment with Deputy Assistant Attorney General David A. Hubbert, Department of Justice Department, Tax Division.

Assistant U.S. Attorney Patrick Kibbe, of the District of Maryland, Senior Litigation Counsel Stanley Okula, and Trial Attorneys Emerson Gordon-Marvin and Hayter Whitman, of the Tax Division, are prosecuting the case.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

 

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Businessman Sentenced for Bilking Elderly Homeowners in Reverse Mortgage Scheme

Stephanie Abbott —  January 16, 2025 — Leave a comment

Mark Steven Diamond ,68, Chicago, Illinois, a businessman was sentenced today to more than 17 years in federal prison for bilking elderly homeowners in a reverse mortgage and home repair scheme.

Diamond schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform.  Diamond and the co-schemers targeted elderly victims in the Chicago area based on the amount of equity in their homes and their relative lack of financial sophistication.  In some instances, Diamond concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work, when, in fact, the documents that Diamond caused them to sign were related to applying for the loan.  After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs.

Diamond pleaded guilty last year to a federal charge of wire fraud affecting a financial institution.  In addition to the 205-month prison sentence, U.S. District Judge Franklin U. Valderrama ordered Diamond to pay $2.7 million in restitution.

All four co-schemers charged in the investigation – loan originators Gary Bohn, Hoffman Estates, Ill., and Matthew Fefferman, Munster, Indiana., Diamond’s employee Cynthia Wallace, Sauk Village, Illinois., and title agency owner Forrest C. Fawcett, Fort Lauderdale, Florida – previously pleaded guilty and admitted their roles in the fraud. They are awaiting sentencing.

The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Rae Oliver Davis, Inspector General for the U.S. Department of Housing and Urban Development Office of the Inspector General, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, and Kwame Raoul, Illinois Attorney General. The government was represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.

“Mark Diamond repeatedly preyed on the elderly for years,” said Acting U.S. Attorney Pasqual.  “He damaged the most vulnerable in our community, both financially and personally. We will continue to work with our law enforcement partners to hold accountable anyone who seeks to deceive elderly homeowners through fraud.”

“Diamond’s scheme defrauded more than 100 elderly and vulnerable homeowners, preying upon their trust and devastating them financially,” said HUD-OIG Inspector General Davis.  “His sentencing today is a sobering reminder of the unique harm caused by predatory reverse mortgage schemes.  These egregious criminal acts will not be tolerated, and my agency will continue to work with our law enforcement partners to hold other individuals like Diamond accountable for their actions.”

“The reverse mortgage fraud scheme perpetrated by the defendant preyed on some of the most vulnerable Chicagoans,” said FBI Chicago SAC DePodesta.  “Combatting white-collar crime stands as a foremost priority for the FBI.  With the assistance of our law enforcement partners, we will continue to investigate and dismantle financial fraud schemes aimed at harming members of our community.”

“Many of these victims were older homeowners who worked and saved their entire their lives, and their only mistake was trusting an individual who specifically targeted them to be victims of his scam,” said Attorney General Raoul.  “My office is proud to partner with the U.S. Attorney for the Northern District of Illinois, the Department of Housing and Urban Development’s Office of Inspector General in Chicago, and the Chicago Field Office of the FBI to obtain a degree of justice for the victims who were defrauded.  This sentence underscores the importance of the state-federal law enforcement collaborations that support my office’s work to hold accountable individuals who prey upon our most vulnerable residents.”

 

 

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Woman Pleads Guilty to $161 Million Mortgage Fraud Scheme

Stephanie Abbott —  January 10, 2025 — Leave a comment

Kimberly Johnson, 55, Hampton, Georgia, has pleaded guilty for her role in a mortgage fraud scheme spanning more than three years and resulting in the approval of approximately 450 mortgage loans based on fabricated documents and false information. Many of the loans are insured by the Federal Housing Administration (FHA), resulting in claims being paid for mortgages that have defaulted.

The charges and other information presented in court: Kimberly Johnson participated in a conspiracy in which homebuyers and mortgage brokers submitted fraudulent loan applications to induce mortgage lenders to fund mortgages. Johnson’s role in the scheme was to alter or fabricate the supporting documents for the loans, including bank statements, pay stubs and Forms W-2. Over the course of more than three years, Johnson helped approximately 450 homebuyers to commit mortgage fraud by obtaining loans for which they were unqualified. The fraudulent loan applications were submitted to numerous mortgage lenders, and some of the mortgage brokers who worked on obtaining the loans were part of the conspiracy. These fraudulent loans totaled approximately $161 million. Many of those loans have already defaulted.

The announcement was made by U.S. Attorney Buchanan.

“The defendant and her co-conspirators brazenly manipulated the real estate lending process out of sheer greed,” said U.S. Attorney Ryan Buchanan. “Criminals like Johnson, who engage in mortgage fraud, threaten the soundness of the real estate market in our communities. Our office is committed to prosecuting these bad actors who abuse the system for their personal gain and to safeguard the mortgage lending system for those who rely on this financial support.”

“Kimberly Johnson engaged in a massive mortgage fraud scheme, fabricating material documents on over 450 loans to falsely qualify individuals for loans they would not have otherwise qualified for,” said Special Agent-in-Charge Jerome Winkle with the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG).  “When individuals commit fraud against federally funded programs, it creates significant risks to the programs and limits the financial resources available to assist hard working individuals realize the American dream of homeownership. HUD OIG will continue to work with its prosecutorial and law enforcement partners to vigorously pursue those who seek to profit by abusing HUD-funded programs.”

“Ms. Johnson’s guilty plea is the result of our commitment to hold anyone who exploits the mortgage lending system for personal gain fully accountable,” said Edwin S. Bonano, Special Agent in Charge of FHFA-OIG’s Southeast Region. “This case highlights the importance of collaboration between our law enforcement partners to protect the integrity of the housing market and prevent fraud that undermines public trust.”

“The defendant in this case pleaded guilty for her role in altering and fabricating supporting documents in fraudulent mortgage loan applications, as part of a scheme that resulted in the approval of approximately 450 mortgage loans,” said Kyle A. Myles, Special Agent in Charge of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG), Atlanta Region. “The FDIC OIG remains committed to working with our law enforcement colleagues to investigate those who commit fraudulent acts and threaten to undermine the safety and soundness of our nation’s financial system.”

“The FBI will vigorously investigate criminal offenses that impact the integrity of the residential mortgage market. In this case, Johnson had the duty to conduct business honestly but instead chose to engage in mortgage fraud, securing mortgages for individuals who otherwise would not have qualified for one,” said Sean Burke, Acting Special Agent in Charge of FBI Atlanta. “We are proud to have worked with our law enforcement partners and the U.S. Attorney’s Office in the effort to prosecute anyone who engages in this type of misconduct.”

Johnson pleaded guilty to one count of conspiracy to defraud the United States in a mortgage fraud scheme and, as part of her plea, has agreed to pay restitution to the victims of the conspiracy, including the U.S. Department of Housing and Urban Development, which insures many of the residential mortgages in the United States. Johnson is scheduled to be sentenced on April 11, 2025, before U.S. District Judge Sarah E. Geraghty.

This case is being investigated by the U.S. Department of Housing and Urban Development Office of Inspector General, the Federal Housing Finance Agency Office of Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General and the Federal Bureau of Investigation.

Assistant U.S. Attorney Alison Prout is prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

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Restaurant Owner Sentenced For Role in Submitting Fraudulent Loan Applications

Stephanie Abbott —  August 29, 2024 — Leave a comment

Omar Hernandez-Lopez, 39, Springfield, Illinois as sentenced today to 18 months’ imprisonment for concealment of a felony in connection with wire fraud and false statements on loan applications.

At Hernandez-Lopez’s sentencing hearing, Senior U.S. District Judge Sue E. Myerscough, found that starting around June 2018 and continuing until at least June 2019, Hernandez-Lopez was aware of and acted to conceal the fraudulent nature of several falsified documents that were submitted to loan providers. Two fraudulent loan packages were submitted in an unsuccessful attempt to obtain a business loan for Hernandez-Lopez’s Springfield restaurant, La Fiesta Grande. The other two fraudulent loan packages were submitted in a successful attempt to obtain a home mortgage loan. Hernandez-Lopez was aware of the submission of fraudulent documents and took steps to conceal their fraudulent nature from the loan companies and law enforcement.

At the sentencing hearing, the government presented evidence showing that Hernandez-Lopez’s name is on the deed of the house for the fraudulently obtained mortgage and he operated the restaurant.

The sentencing follows Hernandez-Lopez’s guilty plea in April 2024. The statutory penalties for misprision of a felony are up to three years’ imprisonment, one year of supervised release, and a fine of up to $250,000.

Following his prison sentence, he will serve a 12-month term of supervised release.

The charges were investigated by the Federal Deposit Insurance Corporation Office of Inspector General, Chicago Region. Assistant U.S. Attorneys Sierra Senor-Moore and Tanner Jacobs represented the government in the prosecution.

 

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R.E. Agent Sentenced for Running Multi-Year Mortgage Fraud Schemes

Stephanie Abbott —  January 21, 2022 — Leave a comment

Eric Hill, 52, Tyrone, Georgia, an Atlanta real estate agent has been sentenced for his participation in a mortgage fraud scheme that netted more than $21 million in fraudulent mortgage loans.

According to the charges and other information presented in court: The defendants participated in a scheme in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.  Eric Hill and Robert Kelske were real estate agents who represented a major nationwide homebuilder.  Hill and Kelske helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, Hill and Kelske conspired with real estate agents Anthony Richard and Cephus Chapman, who falsely claimed to represent homebuyers as their selling agents in order to receive commissions from the home sales.  In reality, these real estate agents had never even met the homebuyers they claimed to represent.  To avoid detection, the agents often notified closing attorneys that they would not be available for the home closing and sent wire instructions for the receipt of their commissions.  When these purported selling agents received their unearned commissions, they kicked back the majority of the commissions to Hill or Kelske for enabling them to be added to the deal, keeping a small share for their role in the scheme.

Many of the fraudulent loans were insured by the Federal Housing Administration (FHA), resulting in over $850,000 in claims being paid for mortgages that have defaulted.  Hill also engaged in a scheme to defraud his employer, a national real estate developer, out of over $480,000 dollars in real estate commissions.

Hill was sentenced to two years, six months in prison to be followed by three years of supervised release.  Hill was convicted on these charges on September 21, 2020, after he pleaded guilty.

In addition to Hill, Defendants Donald Fontenot, Maurice Lawson, Stephanie Hogan, Jerod Little, Renee Little, Paige McDaniel, Fawziyyah Connor, and Anthony Richard have all been sentenced for their roles in the conspiracies.

  • Todd Taylor pled guilty and is scheduled to be sentenced on March 3, 2022.
  • Robert Kelske also pled guilty and is scheduled to be sentenced April 14, 2022.
  • Cephus Chapman was convicted at trial and is scheduled to be sentenced on February 10, 2022.

“Eric Hill and his co-conspirators defrauded mortgage loan holders out of millions of dollars, with taxpayers being saddled with much of the loss,” said U.S. Attorney Kurt R. Erskine.  “We will vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of financial institutions and government programs that insure or guarantee the loans.”

“While it is easy to dismiss financial fraud cases as victimless crimes because of their lack of violence, there is, however, very real victimization to our economy and our taxpayers,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “This sentencing sends the message that the FBI will persistently work to protect American citizens and the real estate market from predators who drag down our economy by deception for their own personal gain.”

“Eric Hill engaged in premeditated criminal acts with the sole purpose of enriching himself, without regard for millions of American homebuyers who rely on federal housing programs to insure their mortgages. His fraudulent actions strike not only at the fiscal integrity of the FHA, but also our neighbors and communities who are victims of these schemes,” said Special Agent in Charge Wyatt Achord with the Department of Housing and Urban Development Office of Inspector General.

“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who commit fraud in the housing and mortgage market and abuse the resources of the Government-Sponsored Enterprises regulated by FHFA.  We are proud to have partnered with HUD-OIG, the FBI, and the U.S. Attorney’s Office for the Northern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.

This case was investigated by the Department of Housing and Urban Development Office of the Inspector General, Federal Bureau of Investigation, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorneys David A. O’Neal, Alison B. Prout, and former Northern District of Georgia Assistant U.S. Attorney Ryan Huschka prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

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R.E. Agent Sentenced For Running Multi-Year Mortgage Fraud Scheme

Stephanie Abbott —  January 21, 2022 — Leave a comment

Eric Hill, 52, Tyrone, Georgia, an Atlanta real estate agent, has been sentenced for his participation in a mortgage fraud scheme that netted more than $21 million in fraudulent mortgage loans.  Many of the fraudulent loans were insured by the Federal Housing Administration (FHA), resulting in over $850,000 in claims being paid for mortgages that have defaulted.  Hill also engaged in a scheme to defraud his employer, a national real estate developer, out of over $480,000 dollars in real estate commissions.

According to the charges and other information presented in court: The defendants participated in a scheme in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.  Eric Hill and Robert Kelske were real estate agents who represented a major nationwide homebuilder.  Hill and Kelske helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, Hill and Kelske conspired with real estate agents Anthony Richard and Cephus Chapman, who falsely claimed to represent homebuyers as their selling agents in order to receive commissions from the home sales.  In reality, these real estate agents had never even met the homebuyers they claimed to represent.  To avoid detection, the agents often notified closing attorneys that they would not be available for the home closing and sent wire instructions for the receipt of their commissions.  When these purported selling agents received their unearned commissions, they kicked back the majority of the commissions to Hill or Kelske for enabling them to be added to the deal, keeping a small share for their role in the scheme.

“Eric Hill and his co-conspirators defrauded mortgage loan holders out of millions of dollars, with taxpayers being saddled with much of the loss,” said U.S. Attorney Kurt R. Erskine.  “We will vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of financial institutions and government programs that insure or guarantee the loans.”

“While it is easy to dismiss financial fraud cases as victimless crimes because of their lack of violence, there is, however, very real victimization to our economy and our taxpayers,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “This sentencing sends the message that the FBI will persistently work to protect American citizens and the real estate market from predators who drag down our economy by deception for their own personal gain.”

“Eric Hill engaged in premeditated criminal acts with the sole purpose of enriching himself, without regard for millions of American homebuyers who rely on federal housing programs to insure their mortgages. His fraudulent actions strike not only at the fiscal integrity of the FHA, but also our neighbors and communities who are victims of these schemes,” said Special Agent in Charge Wyatt Achord with the Department of Housing and Urban Development Office of Inspector General.

“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who commit fraud in the housing and mortgage market and abuse the resources of the Government-Sponsored Enterprises regulated by FHFA.  We are proud to have partnered with HUD-OIG, the FBI, and the U.S. Attorney’s Office for the Northern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.

Hill was sentenced to two years, six months in prison to be followed by three years of supervised release.  Hill was convicted on these charges on September 21, 2020, after he pleaded guilty.

In addition to Hill, Defendants Donald Fontenot, Maurice Lawson, Stephanie Hogan, Jerod Little, Renee Little, Paige McDaniel, Fawziyyah Connor, and Anthony Richard have all been sentenced for their roles in the conspiracies.

  • Todd Taylor pled guilty and is scheduled to be sentenced on March 3, 2022.
  • Robert Kelske also pled guilty and is scheduled to be sentenced April 14, 2022.
  • Cephus Chapman was convicted at trial and is scheduled to be sentenced on February 10, 2022.

This case was investigated by the Department of Housing and Urban Development Office of the Inspector General, Federal Bureau of Investigation, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorneys David A. O’Neal, Alison B. Prout, and former Northern District of Georgia Assistant U.S. Attorney Ryan Huschka prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

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Duo Individuals Sentenced for Roles in Mortgage-Fraud Scheme

Stephanie Abbott —  November 16, 2021 — Leave a comment

Shonda Coleman, 49, Toms River, New Jersey, and Robert Goodrich, 62, Sayreville, New Jersey were sentenced today for their roles in a mortgage-fraud scheme.

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

From 2009 to 2011 Coleman worked at Westinghouse Redevelopment Act Inc., a New Jersey business entity. In November 2009, Coleman submitted a fraudulent mortgage loan application to the lender to finance her own purchase of a home from Westinghouse. That application falsely represented, among other things, that Coleman owned $165,000 in cash, a representation intended to make Coleman appear more creditworthy than she actually was. In March 2011, Coleman again participated in the mortgage fraud scheme by helping to prepare and submit a mortgage application for a prospective buyer of a Westinghouse real estate property that she knew contained false information regarding the buyer’s finances.

Goodrich appeared at the closings for both the November 2009 and March 2011 transactions and signed settlement statements that he knew contained false information regarding the buyers’ creditworthiness.

Coleman previously pleaded guilty before Judge Wigenton to two counts of an indictment charging her and, with bank fraud. Goodrich had previously pleaded guilty before Judge Wigenton to the same two counts of the indictment to which Coleman pleaded guilty and was sentenced on April 7, 2021, sentenced to 27 months in prison. Judge Wigenton imposed Coleman’s sentence today by videoconference.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, and the U.S. Department of Housing & Urban Development, Office of Inspector General, Mid-Atlantic Region, under the direction of Special Agent in Charge Shawn Rice, with the investigation leading to the sentencing.

The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit and Special Assistant U.S. Attorneys Kevin V. Di Gregory and Charlie L. Divine of the Federal Housing Finance Agency, Office of Inspector General.

 

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Convicted Fraudster Indicted for Providing False Information on Home Loan Application

Stephanie Abbott —  April 5, 2021 — Leave a comment

Juliana Martins, 52, North Providence, Rhode Island, has been indicted for allegedly making false statements related to her incarceration and the court-ordered requirement that she pay back the stolen money when she applied for a U.S. Federal Housing Administration-backed home mortgage.

Martins in June 2019, while serving a term of federal supervised release for having conspired to use the stolen personal identity information of numerous individuals to steal nearly $400,000 from the United States Treasury, falsely represented on a home loan application, and in July 2019 on a closing document, that there were no outstanding judgements against her, when in fact she is under court order to pay restitution to the government totaling $385,533.58.

According to the indictment, when responding to requirements to truthfully disclose to the bank her credit report, assets, liabilities, and income, Martins falsely stated to the bank that “the reason I have a job gap in my employment was because I was away on a family emergency for over two years,” when in fact during that time she was incarcerated in federal prison. Additionally, it is alleged, Martins provided a false explanation for an inquiry from the Department of Justice on her credit report.

In March 2014, Martins pleaded guilty to conspiracy to embezzle United States Treasury checks, theft of government property, and aggravated identity theft, admitting that she was a leader of a criminal enterprise that possessed hundreds of people’s personal identifying information that was used to open bank accounts into which fraudulently obtained government checks were deposited. Martins was sentenced in September 2014 to serve 48 months in federal prison to be followed by three years of federal supervised release.

On Friday, a federal grand jury returned an indictment charging Martins with making false statements on bank loan applications, announced Acting United States Attorney Richard B. Myrus and 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.

The indictment requires, upon conviction, that Martin forfeit to the government her interest in her North Providence house and property.

A federal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

Martins is scheduled to appear before U.S. District Court Magistrate Judge Patricia A Sullivan on Tuesday for a supervised release violation hearing.

The case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert.

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Eleven Plead Guilty to Running a Mortgage Fraud Scheme

Stephanie Abbott —  March 19, 2021 — Leave a comment

Eric Hill, 50, Tyrone, Georgia, Robert Kelske, 52, Smyrna, Georgia,  Fawziyyah Connor, 41, Tyrone, Georgia, Stephanie Hogan, 57, Norcross, Georgia, Jerod Little, 42, McDonough, Georgia, Renee Little, 33, McDonough, Georgia, Maurice Lawson, 36, Powder Springs, Georgia, Todd Taylor, 54, Fairburn, Georgia, Paige McDaniel, 49, Stockbridge, Georgia, Donald Fontenot, 52, Locust Grove, Georgia, and Anthony Richard, 44, Locust Grove, Georgia, have pleaded guilty to conspiracy to defraud the United States in a mortgage fraud scheme spanning more than four years and resulting in the approval of more than 100 mortgages based on fabricated documents and false information.

According to the charges and other information presented in court: The defendants participated in a conspiracy in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.

Listing agents Eric Hill and Robert Kelske represented a major nationwide homebuilder and helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, real estate agent Anthony Richard falsely claimed to represent homebuyers as their selling agent in order to receive commissions from the home sales.  In reality, Richard had never even met the homebuyers he claimed to represent.  To avoid detection, he often notified closing attorneys that he would be unable to attend the closing and sent wire instructions for the receipt of his commissions.  When Richard received his unearned commissions, he kicked back the majority of the commissions to Hill or Kelske for enabling him to be added to the deal, keeping a small share for his role in the scheme.

Many of the loans are insured by the Federal Housing Administration (FHA) resulting in claims being paid for mortgages that have defaulted.

“These defendants brazenly manipulated the real estate lending process by using their knowledge of the system,” said Acting U.S. Attorney Kurt Erskine.  “Mortgage fraudsters threaten the soundness of the real estate market in our community and divert critical resources away from those borrowers who properly qualify for loans.  Rooting out bad actors who attempt to abuse the system for their own personal gain makes the mortgage lending system safer and fairer for everyone.”

“These defendants who dragged down our economy by using deception, will now be sentenced and forced to reimburse the victims of their conspiracy,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI is committed to combating such criminal activity to protect our citizens and the real estate market from predators who are most interested in pocketing money that they have no right to.”

“These offenders engaged in blatant criminal acts with the sole purpose of enriching themselves at the cost of a federal housing program designed to assist millions of American homebuyers.  Their fraudulent undertaking strikes at the fiscal integrity of the FHA and we will work diligently in conjunction with our law enforcement partners to hold them accountable” said Wyatt Achord, Special Agent in Charge, HUD Office of Inspector General.

“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who waste, steal, or abuse the resources of the Government-Sponsored Enterprises regulated by FHFA.  We are proud to have partnered with the U.S. Attorney’s Office for the Northern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.

These defendants have agreed to pay restitution to the victims of their conspiracy, including the Department of Housing and Urban Development, which insures many of the residential mortgages in the United States. Sentencing hearings have been set for these defendants before U.S. District Judge Mark H. Cohen.

A twelfth defendant, Cephus Chapman, 49, Warner Robins, Georgia is awaiting trial.  Members of the public are reminded that the indictment only contain charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, Department of Housing and Urban Development Office of Inspector General, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorneys Alison Prout and Ryan Huschka are prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

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12 charged in multi-year mortgage fraud scheme

Stephanie Abbott —  September 21, 2020 — Leave a comment

Eric Hill, 50, Tyrone, Georgia (charged by Information); Robert Kelske, 52, Smyrna, Georgia; Fawziyyah Connor, 41, Tyrone, Georgia; Stephanie Hogan, 57, Norcross, Georgia; Jerod Little, 42, McDonough, Georgia; Renee Little, 33, McDonough, Georgia; Maurice Lawson, 36, Powder Springs, Georgia; Todd Taylor, 54,  Fairburn, Georgia; Paige McDaniel, 49, Stockbridge, Georgia; Donald Fontenot, 52, Locust Grove, Georgia (charged by Information); Anthony Richard, 44,  Locust Grove, Georgia; Cephus Chapman, 49, Warner Robins, Georgia, have been charged in a mortgage fraud scheme allegedly spanning more than four years and resulting in the approval of more than 100 mortgages based on fabricated documents and false information.

According to the indictment, and other information presented in court: The defendants participated in a scheme in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.  Listing agents Eric Hill and Robert Kelske represented a major nationwide homebuilder, and helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate the their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, real estate agents Anthony Richard and Cephus Chapman falsely claimed to represent homebuyers as their selling agents in order to receive commissions from the home sales.  In reality, these real estate agents had never even met the homebuyers they claimed to represent.  To avoid detection, the agents often notified closing attorneys that they would not be available for the home closing, and sent wire instructions for the receipt of their commissions.  When these purported selling agents received their unearned commissions, they kicked back the majority of the commissions to Hill or Kelske for enabling them to be added to the deal, keeping a small share for their role in the scheme.

Many of the loans are insured by the Federal Housing Administration (FHA) resulting in claims being paid for mortgages that have gone through loan modification.

“These defendants allegedly used their knowledge of the real estate lending process to manipulate the system for their own benefit,” said U.S. Attorney Byung J. “BJay” Pak.  “Mortgage fraudsters threaten the soundness of the real estate market in our community.  We will investigate and charge anyone who takes advantage of our mortgage lending system for their own personal gain.”

“These charges represent the government’s commitment toward combating such alleged criminal activity,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “We will steadfastly protect American citizens and the real estate market from predators who drag down our economy by deceit to line their own pockets.”

“What we have here is a group of mortgage industry professionals that have allegedly perpetrated a sophisticated mortgage fraud for profit scheme that was designed to enrich themselves at the expense of a federal housing program,” said Wyatt Achord, Special Agent in Charge, Office of the Inspector General, U.S. Department of Housing and Urban Development. “The efforts that brought forward these charges demonstrate that when law enforcement is made aware of such schemes, we will commit the necessary resources to make sure that fraudsters are brought to justice.”

“As charged, the defendants engaged in a multiyear scheme to defraud Fannie Mae and Freddie Mac.  The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) will investigate and hold accountable those who seek to victimize these Government Sponsored Entities supervised and regulated by FHFA”, said FHFA-OIG Special Agent in-Charge Edwin Bonano.

Members of the public are reminded that the indictment and informations only contain charges.  The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, Department of Housing and Urban Development Office of Inspector General, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorney Alison Prout is prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern

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