Archives For inflated appraisal

Sam Tuttle, a vice-president and loan officer at PC Bank Home Loans, Ben Leske, a loan officer at PC Bank Home Loans, Angela Crozier, a senior loan processor at PC Bank Home Loans, and Ed Rounds, a loan officer at PC Bank Home Loans, were indicted by a grand jury in the U.S. District Court for the Western District of Washington at Tacoma and charged with conspiracy to make false statements on loan applications and to commit bank fraud and bank fraud, .

According to the indictment, from 2004 through 2008, Tuttle, Leske, Crozier and Rounds, along with Shawn Portmann, a vice-president and loan officer at PC Bank Home Loans, Craig Meyer, a vice-president and loan officer at PC Bank Home Loans, and Alice Barney, Portmann’s personal assistant, and other co-conspirators, knowingly made false statements and willfully overvalued property for the purpose of influencing the actions of Pierce Commercial Bank and other federally insured financial institutions, in connection with applications for mortgage loans.  PC Bank Home Loans was a mortgage lending office of Pierce Commercial Bank. During the time they were employed at PC Bank Home Loans, the alleged conspirators originated in excess of 5,000 mortgage loans representing in excess of $1 billion in loan proceeds. The loans detailed in the indictment are alleged to have contributed to the failure of Pierce Commercial Bank.

The indictment alleges that the conspirators solicited individuals, including through mass marketing, who were seeking to purchase homes.  They were solicited to prepare and submit mortgage loan applications regardless of whether they might qualify for the loans. The co-conspirators caused loan applications to be prepared based upon fraudulent representations related to gross monthly income, employment status, rental status, assets and liabilities and whether the property would be used as a primary residence.  Sometimes the false statements were made with the knowledge of the borrowers and in other cases, the borrowers did not know the false statements were being inserted. If the borrowers did not qualify, co-conspirators would, at times, seek the assistance of Portmann and other co-conspirators for advice on how to falsely modify the loan applications to ensure they passed underwriting.  Among the assistance provided by Portmann was the use of his assistant, Barney, to provide a Verification of Rent form for inclusion in the loan package, that falsely asserted the borrower was paying rent for an apartment owned by Portmann when, in fact, the borrower was not residing in, and had never resided in, the apartment.

The indictment further alleges that the co-conspirators would collude with third parties, including appraisers, to ensure the loans successfully closed.  The co-conspirators would pressure appraisers to generate specific values, even when told that the values were not supported by appraisal methods.

The indictment also alleges that when there were defaults on loans that were sold into the secondary market, the co-conspirators would take steps to ensure that Pierce Commercial Bank and the secondary investors did not discovery the underlying fraudulent statements.  The efforts included Portmann, Tuttle and Meyer forming a separate company to buy defaulted loans back from secondary investors so that no further investigation would be done on the defaulted loans.

According to the indictment, the fraudulent scheme caused in excess of $9.5 million in losses to Pierce Commercial Bank, secondary investors and HUD/FHA.

Janna Nassida, 45, West Mifflin, Pennsylvania, and James Nassida, 48, Pittsburgh, Pennsylvania, were charged by a federal grand jury in a two count indictment with wire and bank fraud conspiracy.

According to the indictment, from 2002 to 2008 James Nassida and his sister Janna Nassida knowingly conspired with other individuals known to the grand jury to defraud lenders and consumers. James and Janna Nassida worked at Century III Home Equity, a mortgage broker firm. The fraud scheme involved the submission of loan applications to lenders that contained material misrepresentations about the borrowers’ financial conditions, such as inflating borrowers’ incomes and assets. James and Janna Nassida, along with others who worked at Century III, also submitted bogus supporting documentation for the misrepresentations contained in the applications, as well as appraisals that overstated the values of the properties serving as collateral for the loans.

The law provides for a maximum total sentence of 60 years in prison, a fine of $2,000,000 or both.

The indictment was announced by United States Attorney David J. Hickton.  Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.

Kevin Campbell, 53, Pyesville, Maryland, was sentenced to 19 months in prison followed by five years of supervised release for conspiring to commit mail, wire and bank fraud arising from mortgage fraud schemes resulting in losses totaling approximately $1.2 million and was ordered to pay restitution of $1,182,822.

Jonathan L. Miles, 45, Perry Hall, Maryland to 18 months in prison followed by five years of supervised release for conspiring to commit bank fraud, and entered an order that Miles pay restitution of $1,182,822.

Campbell invested in Baltimore residential real estate, and controlled four companies that bought and sold residential real estate: KMJ Realty LLC; E&W Realty LLC; C Realty LLC; and City Realty LLC. Miles was a loan officer for a mortgage brokerage company formerly located in Reisterstown, Maryland. Continue Reading…

Kenneth Sweetman, 34, Nutley, New Jersey, was sentenced to 24 months in prison for his role in a massive mortgage fraud scheme involving multiple properties in Elizabeth, New Jersey.  Sweetman previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiring to commit wire fraud affecting a financial institution.

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