Archives For Loan Modification

Mark Savransky, New York, pleaded guilty today to scamming 32 homeowners out of $568,000 in a mortgage modification scheme.

The defendant operated a mortgage modification business in Nassau County, New York using the name Mark Savran. Between 2008 and 2014, he promised 32 homeowners in Nassau County and elsewhere that after securing modifications, he would hold their mortgage payments in trust and forward them to the financial institutions servicing the homeowners’ mortgages.

Instead, the defendant converted the funds for personal use, stealing approximately $568,000 from these homeowners. Among other things, Savransky used the funds for ATM cash withdrawals, credit card payments, child support, car payments, gasoline, travel expenses, restaurants, grocery stores, department stores and Netflix.

Savransky’s clients were typically residential homeowners who had purchased their homes using a subprime adjustable rate mortgage sometime between 2006 and 2009. When the payments became more than the homeowner could afford, homeowners hired the defendant to assist in obtaining a mortgage modification.

Savransky requested that all paperwork from the bank be given to him and if additional paperwork was sent by the bank to the victim, he demanded that it be given to him immediately, preferably unopened.

The defendant then counseled clients to give him the monthly mortgage payment that was due under the modified mortgage. Savransky informed his clients that he would make the payments on their behalf and, in doing so, create a record of payment that would prevent a lender from denying that payments were made or from reneging on any mortgage modification that was obtained. At the defendant’s request, these payments were mostly made in cash or by check that did not include the payee. Savransky later completed the payee portion of the check, thereby giving him the means to misappropriate the funds.

 Because the mortgage payments weren’t made, lenders started to foreclose on the properties belonging to the defendant’s clients. When some of the homeowners complained to him, some of them received a limited amount of repayment.

Savransky’s victims include residents from Amityville, Baldwin, Bayside, Brentwood, the Bronx, Brooklyn, East Northport, Farmingdale, Hempstead, Hicksville, Huntington, Levittown, Lynbrook, Malverne, Merrick, Mount Vernon, New Hyde Park, Queens Village, Richmond Hill, Riverhead, Uniondale and, Westbury, New York.

The defendant was arrested in August 2015 by NCDA detective investigators and arraigned on grand jury indictment charges in October 2017.

Savransky pled guilty to two counts of Grand Larceny in the Second Degree (a C felony) and one count of Scheme to Defraud Second Degree (an A misdemeanor)

The defendant faces a maximum of one to six years in prison when he is sentenced on January 10. He is due back in court on December 4.

The announcement was made by Nassau County District Attorney Madeline Singas.

This defendant preyed on vulnerable homeowners during the height of the mortgage crisis and swindled them out of more than a half million dollars,” DA Singas said. “In many cases, homeowners didn’t know they were in trouble until lenders started foreclosing on their homes. I thank the Bronx District Attorney’s Office, the Suffolk County District Attorney’s Office and the Suffolk County Police Department for referring these cases to us for prosecution.”

This case was initially referred to the Nassau County District Attorney’s Office by the Bronx County District Attorney’s Office. Additional cases were also referred by the Suffolk County District Attorney’s Office in conjunction with the Suffolk County Police Department.

Deputy Bureau Chief Peter Mancuso of DA Singas’ Financial Crimes Bureau is prosecuting this case. Joseph Conway, Esq. represents the defendant.

 

Jeffrey Halpern, 63, Hewlett, New York, a sole proprietor of a purported loan modification consulting company was sentenced today to 57 months in prison for fraudulently billing clients more than $400,000 for services that were never performed.

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

Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of more than $400,000.

Halpern previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court. http://www.mortgagefraudblog.com/?s=Jeffrey+Halpern

In addition to the prison term, Judge Sheridan sentenced Halpern to three years of supervised release and ordered to pay $411,000 in restitution.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited investigators with the U.S. Attorney’s Office and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Mark Higgins; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.

The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Mitchell C. Elman Esq., Port Washington, New York

Mark Goldstein and Drew Alia, Pennsylvania, and their five Pennsylvania mortgage foreclosure companies were sued today for deceiving consumers into signing contracts to have their mortgage loans modified and never delivering the services paid for.

Goldstein and Alia’s companies included GMK Solutions, the Foreclosure Law Center; Century Legal Group; Alia Law Group; and the Law Offices of Drew Alia.  Pennsylvania homeowners and other consumers wound up agreeing to pay the defendants more than $280,000 through their scam conducted between 2008 and 2015.

Here’s how the scam worked:

The defendants signed contracts with homeowners, promising to do a home loan audit and a mortgage modification – with the goal of lowering the consumer’s monthly mortgage payments or interest rate, or saving their home from foreclosure.

The defendants took cash deposits, often thousands of dollars, and then failed to produce the audits or mortgage modifications. To hide their scam, they told homeowners not to contact their mortgage lenders or make any payments because they were “handling” negotiations on the homeowners’ behalf.  When anxious consumers began to demand updates on the status of their loans, the defendants dodged their calls and offered no refunds.

During the scam, many homeowners received notices from their lenders stating that if they did not respond, their homes would be foreclosed upon or sold at sheriff’s sale.  In one instance, a consumer paid $3,500 up front for mortgage foreclosure services, and after the defendants assured the homeowner they had stopped the Sheriff’s sale, the home was lost anyway.

Another consumer from Delaware County called the Foreclosure Law Center for a loan modification to keep her home out of foreclosure, and paid a $700 deposit. The night before a sheriff’s sale, the defendants contacted the consumer and told her to file for bankruptcy to delay the sale. The bankruptcy filing was dismissed by the court. Ultimately, the defendants never delivered services or helped her and wouldn’t refund her deposit.

This consumer, Kathleen Zang, said: “The Foreclosure Law Center told me not to contact my mortgage company and they were handling everything on my behalf. I had to file for bankruptcy after I learned that communication was never made to keep my house — where my children and family lived. I was outraged after learning from my mortgage company that no one from the Foreclosure Law Center had been in touch with them. Other people lost their homes because of this company. I lost $700 — and I’m grateful to Attorney General Shapiro and his Bureau of Consumer Protection for stepping up for consumers like myself.”

The Office of Attorney General received 21 complaints from Pennsylvania consumers, and nearly 50 more from consumers across the country, who entered into mortgage modification contracts. In some cases, homeowners instructed by the scammers to not pay their mortgages ultimately lost their homes in sheriff’s sales.

Attorney General Josh Shapiro made the announcement.

Defendants Mark Goldstein, Drew Alia and their companies preyed upon dozens of Pennsylvanians and other consumers who thought they were making a smart decision for their home and family,” Attorney General Shapiro said. “They wanted to lower their interest rates, modify their mortgages, and save their homes. Instead, all they received from these defendants were false promises and no services. Some even lost their homes.  This misleading scam was outrageous and I’m suing to get restitution for every person and hold these companies accountable.

In addition to claims filed under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, the Attorney General’s lawsuit bases other claims against the defendants under the Pennsylvania Mortgage Licensing Act.

“If you believe you were victimized by defendants Goldstein, Alia or any of their companies, or any other false mortgage modification deal, call my office today or email us at scams@attorneygeneral.gov,” Attorney General Josh Shapiro said. “I want to hear from you, and we’ll seek justice and restitution for you.”

The lawsuit in the Philadelphia County Common Pleas Court seeks injunctive relief and restitution in excess of $280,000 total for all consumers who are currently or have ever been in a transaction with any of these companies or their affiliates.

Assad Suleiman, 48, Irvine, California, was convicted and sentenced on Friday to eight years in state prison for operating an unlawful loan modification and money laundering scam that defrauded nearly $2.3 million from 387 homeowners.

Co-defendants Kevin Suleiman, 39, Irvine, California and Rosa A. Barraza, 45, Santa Ana, California were charged on October 3, 2017, with 36 felony counts of money laundering, 12 felony counts of grand theft, 10 felony counts of commercial burglary, and one felony count each of conspiracy to commit grand theft, money laundering, and unlawful loan modification, with sentencing enhancements for aggravated white collar crime over $500,000 and property damage over $1.3 million.

Assad Suleiman was convicted of, and Kevin Suleiman and Rosa Barraza are accused of the following:

Between May 2012 and July 2017, engaging in a sophisticated loan modification scheme and operating as Jefferson Legal Group, Los Angeles, California; Simplify Law Group, Irvine, California; Synergy Law Center, Anaheim, California; Wilshire Debt Advisors, Irvine California:

  • Operating without any lawyers involved, despite the misleading entity names
  • Charging advance fees for loan modifications and, if no loan modification was approved, ceasing communication with the victims after receiving an initial payment
  • If the defendant did get a loan modification approved for the victims, lying to the victims and telling them a trial payment and/or lump sum payment to their lender was required to cover taxes and various fraudulent fees
  • Directing the homeowner to make their trial payment directly to one of the four fraudulent entities for a three to four month period and falsely telling the homeowner that the trial payments would be forwarded to their lender
  • If the victims had any money still available, demanding additional payments to bring their impound accounts current
  • Failing to forward any payments to the mortgage lenders and laundering the money by depositing funds to the defendants’ Chase Bank and Bank of America accounts under their fraudulent businesses names
  • Defrauding a total of 387 victims with a loss of at least $2.28 million.

Suleiman pleaded guilty on July 13, 2018, to the following felony counts, (43) Money laundering, (10) Grand theft, (10) Second degree burglary and conspiracy to commit grand theft, money laundering, and unlawful loan modification.  Suleiman was ordered to pay $1,568,717 in restitution.

Kevin Suleiman is scheduled for a pre-trial hearing on July 27, 2018, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana, California. Barraza is scheduled for a pre-trial hearing on July 30, 2018, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana, California.

Barraza and Assad Suleiman were arrested on October 5, 2017, during a warranted search of their office. The Orange County District Attorney’s Office (OCDA) recovered $500,000 in cash. Kevin Suleiman was arrested by U.S. Marshals in San Diego on January 10, 2018.

It is against California law to charge an advance fee for a loan modification. Homeowners needing foreclosure relief are typically in financial distress and vulnerable to losing their family’s principal asset. In many instances, the conspirators directed the homeowners to stop making their mortgage payments, ostensibly to prove to the lenders that a loan modification was necessary and freeing up funds to pay the conspirators. Directing homeowners to breach their contracts in many instances would precipitate the commencement of foreclosure proceedings that would otherwise be unnecessary.

This fraud scheme was particularly effective and insidious because the lenders were never aware that trial payments and impound fees had been collected by the conspirators, and the homeowners believed the lies the conspirators made to them that their monies would be forwarded to their lenders. Many homeowners never discovered the fraud until their lenders commenced foreclosure against their homes. The conspirators deliberately chose entity names that implied attorneys were involved, and when complaints began to pile up or suspicious raised, the same conspirators would contact victims with new entity names, while the old entity simply disappeared in a financial “hit and run.”

The OCDA, along with the U.S. Federal Housing Finance Agency Office of Inspector General and U.S. Department of Housing and Urban Development Office of Inspector General, investigated this case.

Prosecutor: Deputy District Attorney George McFetridge, Major Fraud Unit

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.

 

Herzel Meiri, 64, and Amir Meiri, 35, pled guilty yesterday to conspiracy to commit wire fraud and bank fraud, in connection with their scheme to fraudulently induce distressed homeowners to sell their homes for little or no consideration to a company they owned and controlled.

According to allegations in the contained documents filed in federal court, including the Indictment and Complaint:

From 2013 to 2015, Herzel Meiri and Amir Meiri defrauded distressed homeowners throughout the Bronx, Brooklyn, and Queens, New York.  The Meiris and others falsely represented to these homeowners – some of whom were elderly or in poor health – that they could assist them with a loan modification or similar relief from foreclosure that could result in the homeowners saving their homes.  But rather than actually assisting these homeowners, the defendants deceived them into selling their homes for less than the homes’ actual values to Launch Development LLC (“Launch Development”), a for-profit company owned and controlled by the Meiris.

Specifically, the Meiris’ direction fraudulently induced the homeowners to engage in a type of short sale in which the homeowner would sell the property to Launch Development.  The Meiris and their conspirators falsely assured the homeowners that their homes would be returned to them after a short period, and that they could remain in their homes throughout the entire process.  At the closing that followed, homeowners were encouraged to sign fraudulent documents, that unbeknownst to the homeowners transferred the homes Launch Development.  Homeowners often were then forced to vacate their homes, and in many cases had no other place to live. Launch Development resold many of the homes, which were purchased at fraudulently deflated prices, for an enormous profit.

Herzel Meiri, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000 or twice the gross gain or loss from the offense.  He also consented to forfeit $6,469,291.41, as well as 31 real properties, four bank accounts, and one escrow account, as proceeds traceable to the offense.

Amir Meiri, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 30 years in prison and maximum fine of $1,000,000 or twice the gross gain or loss from the offense.  He also consented to forfeit the same 31 real properties, four bank accounts, and one escrow account, as proceeds traceable to the offense.

The defendants will be sentenced by before U.S. District Judge Edgardo Ramos on July 27, 2018.

Robert S. Khuzami, the Attorney for the United States praised the outstanding work of the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program, and the New York State Department of Financial Services for their investigative efforts and ongoing support and assistance with the case.

The prosecution of this case is being overseen by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Andrew Thomas and Sheb Swett are in charge of the case.

Michael Paul Paquette, 34, San Juan Capistrano, California; Allan Jessie Chance, 34, Temecula, California; and Dennis Edward Lake, 59, Costa Mesa, California, were indicted on federal mail fraud charges that allege they solicited homeowners on the verge of foreclosure with bogus promises of loan modifications with interest rates as low as 2 percent.

The three men were arrested pursuant to an eight-count indictment returned by a federal grand jury on December 20, 2017

Paquette, Chance and Lake were arraigned on the indictment in United States District Court, where they all entered not guilty pleas and were ordered to stand trial on March 6, 2018. All three defendants were released on $15,000 bonds.

According to the indictment, Paquette and Chance operated under aliases and told distressed homeowners that they worked for the Laguna Hills-based HAMP Services – which sounded similar to the Home Affordable Modification Program (HAMP), a legitimate government program which permanently reduced mortgage payments to affordable levels for qualifying buyers.

Paquette and Chance told victims that they were approved for a government-affiliated loan modification, but they needed to make three “trial payments” before the loan would be modified, according to the indictment. They also falsely told the victims that their money would be held in a trust or escrow account. Chance falsely claimed that he had experience in getting home loans modified because he had worked at Bank of America.

After victims began making “trial payments,” their files were referred to Lake, who ran a Newport Beach-based business called JD United. The indictment alleges that Lake and his employees told victims that they were working on loan modifications, furthering hope that the loan modifications promised by Paquette and Chance were coming and that there was no need to contact law enforcement about the “trial payments” that had been paid.

When being pitched on the loan modification service, the victims were never told that $800 of the “trial payments” went to JD United, and that Paquette and Chance received commission payments taken directly from the accounts where the “trial payments” were deposited. The indictment further alleges that none of the victim money went to the lenders or a government agency for a loan modification.

Investigators believe that over 500 victims nationwide paid at least $2.5 million dollars to the defendants and others in “trial payments.”

The scheme allegedly ran from the beginning of 2014 through April 2015.  Paquette and others originally started soliciting victims claiming that they worked for Hope Services. After victims made many complaints about Hope Services, new victims were solicited using the name HAMP Services starting in late 2014.

Two other defendants involved in the scheme have pleaded guilty to federal charges and are pending sentencing.

Paquette, Chance, and Lake are charged with conspiracy to commit mail fraud. Additionally, Paquette is charged in three substantive mail fraud counts, Chance in four mail fraud counts, and Lake in six mail fraud counts. If they were to be convicted, each defendant would face a statutory maximum sentence of 30 years in federal prison for each count.

The case against Paquette, Chance and Lake is the result of an investigation by the Federal Bureau of Investigation and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). The Federal Trade Commission provided substantial assistance.

The case is being prosecuted by Assistant United States Attorney Vibhav Mittal of the Santa Ana Branch Office.

Ana Maritza Gomez, 45, Hyattsville, Maryland, was sentenced to 30 months in prison followed by 3 years of supervised release for conspiracy to commit mail and wire fraud arising from a scheme to defraud victims through a foreclosure rescue scam.  United States District Judge Roger W. Titus also ordered Gomez to pay $205,280.25 in restitution.

Two co-defendants, Rene De Jesus De Leon, 49, Silver Spring, Maryland, and Pedrina Rodriguez Bonilla, 39, Silver Spring, Maryland, have also pleaded guilty to conspiracy to commit mail and wire fraud for their involvement in the same scheme.

According to evidence presented at the six-day trial, from at least late 2011 to August 2015, Gomez and her co-conspirators claimed that they could help homeowners who wanted to modify their mortgage loans and prevent foreclosure of their homes. The conspirators sold the victims on a “principal reduction” program that included an upfront fee, typically between $3,000 and monthly payments for 10 to 15 years. Gomez and her co-conspirators told the victims to make monthly payments to the conspirators and to companies they controlled, in lieu of to the homeowners’ lenders. The companies controlled by Gomez’s co-conspirators were named Marketing Multiservices LLC and Innovative Solutions Services LLC.

According to the indictment and court documents, the conspirators mailed monthly invoices to the homeowner victims that falsely indicated that the “principal balance” was being paid down. Some of the victims paid Gomez in person each month at her residence; or some of the victims deposited their payments directly into bank accounts controlled by Gomez’s co-conspirators. The conspirators told the victims not to open any mail from their lenders and instead provide it to the conspirators. The conspirators did not, however, negotiate with lenders of behalf of the homeowners. Many of the victims lost their homes.

Sentencing for Rene De Leon is scheduled for December 14, 2017 at 10 a.m. and Pedrina Bonilla is scheduled for sentencing on December 13, 2017 at 9:00 a.m.

The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning, Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Chief Henry P. Stawinski III of the Prince George’s County Police Department; Postal Inspector in Charge Robert B. Wemyss of the U.S. Postal Inspection Service – Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.

 

Acting United States Attorney Stephen M. Schenning commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, and the Prince George’s County State’s Attorney’s Office for their work in the investigation.  Mr. Schenning thanked Assistant United States Attorney Kristi N. O’Malley and Special Assistant United States Attorney Jolie F. Zimmerman, who prosecuted the case.

Kevin Frank Rasher, 45, Orange County, California, was sentenced to 97 months in federal prison Friday for fraudulently taking $2.2 million from distressed homeowners based on false promises that he could help them avoid foreclosure by obtaining modifications to their mortgages.   Rasher, who has been in custody since his arrest at his Coto de Caza residence over a year ago, pled guilty to 12 counts of mail fraud in May. Rasher was sentenced by United States District Judge Josephine L. Staton who also ordered him to pay $2.24 million in restitution to his victims.

According to court documents, Rasher admitted that, between 2011 and March 2016, he falsely told distressed homeowners that he was an employee of the U.S. Department of Housing and Urban Development and/or an attorney, and that the homeowners had been approved for a reduced mortgage payment or interest rate. Rasher then instructed the homeowners to mail their mortgage payments to one of his businesses, claiming that he would forward the money to the homeowners’ mortgage lenders. Instead of forwarding the money to the mortgage lenders, Rasher deposited the money into his bank accounts and used it to pay his own personal expenses.

Rasher admitted that he fraudulently obtained approximately $2.24 million from more than 500 victims.

This case was investigated by the U.S. Department of Housing and Urban Development, Office of the Inspector General; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); the United States Postal Inspection Service; the Federal Housing Finance Agency’s Office of the Inspector General; and the Federal Bureau of Investigation.

The case against Rasher was prosecuted by Assistant United States Attorneys Rosalind Wang and Robert J. Keenan of the Santa Ana Branch Office.

Kwame Insaidoo, 61, Bay Shore, Long Island, New York, the former executive director of United Block Association (“UBA”), a New York-based non-profit organization, was sentenced to 48 months in prison and his wife and Roxanne Isaidoo, 63, Bay Shore, Long Island, New York, was sentenced to 30 months in prison, in connection with their embezzlement of over $580,000 from UBA, defrauding their mortgage lender of approximately $200,000, and related crimes.  They were convicted on May 2, 2017, following a one-week jury trial before United States District Judge Valerie E. Caproni, who also imposed today’s sentence.

According to the Indictment, other filings in Manhattan federal court, and the evidence admitted at trial:

In 2011, Kwame Insaidoo and Roxanne Isaidoo engaged in a scheme to defraud their mortgage lender in connection with a modification of their mortgage under the federally-sponsored Home Affordable Modification Program, by underreporting their income and assets, including the hundreds of thousands of dollars they had embezzled from UBA.  This scheme led to a write-off of almost $200,000 from Kwame Insaidoo and Roxanne Isaidoo’s home mortgage.

UBA was a non-profit organization headquartered in New York, New York, that was controlled by Kwame Insaidoo, its former Executive Director.  UBA had contracts with New York City through which it received taxpayer funds, including federal funds, to operate and provide healthy meals and programming to the elderly at four senior centers in Upper Manhattan.

As the jury found, Kwame Insaidoo abused his authority as UBA’s Executive Director to embezzle, with the assistance of his wife, Roxanne Isaidoo, over $580,000 of UBA’s funds for his own benefit and that of his wife and son.  Kwame Insaidoo and Roxanne Isaidoo concealed their embezzlement by laundering the money, in part, through a shell company that they had created.  Kwame Insaidoo and Roxanne Isaidoo used the embezzled funds to pay for personal expenses, including the mortgage for their Long Island residence and the purchase of a Mercedes Benz and a Cadillac.  They also wired more than $300,000 to family members living abroad.    

In an effort to evade scrutiny regarding the embezzled funds, Kwame Insaidoo repeatedly lied to the City, including to its auditors, in order to maintain UBA’s funding and to conceal the funds he and his wife had diverted to their shell company. 

 

Acting U.S. Attorney Joon H. Kim said:  “As a Manhattan jury found, Kwame Insaidoo and Roxanna Insaidoo stole hundreds of thousands of dollars from a government-funded non-profit organization dedicated to serving senior citizensThe Insaidoos enriched themselves and their family with taxpayer money that was supposed to support four senior centers in Upper Manhattan.  Now this husband-and-wife crime duo will serve time in prison for those crimes.”  

In imposing sentence, Judge Caproni stated that the “message has to be sent” that “it is not acceptable to steal money from the City that is designed for charitable goals to line your own pockets.

In addition to the prison terms imposed today by Judge Caproni, Kwame Insaidoo and Roxanne Isaidoo were ordered to forfeit a sum of $779,039.62.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced the sentence and praised the outstanding investigative work of the New York City Department of Investigation and the Criminal Investigators of the United States Attorney’s Office for the Southern District of New York.

The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark and David Zhou are in charge of the prosecution.