Archives For Massachusetts

Robert Pena, 68, Falmouth, Massachusetts, pled guilty in federal court in Boston in connection with defrauding the Government National Mortgage Association (Ginnie Mae) out of approximately $2.5 million. Pena pleaded guilty to one count of conspiracy and six counts of wire fraud.  U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for January 5, 2018.

Pena was president and founder of the now-defunct mortgage company, Mortgage Security Inc. (MSI), which contracted with Ginnie Mae to pool eligible residential mortgage loans and then sell Ginnie Mae-backed mortgage bonds to investors.  MSI was responsible for servicing the loans in the pools it created, including collecting principal and interest payments from borrowers, as well as loan payoffs, and placing those funds into accounts held in trust by Ginnie Mae, which would ultimately pass them along to investors.  Among other things, Ginnie Mae required issuers like MSI to provide regular reports concerning the status of the loans in the pools.

Beginning in 2011, Pena began diverting money that borrowers were sending to MSI.  Specifically, Pena deposited high-dollar, loan-payoff checks into bank accounts unknown to Ginnie Mae and then used those funds for personal and business expenses.  Pena also diverted borrowers’ escrow funds and mortgage-insurance premiums for his own use.  In total, Pena took approximately $2.5 million, which Ginnie Mae then had to pay to the investors whose investments it had guaranteed.  Pena also attempted to cover up his scheme by providing false reports to Ginnie Mae about the status of the loans MSI was servicing.

The charging statues provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.

Acting United States Attorney William D. Weinreb; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement.  Valuable assistance was provided by the U.S. Department of Veterans Affairs, Office of Inspector General; the U.S. Department of Agriculture, Office of Inspector General; and the Falmouth Police Department.  Assistant U.S. Attorney Brian LaMacchia of Weinreb’s Civil Division is prosecuting the case.

Jasmin Polanco, 37, Methuen, Massachusetts, a real estate closing attorney, and Vanessa Ricci, 40, Methuen, Massachusetts. a mortgage loan officer, each pleaded guilty to one count of conspiracy to commit bank fraud in connection with a sweeping conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in Merrimack Valley, Massachusetts.

Separately, a real estate broker from Methuen, Greisy Jimenez, 49, Methuen, Massachusetts, was indicted on two counts of bank fraud and one count of conspiracy to commit bank fraud in connection with the same alleged scheme. In addition, U.S. District Court Judge Rya W. Zobel sentenced Hyacinth Bellerose, 51, a real estate closing attorney from Dunstable, Massachusetts, to time served and one year of supervised release to be served in home detention after pleading guilty to participating in the same conspiracy.

The charges arise out of an alleged scheme to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen, Massachusetts, in which the purported sellers remained in their homes, with their debt substantially reduced.

The alleged conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater” with homes worth less than the mortgage debt they owed. As part of the alleged scheme, Jimenez, Polanco, Ricci, Bellerose and others submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales, thereby releasing the purported sellers from their unpaid mortgage debts, while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in their homes, with their debt substantially reduced.

The charging documents allege that as part of the conspiracy:

The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties, when in fact, the transactions were not arms-length; the buyers and sellers were frequently related, and the sellers retained control of (and frequently continued to live in) the properties after the sale;

The conspirators submitted phony earnings statements in support of loan applications that they submitted to banks in order to obtain financing for the purported sales; and

The conspirators submitted phony “HUD-1 Settlement Statements” to banks that did not accurately reflect the disbursement of funds in the transactions.

The charge of bank fraud and conspiracy to commit bank fraud provides for a sentence of no greater than 30 years in prison and a fine of $1 million.

U.S. District Court Senior Judge Douglas P. Woodlock scheduled Ricci’s sentencing for June 22, 2017. Polanco’s sentencing hearing has not yet been scheduled.

Acting United States Attorney William D. Weinreb; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program, made the announcement. Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Weinreb’s Economic Crimes Unit is prosecuting the cases.

Denise Bruce, 56, Hingham, Massachusetts, was sentenced  for defrauding mortgage companies in connection with multiple mortgages she obtained on a single residence.  U.S. District Court Senior Judge Douglas P. Woodlock imposed the sentence of two years in prison, five years of supervised release and restitution of $2,810,497.  In May 2016, Bruce pleaded guilty to five counts of bank fraud.

Between 2004 and 2008, Bruce fraudulently obtained five mortgage loans from different banks in amounts ranging from $325,000 to $487,500 on her Hingham property by submitting false information regarding her employment history, income, assets, and debt.  Bruce also filed fraudulent discharges of mortgages with the Plymouth County Registry of Deeds to create the appearance that earlier loans had been paid in full, when in fact, none of the loans had been paid.  In total, Bruce obtained $2,129,000 in proceeds from her fraudulent loans.

United States Attorney Carmen M. Ortiz; Steven Perez, Special Agent in Charge of the Federal Housing Finance Agency, Office of Inspector General, Northeast Region; and Christy Goldsmith Romero, Special Inspector General for the Office of the Special Inspector General for the Troubled Asset Relief Program, made the announcement.  The case was prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.

Suffolk County prosecutors are working with the state attorney general’s office as it investigates a Roxbury real estate dealer and two of his sons who are at the center of allegations of fraud and forgery involving numerous properties, according to a spokesman for the district attorney’s office.

Source: District attorney, AG investigate Roxbury real estate dealer – The Boston Globe

Robert E. O’Connor, 68, Florida, formerly of Beverly, Massachusetts, was sentenced by U.S. District Judge Richard G. Stearns to 29 months in prison, three years of supervised release and was ordered to pay restitution of $627,581, in connection with an fraud scheme involving 75 victims throughout the United States, including many in Massachusetts..  In June 2015, O’Connor pleaded guilty to 13 counts of mail fraud and 15 counts of wire fraud, all in connection with a fraudulent advance fee scheme in which individuals were induced to pay up-front fees to his co-defendant, Ann Ursiny, and her business Trace Financial Group, Inc., based on representations that those individuals would receive real estate loans, when in fact Ursiny never intended to make any such loans.  O’Connor participated in the scheme by recruiting people to apply for loans and pay the advance fees.  O’Connor received a “commission” of $1,000 for each person who paid the advance fees.

O’Connor, who was a self-employed mortgage broker before becoming involved with Ursiny in early 2010, personally solicited approximately 35 people to apply for Ursiny’s nonexistent loans, and also referred a Texas loan broker to Ursiny, which resulted in another 40 people being defrauded.  In total, O’Connor was responsible for about $627,000 in losses out of a total of about $933,000 resulting from Ursiny’s scheme.  Although O’Connor was unaware at the beginning that Ursiny was operating a scam, after several months when none of his clients received the promised funding, O’Connor began lying both to prospective applicants to get their fees and to existing clients to quiet their complaints.  O’Connor told them that some of his clients had in fact received loans from Ursiny or Trace, which he knew was untrue.  He also sent a fabricated letter to clients that purported to be from a satisfied customer claiming to have received financing from Trace, knowing the letter was a fake and that none of his clients ever received any funding from Ursiny/Trace.  In fact, victims’ funds were used for Ursiny’s personal and family expenses, and to pay “commissions” to agents.

In May 2016, Ursiny was sentenced 50 months in prison, to be served consecutive to the 71 month federal prison sentence imposed for a separate fraud scheme she orchestrated in Colorado.

United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.

Arthur Samuels, 41, Mattapan, Massachusetts, a former bank manager was sentenced to one year and one day in prison, two years of supervised release, and was ordered to pay restitution of $2,229,492 in connection with a multi-year, multi-property mortgage fraud scheme in Dorchester, Massachussetts.  In 2012, Samuels pleaded guilty to four counts of wire fraud and one count of bank fraud.

From 2007 to 2008, Samuels engaged in a scheme with Michael David Scott, and others, to purchase multi-family residences and then sell individual condominium units in the buildings to straw buyers.  Scott, a former realtor and developer, arranged to purchase multi-family residences and then sold individual condominium units to straw buyers recruited as investors by him, Samuels, and co-conspirators, Jerold Fowler and Thursa Raetz.  Scott and his co-conspirators recruited straw buyers with promises that they would not have to make down payments, pay any funds at closing, or be responsible for mortgage payments, and would share in profits when the units were resold.  In order to obtain mortgage loans for some of the straw buyers, Samuels created bogus bank deposits falsely representing that the straw buyers’ accounts had large balances with his bank.  Scott then submitted mortgage loan applications that falsely represented key information, such as the buyers’ income, personal assets, down payment, and intention to reside in the condominiums.  The mortgage lenders, (nine national mortgage companies and one local bank) were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closing.  In addition, Samuels also recruited a straw buyer for the purchase of two condominiums, and acted as a straw buyer himself on three properties.

In November 2015, Scott was sentenced to 135 months in prison, and Fowler and Raetz were sentenced to two years in prison.

Samuels was sentenced by U.S. District Court Senior Judge Mark L. Wolf .  United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case was prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz’s Criminal Division.

Joseph Pasquale, 39, Worcester, Massachusetts, to four years and nine months in federal prison for conspiracy to commit bank fraud and bank fraud. A federal jury found him guilty in January 2016.

According to testimony and evidence presented at trial, Pasquale worked as a real estate sales associate for a brokerage based in Cape Coral, Massachusetts. Between October 2007 and March 2008, he was involved in the negotiation and sale of four condominium units at the Arbors of Carrollwood, to clients in California and Massachusetts. Pasquale engaged in a conspiracy to conceal sales incentives from mortgage lenders, which these clients received from the seller, along with private loans that Pasquale made to the buyer-clients enabling them to bring cash to their respective real estate closings. As a consequence of his actions, Pasquale helped to cause a loss of approximately $937,000 to Wells Fargo Bank when the mortgages involved in the case went into foreclosure.

Pasquale was sentenced by U.S. District Judge Elizabeth A. Kovachevich.  The case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay L. Hoffer.

Michael David Scott, former real estate broker, 51, of Mansfield, Massachusetts, pleaded guilty to one count of wire fraud in connection a scheme to defraud a couple of the deposit they paid to purchase three properties in Randolph, Roxbury and Jamaica Plain, Massachusetts.

From February 2011 to October 2013, Scott fraudulently persuaded a couple to sign three Purchase & Sale Agreements to buy properties in Randolph, Roxbury and Jamaica Plain.  The couple deposited $199,000 with Scott under the false promise that their funds would be held in escrow.  However, Scott immediately spent the funds for his own use.   Furthermore, Scott knew that the first property was taken off the market by the sellers, that the bank holding the mortgage had refused to approve the sale of the second property, and that he had sold the third property to someone else.  Scott never informed the couple about the status of the properties, and when they tried to get a refund of their deposits, he falsely assured them their deals were still pending and refused to return their deposits.      Continue Reading…

Michael P. O’Donnell, mortgage broker, 54, Middleton, Massachusetts, was sentenced by U.S. District Judge Douglas P. Woodlock to three years in prison, two years of supervised release and ordered to pay a fine of $150,000 in connection with his role in 20 fraudulent loan transactions in the North Shore area of Massachusetts.  In July 2015, O’Donnell was convicted following a three-day bench trial of attempted bank fraud. Continue Reading…

Jerrold Fowler, 31, was sentenced to two years in prison, three years of supervised release, and ordered to pay restitution of $3,786,815 and to forfeit $7,413,712 and Thursa Raetz, 40, Virginia, was sentenced to two years in prison, three years of supervised release and ordered to pay restitution of $3,099,224 and to forfeit $7,413,712.  Both recruited participants into a multi-year, multi-property mortgage fraud scheme in Roxbury and Dorchester, Massachusetts.    Continue Reading…