Archives For Michigan

Paul Nicoletti, 60, Bloomfield Hills, Michigan, a former Oakland County lawyer was sentenced yesterday, January 30, 2020, to serve 70 months in federal custody on one count of conspiracy to commit bank fraud, and three counts of bank fraud.

According to the evidence introduced during the trial, Mr. Nicoletti, a lawyer and owner of a title company became involved in a scheme to obtain large mortgage loans from Fifth Third Mortgage, Michigan, a lending arm of Fifth Third Bank. Although somewhat complicated, the essence of the scheme involved real estate developers, a corrupt loan officer and Mr. Nicoletti working together to obtain large mortgage loans from Fifth Third Mortgage, Michigan, purportedly for the purchase and development of high-end properties in Bloomfield Hills and Birmingham, Michigan, based on numerous false statements both in the application and closing process of the loans, resulting in Fifth Third Mortgage, Michigan releasing over eight million dollars in loan proceeds.

More specifically, one or more of the conspirators would find and recruit “straw buyers” to serve as mortgage loan applicants for the purchase of real property which the conspirators wanted to purchase and develop. The straw buyers, who viewed themselves as “investors,” were paid a fee for the use of their names and credit histories in the loan applications and real estate transactions, and were promised a portion of the expected profit after the property was developed and resold. The straw buyers had no intention of living at or actually exercising ownership and control of the property, despite representations to the contrary in their applications, and in closing documents. Despite their good credit ratings, the straw buyers did not have the assets or income necessary to qualify for mortgages in the substantial amounts sought. Thus, false information pertaining to their income and assets was included in the mortgage loan applications to qualify them. Mr. Nicoletti’s role was to facilitate the fraudulent loans as the title agent by, among other things, falsely verifying that the borrowers made substantial down payments on the properties. To do so, Mr. Nicoletti obtained cashier’s checks, issued after the loan proceeds were released to his Continental Title account and which were funded by the loan proceeds themselves, bearing the names of the straw buyers as “remitters,” which he then re-deposited into his Continental Title account, making it appear as though the borrowers funded the substantial down payments. In fact, the borrowers brought no money to the closings. When the fraud was discovered by authorities, Mr. Nicoletti counseled the destruction of evidence of the fraud and also personally destroyed relevant electronic and paper records.

Mr. Nicoletti was the sixth person convicted as a result of this investigation. The loan officer, a mortgage broker, an appraiser and several of the real estate developers have previously been sentenced after entering guilty pleas relating to the scheme. The investigation was conducted by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorneys Craig Weier and John Neal.

Nicoletti received the sentence from the Honorable Victoria A. Roberts, United States District Judge, in Detroit, Michigan. Judge Roberts also ordered that the defendant serve two years on supervised release after his release from federal custody and pay restitution totaling $5,299,751.58. A jury returned guilty verdicts against Mr. Nicoletti on May 5, 2019 after a seven-day trial.

United States Attorney Matthew Schneider made the announcement today.

Lawrence Adell Sefa, 65, Fenton, Michigan has pleaded guilty today to racketeering. The guilty plea follows charges filed against him in 2017 for using a fake mortgage assistance scheme to steal tens of thousands of dollars from 33 Michigan residents who were facing foreclosures.

Between 2012 and 2016, Sefa, through his company LAS Loan Assistance Centers, promised victims that he could negotiate mortgage modifications and save their homes from foreclosure. Instead of delivering on the services he promised, Sefa did little to nothing to obtain modifications for the victims and many lost their homes in the process. Following an investigation by the Department of Attorney General, it was determined a large portion of Sefa’s clients, in addition to those who already filed complaints, did not receive the promised services from Sefa or LAS.

Sefa pleaded guilty to one count of Conducting a Criminal Enterprise, a 20-year felony late last month. The plea agreement includes three key stipulations:

  • If Sefa pays the entire restitution of $116,615 at or before sentencing, he agrees to be sentenced to 12 months of incarceration;
  • If Sefa pays half of the restitution at or before sentencing, his sentencing guidelines will be 24-40 months of incarceration; or
  • If Sefa pays no restitution at or before sentencing, his sentencing guidelines will be 30-60 months of incarceration.

Michigan Attorney General Dana Nessel made the announcement.

At a time when Michigan families are on the verge of losing their homes, the last thing they should have to worry about is Michigan businesses that take advantage of them in the process,” Nessel said. “These are hardworking men and women who needed help, but instead got cheated out of money they could not afford to lose. My office is dedicated to protecting these residents and ensuring bad actors are brought to justice.”

Any restitution that remains unpaid at the time of sentencing will be paid to qualifying victims out of the $97 Million Homeowner Protection Fund to ensure they receive timely payments. The State of Michigan will then seek reimbursement from Sefa.

Sefa will be sentenced by Judge Cavanaugh Friday, Aug. 2, 2019.

Richard Pierce, a Michigan business owner, was sentenced to serve a year and a day in prison for obstructing and impeding the internal revenue laws and committing bank fraud.

According to documents filed with the court, in 2007, Pierce  committed bank fraud by submitting a fraudulent loan application to a mortgage lender on which he failed to disclose that the buyer of a residential property was receiving a kickback from the seller.

Pierce also filed fraudulent 2004 through 2013 individual income tax returns. Those returns failed to report more than $9 million in gross business receipts that several of his real estate businesses earned, including Phoenix Real Estate Company, Phoenix Preferred Properties LLC, Detroit Matrix, First Metro Properties LLC, First Metro Real Estate Services LLC, Phoenix Office Plaza-II LLC, Rosedale/Grandmont Properties LLC, and RFP Ventures LLC. As a result of those fraudulent filings, Pierce caused a tax loss of more than $400,000.

In addition to the term of prison imposed, Pierce was ordered to serve two years of supervised release and to pay restitution to the Internal Revenue Service (IRS), the amount of which will be determined at a later date. Pierce pleaded guilty in February 2015.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark McDonald and Christopher O’Donnell of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for their substantial assistance.

Steven Barry Ruza, 52, Orchard Lake, Michigan and his company, Home Legal Group, Inc., pled guilty to one count of Conducting a Criminal Enterprise.  Ruza and his company were accused of stealing hundreds of thousands of dollars from Michigan residents that were facing mortgage foreclosures. As part of the plea, restitution will be paid to the victims, with the possibility of additional restitution at the judge’s determination.

Ruza and his company promised victims that they could obtain mortgage modifications and save their homes from foreclosure but then did nothing, or very little, to obtain mortgage modifications for the victims.  In many cases, Ruza even filed false documents with the bank.  The victims never received a modification through Ruza and Home Legal Group and most lost their homes to foreclosure. Continue Reading…

Authorities in Lansing, Michigan recently advised home buyers to beware of a Craig’s List home selling scam where scam artists meet potential home buyers at a home they do not actually own and take payments from the buyer.  This scam is operating across the country and is not limited to properties in Lansing Michigan.  (It is also being perpetrated against potential renters who are “rented” homes that are not owned by the scammers.)

In the Craig’s List scams, a home buyer can generally protect themselves by depositing the earnest money with their own real estate agent or with an escrow company rather than handing money over to the scammers.  The fact that the scammers don’t actually own the property will be discovered during the title search that is conducted while the sales transaction is pending.

This is not the only scam that involves fake sales.  In another common scam, fake sellers actually forge quit claim deeds and ‘transfer’ the property to themselves.  Sometimes these scammers also rent the property from the real owners so that they can ‘show’ the property to potential buyers.

Looking at current ownership in these fake sales transactions may not be enough.  Home buyers and real estate professionals also need to look at the last transactions recorded against title to the property.  If the property has recently transferred by way of quit clam deed, a little more due diligence may be in order before handing over the earnest money deposit or purchasing the property. It is as easy as contacting the “prior” record title holder – who may not even be aware that their property has been transferred.  Quit claim transfers are not always fraudulent.  And fake transfer can be done by way of regular grant deeds.  We just see more fake transfers by quit claim.

In the Craig’s List scam, the fake sellers walk away with the earnest money deposit or down payment.  In a fake sales transaction, if it is not detected by the title company, the scammers walk away with the entire purchase price.

If a homeowner falls for one of these fake sales transactions and purchases a property that doesn’t actually belong to the seller and was transferred by way of a forged deed, the new homeowner’s only real recourse will be their title insurance policy.

Steven Barry Ruza, 52, Orchard Lake, Michigan, and his company, Home Legal Group, Inc., have been charged with 30 felony counts for allegedly stealing hundreds of thousands of dollars from Michigan victims that were facing mortgage foreclosures.

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Anthony Carta, 53, Detroit, Michigan, was sentenced to 30 to 99 years in prison for taking hundreds of thousands of dollars from more than 100 victims who believed he was going to help them with mortgage loans through his Southfield, Michigan, entity Freedom By Faith Ministries.

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Anthony Carta, 53, Detroit, Michigan, has pleaded guilty to seven felonies associated with his formation of a faith-based mortgage assistance scam.

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Joel Wilson, 32, Saginaw, Michigan, was convicted by a jury on nine felony charges for his role in an extensive Michigan Ponzi scheme wherein he defrauded hundreds of Michigan victims out of millions of dollars. In January 2014, extradition efforts were initiated to retrieve Wilson from Germany after he was on the lam in Europe for more than a year.

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GTL Investments, Inc., doing business as John Adams Mortgage Company, Southfield, Michigan, a mortgage lender, has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act in its origination of loans backed by the federal government.

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