Archives For New York

Aderibigbe Ogundiran, 36,  Crown Heights, Brooklyn, New York has been sentenced today to two to six years in prison for stealing a 19th century mansion in Fort Greene, New York as well as stealing or attempting to steal five other properties in a brazen scheme in which he transferred title of other people’s properties to himself.

According to the investigation, between February 2015 and December 2016, the defendant engaged in a scheme to steal title to or the economic benefit from six residential properties in Brooklyn, New York, targeting properties whose title holders were deceased or properties that no one seemed to be taking care of.

The defendant took advantage of the apparent inattention to the properties by filing fraudulent deeds or other instruments against the properties in an effort to gain control of them. In fact, he gained control or attempted to gain control of them in a variety of ways that included using aliases, corporate alter-egos, impostors, forged driver’s licenses, misuse of personal identifying information, and forged notarizations.

The defendant targeted the following properties:

  • 176 Washington Park, Fort Greene, New York: This property is a landmarked 19th century five-story, 10-bedroom mansion located on a double-lot directly across from Fort Greene Park and is part of the Fort Greene Historic District. On March 8, 2015, Ogundiran used a Notary Public to notarize and file a deed transferring ownership from the actual owner of the property, a deceased man whose elderly sister lived in the house, to GCU Group, Inc., a corporation controlled by Ogundiran, using an impostor to pose as the deceased owner. The deed was filed with the New York City Department of Finance, Office of the City Register, which recorded the deed on June 26, 2015, transferring ownership to the corporation controlled by Ogundiran.
  • 123 Albany Avenue, Crown Heights, New York: This property is a three-story brownstone. On March 13, 2015, the defendant once again hired a Notary Public to notarize signatures and file with the City Register, a deed purporting to transfer title of 123 Albany Avenue from the rightful owner to himself, once again using an impostor to pose as the rightful owner. The identity assumed by the impostor was that of a person who in fact had died in 2011. The fraudulent deed was recorded by the City Register on March 30, 2015.
  • 42 Albany Avenue, Bedford-Stuyvesant, New York: This property was purchased in 2004 by an individual who died in 2010. On November 19, 2015, the City Register recorded a Power of Attorney against this property granting the defendant the right to engage in real estate transactions and other powers on behalf of the property. The deceased owner purportedly signed the Power of Attorney on June 15, 2015. On November 18, 2016, the defendant filed a deed purportedly signed by the deceased owner on July 30, 2015 conveying title to the property to Ogundiran for $500.
  • 1024 Hendrix Street, East New York: This property was purchased in 1997 by an individual who died in 2007. On October 6, 2015, the deceased owner purportedly executed a power of attorney benefitting 1024 Hendrix LLC, a corporation controlled by the defendant. On October 9, 2015, the City Register recorded a Power of Attorney against the property.
  • 1424 Fulton Street, Bedford-Stuyvesant, New York: This property, a three-story residential building with commercial space on the ground floor, was purchased by three individuals in 2013. On November 9, 2016, Ogundiran filed a Power of Attorney with the City Register which was purportedly from one of the actual owners to a corporation incorporated and controlled by the defendant. The Power of Attorney contained the forged signatures of another of the owners and a Notary Public.
  • 49 Albany Avenue, Bedford-Stuyvesant, New York: This property, a two-story house, was owned by an individual who died in 2007, leaving an only child who resided outside of the United States. On November 9, 2016, the defendant filed a forged Power of Attorney against 49 Albany Avenue. The Power of Attorney granted rights to a corporation controlled by the defendant and was purportedly signed by the deceased owner and a Notary Public.

The investigation began after the resident of 176 Washington Park, Fort Greene, New York received notice that she would have to vacate the premises. She notified her attorney, who then filed a complaint with the New York City Department of Finance.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said that in at least one instance, involving 42 Albany Avenue, Bedford-Stuyvesant, New York the defendant collected rent from a tenant after leasing out an apartment. In another instance, involving 1424 Fulton Street, Bedford-Stuyvesant, New York he was captured on videotape filing a Power of Attorney at the City Register’s office, after the actual owner of the property received an email alert of a document filed against the property.

District Attorney Gonzalez said, “All too often we are seeing thieves targeting seemingly abandoned properties to try to cash in on Brooklyn’s soaring real estate prices. With today’s sentence, the defendant has been held accountable. Homeowners can protect themselves by registering with the Automated City Register Information System (ACRIS) so that they are automatically informed of changes made to documents associated with their property – as happened with one of the victims in this case – to alert them to potential theft and fraud related to their property.”

Ogundiran was sentenced by Brooklyn Supreme Court Justice Danny Chun to an indeterminate term of two to six years in prison. The defendant pleaded guilty to first-degree grand larceny and first-degree scheme to defraud on March 7, 2018.

The case was prosecuted by Assistant District Attorney Gavin Miles, Counsel to the District Attorney’s Frauds Bureau, under the supervision of Assistant District Attorney Richard Farrell, Chief of the Real Estate Frauds Unit, and the overall supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the Investigations Division.

Lyndon Chin, 54, Northport, New York was indicted today for using a 91-year-old man’s real estate properties to fraudulently obtain $8.5 million in unauthorized mortgage loans.

According to the indictment, documents filed in court, and statements made on the record, Chin had acted as a real estate broker for the 91-year-old victim in prior real estate transactions. In that capacity, the defendant helped the victim with the purchase and sale of residential and commercial real estate and had knowledge of the victim’s properties and the corporation through which he owned them.

In October 2015, Chin used his knowledge of the victim’s real estate holdings to falsify documents in the name of the victim’s company and obtain $5 million in mortgage loans on four of the victim’s Lower Manhattan, New York properties without his knowledge. Chin then opened a bank account in the name of the victim’s corporation and deposited approximately $4.4 million of the fraudulently obtained funds into that account. A large portion of the funds was paid to at least 20 personal and corporate bank accounts, including accounts belonging to members of the defendant’s family, and the remainder was used to cover personal expenses such as car payments, insurance payments, and jewelry.

From March through May 2016, Chin secured another $3.5 million in mortgage loans using similar means and deposited approximately $1.9 million into a bank account that he had opened specifically to receive the funds, before transferring the funds into a different account that he controlled.

The defendant is charged in a New York State Supreme Court indictment with two counts of Grand Larceny in the First Degree. [1]

The conduct was uncovered and the matter was referred to the Manhattan District Attorney’s Office after the victim was rejected for a mortgage loan on an unrelated business opportunity due to the existing mortgages that the defendant had fraudulently obtained on his properties. This indictment is the result of a 16-month-long, ongoing investigation by the Office’s Financial Frauds Bureau.

Manhattan District Attorney Cyrus R. Vance, Jr. made the announcement.

Frauds against seniors and other vulnerable residents of Manhattan will be met with the full force of our laws,” said District Attorney Vance. “As alleged in the indictment, the defendant is charged with exploiting his access to a 91-year-old victim’s business in order to falsify corporate documents and secure more than $8 million in fraudulent mortgage loans in just two years. I encourage all victims of financial crime to call our Financial Frauds Bureau at (212) 335-8900.”

Assistant D.A. Caitlin Naun is handling the prosecution of the case under the supervision of Assistant D.A.s Gloria Garcia, Deputy Chief of the Financial Frauds Bureau, and Archana Rao, Chief of the Financial Frauds Bureau, as well as Executive Assistant D.A. Michael Sachs, Chief of the Investigation Division. Trial Preparation Assistant Kelly Lai, Investigator Michael O’Brien, Financial Investigator Elaine Li, and Chief of the Forensic Accounting and Financial Investigations Bureau Robert Demarest also provided valuable assistance on the case.

[1] The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.

Frank Giacobbe, 43, East Amherst, New York; Patrick Ogiony, 34, Buffalo, New York; Kevin Morgan, 42, Pittsford, New York; and Todd Morgan, 29, Rochester, New York, have been charged in a  62-count indictment with conspiracy to commit wire fraud and bank fraud, and substantive wire fraud and bank fraud charges. The charges carry a maximum penalty of 30 years in prison and a $1,000,000 fine.

According to the indictment, between March 2011 and June 2017, the defendants conspired to defraud financial institutions, such as Arbor Commercial Mortgage, LLC and Berkadia Commericial Mortgage, LLC, and government sponsored enterprises, including Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal National Mortgage Association (Fannie Mae). The indictment alleges that the defendants conspired to engage in a variety of conduct to induce mortgage lenders to issue loans for residential apartment complexes (1) for greater amounts than they would have issued had they known the truth; and (2) that the lenders would not have issued at the time of issuance had they known the truth.

The defendants are accused of:

  • Conspiring to provide lending institutions with false rent rolls suggesting that properties had more occupied units, at higher rental rates, and generated more income than they, in fact, did;
  •  Conspiring to provide false information about other income received at the complexes. On one occasion, when one defendant asked another where storage space income figures came from, another defendant replied, “Magic;”
  • Conspiring to provide lenders with fraudulently altered leases; and
  • Conspiring to prevent inspectors touring the properties from discovering vacant units by, among other things, turning on radios inside vacant units, placing mats and shoes outside apartment doors, and, on at least one occasion, hiring someone to stage an apartment as lived in and pretend to be a tenant of an inspected unit.

The indictment alleges fraud at seven different properties, not all of which involved all charged defendants, but which resulted in total loans issued of $167,591,000. The properties are Morgan Ellicott Apartments and Amherst Garden, both in Buffalo, New York; Rugby Square in Syracuse, New York; Avon Commons, in Avon, New York; Rochester Village, Southpointe, and Eden Square, all in the Pittsburgh, Pennsylvania area.

U.S. Attorney James P. Kennedy, Jr. made the announcement today.

The defendants are charged with fraudulently obtaining over $167.5 million worth of loans relating to seven residential apartment complexes located here in New York and in Pennsylvania,” noted U.S. Attorney Kennedy. “Most of those loans were in turn sold to Fannie Mae or Freddie Mac, entities which were created by Congress to perform and an important role in our country’s housing finance system. As a result of the fraudulent conduct alleged in this indictment, defendants’ conduct not only unjustly enriched them but threatened to undercut the very foundations upon which our mortgage banking and investment systems are based.”

We must protect the tens of thousands of investors who own mortgage backed securities,” said Gary Loeffert, Special Agent-in-Charge of the Buffalo Division. “This investigation is focused on stopping people from undermining the residential and commercial financing industry. Fraud for profit aims to misuse the mortgage lending process to steal cash.”

Some of the defendants are scheduled to be arraigned on May 23, 2018, at 2:00 p.m. before U.S Magistrate Judge H. Kenneth Schroeder.

The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent-in-Charge Mark P. Higgins.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Lurlyn A. Winchester, 59, New City, New York, a former Justice for the Town Court of Monroe, pled guilty, in federal court, on charges that she made false statements in connection with an application for a loan she obtained to purchase a residence in Monroe, New York in order to satisfy a residency requirement attached to her position as Town Justice, and obstruction of justice for providing Federal Bureau of Investigation (“FBI”)  task force members, who were questioning her about her mortgage loan, with false documents, including fabricated rent payment receipts.

According to the allegations contained in the Indictment http://www.mortgagefraudblog.com/?s=Lurlyn+A.+Winchester as well as statements made in public court proceedings:

On or about November 5, 2013, Winchester, the defendant, was elected Town of Monroe Justice.  Under New York law, she was required to reside in Monroe in order to be eligible to hold that Town of Monroe Justice position.  At the time, she and her husband lived in a home in New City, New York (“the New City Home”), that they purchased in 1997.  In or about November 2013, Winchester attempted to purchase a condominium in Monroe, New York (“Monroe Condominium-1”).  On or about December 17, 2013, Winchester entered into a lease agreement with a tenant (“Tenant-1”) to rent the New City Home to Tenant-1.  At around that time, Tenant-1 provided Winchester with a $7,500 check.  On a later date, Tenant-1 also provided Winchester with a $1,500 check.

In or about March 2014, the deal to purchase Monroe Condominium-1 fell through and Winchester returned $7,500 to Tenant-1.  In the same month, Winchester entered into a contract to purchase a second condominium (“Monroe Condominium-2”), which was in the process of being built.

In or about June 2014, Winchester began submitting applications for a residential loan and supporting documents to representatives of Hudson United, who, in turn, submitted these items to several lenders.  Winchester represented, in the applications, that the New City Home was the couple’s “present address.”  She further represented in the applications that the loan was to be used to purchase Monroe Condominium-2.  On the loan applications and an Affidavit of Occupancy signed by Winchester, she asserted that Monroe Condominium-2 would be their primary residence.

In or about late 2014, two lenders that had received Winchester’s loan application for Monroe Condominium-2 declined to approve the loan.  The first did so because Winchester had too much debt compared with her income.  The second did so after it reviewed documents the defendant submitted, upon the lender’s request, that were supposed to show that she intended to rent out her New City Home.  The documents she submitted included a phony lease agreement and copies of the $7,500 check and $1,500 check Tenant-1 had provided to her at the end of 2013 and in early 2014, at the time Winchester was planning to purchase Monroe Condominium-1.  The lender rejected these, noting that the dates of the checks and the lease did not make sense.

Thereafter, Hudson United submitted Winchester’s loan materials to a third lender, Plaza Home Mortgage (“Plaza”).  Plaza also requested information about Winchester’s representation that she and her husband intended to move to Monroe Condominium-2 and rent out the New City Home.  In response, on or about February 6, 2015, Winchester sent Hudson United a letter in which she stated that “in regard to our intent with the current primary residence, [New City Home], please be advised that we intend on renting the premises.”  She further represented that they “already have a prospective tenant who is anxiously awaiting to take occupancy of the residence.”

On or about February 27, 2015, Plaza informed Hudson United that it placed the loan in “suspend for decline status” because of insufficient income.  On or about March 20, 2015, based on Winchester’s representation, Hudson United informed Plaza that there would be rental income from the New City Home.  As a condition for closing on the loan, Plaza requested, among other things, a copy of a fully executed 12-month lease and a canceled check for a security deposit.

In response, on or about March 27, 2015, Winchester submitted to Hudson United, which then submitted to Plaza, the following items containing false statements: (1) a phony lease agreement providing that Tenant-1 was to going to pay $4,500 a month to lease the New City Home; and (2) a copy of two checks, made out to Winchester, each in the amount of $4,500, dated March 23, 2015, signed by Tenant-1, and drawn on Tenant-1’s bank account.  The checks each contained a false notation indicating it was for the security deposit or first month’s rent for the New City Home.  Unbeknownst to Hudson United and Plaza, Tenant-1 did not intend to rent the New City Home and Tenant-1 did not provide the money to pay for a security deposit or first month’s rent.  In fact, Winchester provided Tenant-1 with $9,000 to cover the two $4,500 checks Tenant-1 issued to Winchester.

On or about April 2, 2015, Winchester and Plaza closed on the loan and Plaza funded the purchase of Monroe Condominium-2.  Tenant-1 never moved to the New City Home and Winchester did not move to Monroe Condominium-2.

On or about July 28, 2016, members of an FBI task force conducting an investigation interviewed Winchester, at her office in New City, about the statements she made in connection with the loan she received from Plaza Home Mortgage.

Thereafter, the defendant met with Tenant-1, enlisted Tenant-1’s support in providing a false story to investigators, and had Tenant-1 initial fabricated “rent receipts” that indicated that Tenant-1 made a total of $9,000 in incremental cash payments to Winchester, between May 15, 2014, and January 16, 2015, as advance rent payments for the New City Home.

On or about August 1, 2016, task force members returned to Winchester’s New City office and interviewed her again.  During the interview, she gave them a number of documents designed to support her false account that Tenant-1 intended to rent the New City Home but decided, after the closing on Monroe Condominium-2 on April 2, 2015, not to move in.  The documents she provided to the task force members included, among other things, copies of the false and fabricated “rent receipts.”

Winchester pled guilty to both counts of an indictment before U.S. Magistrate Judge Judith C. McCarthy.  The first charged her with making false statements to a mortgage lending business, 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.  The second charged her with falsifying records in a federal investigation, with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of a federal department or agency, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, made the announcement.

U.S. Attorney Geoffrey S. Berman said:  “As she admitted in court today, Lurlyn Winchester, in an attempt to fraudulently satisfy a residency requirement for a judgeship, lied and provided fake documents to secure a mortgage.  She then lied to FBI task force officers and provided them with fake documents in an attempt to cover up that crime.  Winchester’s lack of integrity and honesty did not merit a term on the bench.  Her crimes will likely earn her a term in prison.”

Winchester’s sentencing is scheduled for August 28, 2018, at 2:00 p.m.

Mr. Berman praised the outstanding investigative work of the FBI.  He also thanked the Orange County Sheriff’s Office and the Orange County District Attorney’s Office for their assistance.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorney Margery B. Feinzig is in charge of the prosecution.

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.

Joseph Atias, 54, Great Neck, New York was sentenced to 40 months’ imprisonment and his wife Sofia Atias, 48, Great Neck, New York was sentenced to 8 months’ imprisonment, following their March 30, 2017 trial convictions for bank fraud and conspiracy to commit bank fraud in connection with the sale of their real property to Sacred Heart Academy, Hempstead, New York for athletic fields. They were also convicted of Medicaid fraud.

The Bank Fraud Scheme

At trial, the government’s evidence established that shortly before the sale of their property adjacent to Sacred Heart Academy for $925,000, the defendants sold the property in a short sale to Bank of America for $480,000 to discharge their mortgage debt.  In negotiating the short sale with the bank, the defendants and their co-conspirator attorney concealed Sacred Heart Academy’s pending offer and submitted a fraudulent contract of sale and other false documents representing that they did not have funds to pay off the mortgages in full.  As part of the fraudulent short sale, the defendants used a relative as a “straw buyer” of the property to create the appearance of an arms-length sale.  Shortly after that sale, the defendant’s straw buyer sold the property to Sacred Heart Academy for approximately half a million dollars in profit.

The Medicaid Fraud Scheme

The government’s evidence at trial established that between 2009 and 2015 the defendants fraudulently obtained Medicaid funds, by concealing their self-employment income and available cash resources, including trust fund monies and the $465,000 in proceeds from the bank fraud scheme.

As part of their sentences, United States District Judge Denis R. Hurley ordered the defendants to pay $465,965 in forfeiture and $49,956 in restitution.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

Joseph and Sofia Atias committed fraud schemes to try to get out from under mortgage debt and to fraudulently obtain Medicaid funds, essentially flaunting the laws to which we all must adhere,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners will make every effort to ensure that those who would manipulate the system are called to account.

In a clear case of double dipping, the defendants convinced the lending institution of their eligibility to qualify for a short sale on their property, recruited a relative to serve as a straw buyer for the property, and profited from the funds of a subsequent sale of the property,” stated FBI Assistant Director-in-Charge Sweeney.  “At the same time they were running this scheme, they were also found to have engaged in significant fraud against the government. May today’s sentencing remind those who exploit government programs and manipulate gaps in the mortgage and banking sectors that they will face the error of their ways.”

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Charles P. Kelly and Burton T. Ryan, Jr., are in charge of the prosecution.  Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division is handling matters related to forfeiture.

Edward J. Sypher, Jr., 41, Scarsdale, New York and Matthew T. Voss, 42, Northport, New York, senior executives at Long Island, New York mortgage lender Vanguard Funding, LLC (Vanguard), pleaded guilty today to conspiring to commit wire and bank fraud in connection with their diversion of more than $8.9 million of warehouse loans that Vanguard had obtained to fund mortgages.

According to court filings and the facts presented at the plea proceedings, between August 2016 and March 2017, Voss, Vanguard’s Chief Operating Officer, and Sypher, the Chief Financial Officer, engaged in a scheme in which they obtained warehouse loans, or short-term loans, for Vanguard by falsely representing that Vanguard would use the proceeds of those loans to fund mortgages or mortgage refinancing for Vanguard’s clients.  Once Vanguard received the loans, however, the defendants diverted the monies to pay personal expenses and compensation, and to pay off loans they had previously obtained with fraudulent loan submissions for improper purposes.

The guilty pleas were entered before United States District Judge Sandra J. Feuerstein.  When sentenced, each defendant faces up to 20 years in prison, as well as restitution, criminal forfeiture and a fine.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Maria T. Vullo, Superintendent, New York State Department of Financial Services, announced the guilty pleas.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Whitman G.S. Knapp and Elizabeth Losey Macchiaverna are in charge of the prosecution.

Saoud “Sam” Rihan, 57, Bronx, New York was charged today with carrying out a scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning”.

According to the complaint:

Rihan was a business partner of Simon Curanaj, 63, Yonkers, New York. From 2012 through January 2014, Rihan, Curanaj, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOC) from banks on residential properties in New Jersey and New York.

For example, Rihan and Curanaj executed a deed to transfer ownership of a Bronx, New York property to people identified in the complaint as “Individual 1” and “Individual 2,” neither of whom lived at the property. Rihan and Curanaj then applied for three HELOCs from multiple banks in the name of Individual 2.

Rihan and Curanaj hid the fact that the same Bronx, New York property was pledged as collateral in all three applications. The applications also fraudulently inflated Individual 2’s income. In addition, at the time the applications were made, the value of the Bronx, New York property, which was encumbered by a mortgage, was far less than the amount of the HELOC loans that Rihan and the real estate broker applied for.

The victim banks eventually issued loans to Individual 2 in excess of $370,000. After the victim banks funded the HELOCs and deposited money into Individual 2’s bank accounts, Individual 2 disbursed almost all of the funds to Rihan, Curanaj, and others. In 2014, Individual 2 defaulted on all the HELOC loans.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

Rihan was arrested January 28, 2018 and charged by complaint with one count of conspiracy to commit bank fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

The charge and allegations against Rihan are merely accusations, and he is presumed innocent unless and until proven guilty.

Curanaj previously pleaded guilty to his role in the scheme and awaits sentencing.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), under the direction of Special Agent in Charge Steven Perez in Newark; and special agents of the FBI, under the direction Special Agent in Charge Timothy Gallagher in Newark, with the investigation.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA-OIG.

Dirk Hall, 42, Queens, New York was sentenced today to 41 months’ imprisonment, to be followed by five years of supervised release, after having pleaded guilty to conspiracy to commit bank fraud and wire fraud in connection with a multi-million dollar mortgage fraud scheme.

According to court filings and facts presented at the sentencing hearing, between September 2008 and May 2011, Hall, together with others, caused mortgage loan applications with false information to be submitted to lending institutions in connection with the purchase of residential properties located within the Eastern District of New York. http://www.mortgagefraudblog.com/5-charged-with-defrauding-mortgage-lending-institutions/#more-20083  These applications contained fraudulently inflated purchase prices, as well as false information about the assets and income of the purchasers of the properties, many of whom were being compensated as part of the scheme to act as straw purchasers.  The defendant and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and the other borrowers had made down payments in connection with the purchase of the properties, which was a condition of the lending institutions for issuing the mortgage loans.

To carry out their scheme, the defendant and his co-conspirators conducted simultaneous purchases and sales of the properties, sometimes called “flips,” in an effort to conceal their criminal involvement and to inflate the value of the properties.  To that end, the defendant and his co-conspirators, through the use of backdated and falsified documents, concealed from the lending institutions the fact that the purchase and sale had occurred on the same day and made it appear as if the transaction between the homeowner and the co-conspirator had occurred over 60 days prior to the sale from the co-conspirator to the straw purchaser.

As a result of the false applications and appraisals, the lending institutions were fraudulently induced to issue millions of dollars of mortgage loans secured by properties that had inflated appraisal values to individuals who had insufficient income and assets to qualify for the mortgage loans.  In many instances, the straw purchasers and the other borrowers failed to make required mortgage payments to the lending institutions, which caused the mortgage loans to be placed into default status.

The announcement was made by United States District Judge Eric N. Vitaliano.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentencing.  Mr. Donoghue thanked the Federal Bureau of Investigation (FBI); the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG); the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); and the New York State Department of Financial Services (DFS) for their hard work and dedication over the course of this multi-year investigation and prosecution.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David C. Pitluck, Mark E. Bini and Michael T. Keilty are in charge of the prosecution.

Bobbi A. Constantine, formerly known as Robert Bove, 48, Albany, New York, was sentenced  to 37 months in prison, and 3 years of supervised release, following her November 2017 guilty plea to wire fraud. United States District Judge Mae A. D’Agostino also ordered Constantine to pay restitution of $72,589.96 and forfeit $43,640.72.

From October 2014 through July 2016, Constantine, then known as Robert Bove, obtained mortgages and automobile lease financing from lenders under the false pretense that she was the beneficiary of a trust containing more than $12 million of the assets of a fictitious, deceased aunt.

Constantine used fictitious trust documents, which bore a forged notary seal, to dupe an attorney into generating a letter stating that that she was the beneficiary of a trust generating annual income of more than $50,000.  Constantine also impersonated a fictitious administrative trustee for the trust.  On the basis of the fraudulent trust documents and the attorney’s letter, Constantine obtained lease financing for a new Toyota RAV4 and a new Jeep Renegade, and obtained mortgages for her purchase of a $200,000 home in Albany, New York and a $131,000 condominium in Myrtle Beach, South Carolina.

In August 2017, Constantine was sentenced in another federal criminal case, for making false statements in connection with her May 2016 application for employment with the United States Postal Service in Troy, New York.  Constantine, who has more than 20 prior convictions including convictions for fraud, falsely stated in her employment application that she had never been convicted of a crime.

Constantine has been in federal custody since September 13, 2016.  She received a sentence of time served on the false statements conviction.

The announcement was made by Acting United States Attorney Grant C. Jaquith and Acting Inspector in Charge Raymond Moss, U.S. Postal Inspection Service (USPIS), Boston Division.

This case was investigated by the USPIS, the New York State Police, the Social Security Administration Office of the Inspector General, and the Bethlehem Police Department, and was prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman.