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Marat Lerner, 40, Brooklyn, New York , president of the Lerner Group, has been indicted for conspiracy to commit wire fraud, wire fraud, and money laundering in connection with a scheme to steal from clients of his mortgage loan modification business.

The indictment alleges that, in or about and between August 2016 and January 2021, Lerner, together with others, operated the Lerner Group.  The Lerner Group promised clients it could help them modify their mortgages by reducing their monthly mortgage payments and their outstanding mortgage balances.  Lerner used his access to his clients’ banking information to create checks that appeared to be monthly mortgage payments to a purported escrow agent called Testoni & Villa and to his clients’ mortgage banks.  But in truth, Lerner secretly controlled Testoni & Villa, and instead of holding the money in escrow, or transferring it to the mortgage banks, Lerner deposited the checks in an account that he controlled, and which he used for a variety of personal expenses, including luxury goods and expensive meals and a BMW automobile.  In total, Lerner misappropriated at least $550,000 from his clients.

Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charges.

The defendant preyed on immigrants burdened by mortgage debt in the Russian community in Brooklyn, stealing their American dream through a scheme built on false promises to help them keep their homes, but in truth, he took advantage of their trust to enrich himself,” stated United States Attorney Peace.  “This Office has prioritized protecting vulnerable members of our district and we encourage them to come forward and put their trust in us to seek justice for them.

Mr. Peace expressed his appreciation to the U.S. Customs and Border Protection and the New York City Police Department for their assistance in this matter.

The defendant, as we allege today, funded his own lavish lifestyle by operating a lengthy scam exploiting his victims’ trust and fears in order to steal their money rather than fulfill his promise to modify their mortgages,” stated FBI Assistant Director-in-Charge Driscoll.  “The FBI will continue to make sure any individual willing to cheat and deceive clients out of their hard-earned money will face the consequences in the criminal justice system.  We urge any additional victims of Mr. Lerner’s scheme to contact us at 1-800-CALL-FBI or online at www.iC3.gov.

If you were a Lerner Group client and would like to file a complaint, please visit www.iC3.gov.  Please reference “Lerner Group” or “Marat Lerner” in your complaint.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Lerner faces up to 20 years in prison.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Nick M. Axelrod is in charge of the prosecution.

 

Edward E. Bohm, 44, Smithtown, New York, formerly the President of Sales and part-owner of mortgage lender Vanguard Funding, LLC (Vanguard), based in Garden City, New York was sentenced today to 24 months’ imprisonment in connection with the diversion of more than $8.9 million of warehouse loans that Vanguard had fraudulently obtained purportedly to fund home mortgages and mortgage refinancing.

Between August 2015 and March 2017, Bohm and his co-conspirators at Vanguard engaged in a scheme in which they obtained more than $8.9 million in short-term loans, referred to as warehouse loans, by falsely representing that the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients.  Instead, Bohm and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through false loan applications.

Bohm is the third defendant to be sentenced in connection with this scheme.  On February 6, 2019, Vanguard Senior Vice President and Chief Financial Officer Edward J. Sypher, Jr., was sentenced to 18 months’ imprisonment and restitution in the amount of $3,488,615.42 following his conviction on conspiracy to commit wire and bank fraud charges.  On February 26, 2019, Vanguard Chief Operating Officer Matthew T. Voss was sentenced to 24 months’ imprisonment and $3,488,615.42 restitution following his conviction on conspiracy to commit wire and bank fraud charges.

Bohm was also ordered to pay $3,488,615.42 in restitution and $1,500,000 in criminal forfeiture.  In February 2019, Bohm pleaded guilty to conspiring to commit wire and bank fraud.

Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Adrienne A. Harris, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.

With today’s sentence, Edward Bohm has been deservedly punished for his role in a fraudulent scheme that deceived banks that trusted and relied upon him as a business partner.  Bohm diverted the loan proceeds to, among other things, pay tens of thousands of dollars in monthly personal credit card expenses and finance the luxury house in which he lived,” stated United States Attorney Peace.  “This Office, together with our law enforcement partners, will vigorously investigate and prosecute those who commit fraud to advance their own financial interests at the expense of businesses and residents of our district.

Edward Bohm and his associates at Vanguard Funding defrauded the financial institutions that provide critical residential mortgage funding, helping themselves to the short-term loans they falsely claimed were on behalf of consumers,” stated DFS Superintendent Harris.  “As New York’s financial services regulator, I am proud of DFS’s mortgage banking examiners and criminal investigators who assisted in the investigation that brought Bohm to justice, and who will continue to root out fraud on behalf of all New Yorkers.

The government’s case is being prosecuted by Assistant United States Attorney Whitman G.S. Knapp, with assistance from Special Agent Martin Sullivan of the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Madeline O’Connor of the Office’s Asset Recovery Section is handling forfeiture matters.

James Effiwatt, 64, Brooklyn, New York has been arraigned on an indictment in which he is charged with grand larceny and burglary for allegedly filing a fake deed to transfer ownership of his landlord’s $759,000 rental property to a trust in the defendant’s name.

According to the investigation, on January 15, 2021, Effiwatt allegedly recorded a deed to a three-story house at 36 Hubbard Place, Brooklyn, New York that transferred the title of the property from the owner, Hubbard Estates LLC, to an entity called the “Ayonkladd Trust,” of which the defendant was the trustee. The deed was allegedly signed by Effiwatt as a grantor despite the fact that the defendant is not a member or trustee of Hubbard Estates LLC. The building has an assessed value of $759,000. The property has been owned by the legitimate owner, a 49-year-old woman, since 2015.

The investigation revealed that Effiwatt is a former tenant of 36 Hubbard Place who lived in the third-floor attic apartment for several years beginning in August 2015. Effiwatt allegedly stopped paying rent in the summer of 2017 and was eventually ordered to vacate the property in October 2019 by city housing officials over housing code violations. However, it is alleged that Effiwatt subsequently moved back into the attic apartment where he has remained since. Additionally, beginning in March 2021, Effiwatt allegedly approached several other tenants of the property and demanded they pay him rent. Effiwatt also allegedly approached a real estate broker and discussed selling the property for six or seven hundred thousand dollars.

Brooklyn District Attorney Eric Gonzalez today made the announcement.

District Attorney Gonzalez said, “This defendant allegedly filed a fake deed in an unlawful attempt to take ownership of his landlord’s property. Title theft is a serious crime that deprives hard-working people of the single most important asset any American can hope to own. As real estate values continue to rise dramatically in Brooklyn, I remain committed to protecting homeowners across the borough from fraudsters who would steal their security and investment in the future.”

The defendant was arraigned today before Brooklyn Supreme Court Justice Danny Chun on an indictment in which he is charged with one count of second-degree burglary, one count of second-degree grand larceny and two counts of fourth-degree attempted grand larceny. The defendant was ordered held on bail of $25,000 bond or $10,000 cash and to return to court on February 15, 2022.

The case is being prosecuted by Assistant District Attorney Francis Longobardi, Special Counsel to the District Attorney’s Real Estate Frauds Unit, under the supervision of Assistant District Attorney Richard Farrell, Unit Chief, Assistant District Attorney Gregory Pavlides, Chief of the Frauds Bureau, Assistant District Attorney Michel Spanakos, Deputy Chief of the Investigations Division and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.

 

Jasmine Morgan, 32, Queens, New York has been charged today with grand larceny, identity theft and other crimes. The defendant allegedly posed as the granddaughter of an elderly veteran to fraudulently transfer a property deed into her name and then collected more than $134,000 when she sold the home in March 2020.

According to the charges, around February 6, 2020, the defendant claimed to be the granddaughter of a deceased Queens, New York homeowner and offered to facilitate the sale of his home on 198th Street in St. Albans, Queens, New York. Morgan and an unapprehended other – who posed as the homeowner – agreed to a sale price of $300,000 with a buyer and subsequently entered into a contract. Morgan allegedly accepted a $5,000 down payment and provided identification and a death certificate for the dead grandfather and an uncle.

On March 6, 2020, the defendant again purported herself to be the heir to the deceased homeowner’s estate when she appeared at a law firm in Queens for the closing with an unapprehended other, who again posed as the homeowner. The deed transfer for the property was confirmed by the lawyer, who gave the defendant a check for just over $134,000.

According to the complaint, the true owner of the home is a 74-year-old veteran who discovered the ruse when he was sued by the person who “bought” the home from Morgan. The victim did not transfer his deed and does not have a granddaughter.

The defendant allegedly cashed the check she received from the lawyer at a Brooklyn check cashing establishment and received cash.

Queens District Attorney Melinda Katz made the announcement.

District Attorney Katz said, “This defendant was ultimately caught in a tangled web of her own making – a paper trail of bogus transactions that revealed a complicated con to steal a man’s home. By posing as a grieving granddaughter, the defendant allegedly duped multiple people into believing she was entitled to a $134,000 payday from the sale of a house to which she had no rightful claim. The victim is a 74-year-old veteran who was left with a mess to unravel.

Morgan was arraigned on Tuesday before Queens Criminal Court Judge Karen Gopee on a 15-count criminal complaint. The defendant is charged with grand larceny in the second degree, criminal possession of a forged instrument in the second degree, identity theft in the first degree, falsifying business records in the first degree, scheme to defraud in the first degree and offering a false instrument for filing in the second degree. Judge Gopee ordered the defendant to return to Court on January31, 2022. If convicted, Morgan faces up to 15 years in prison.

The investigation was conducted by Detective Marcelo Razzo of the NYPD Special Frauds Squad and Assistant District Attorney Christina Hanophy, Deputy Bureau Chief of the Housing and Worker Protection Bureau of the Queens District Attorney’s Office who is also prosecuting the case under the supervision of Assistant District Attorney William Jorgenson, Bureau Chief, and under the overall supervision of Executive Assistant District Attorney for Investigations Gerard A. Brave.

Tanya M. Howard, 47, Jersey City, NJ and her son Trevon Howard, 26, Far Rockaway, Queens, New York have been charged with burglary, grand larceny and other crimes for allegedly assuming a prior owner’s identity in order to obtain false title papers and take possession of a home in Far Rockaway, Queens, New York. The pair allegedly occupied the home on several occasions through September 2021, despite the rightful owners’ attempts to get them out.

According to the charges, on several occasions in September 2021, the defendant Tanya M. Howard and her son Trevon allegedly forced their way into a house on Beach 15th Street near New Haven Avenue. The home already had two tenants, who were renting from the legitimate owners. As alleged, the female defendant claimed to own the two-story brick house. The Howards moved in with their belongings and appliances and took control of several rooms on the first floor of the home. The renters – including an elderly, disabled individual – were cut off from using parts of the house, including the kitchen and bathrooms.

On September 2, 2021, defendant Tanya M. Howard exploited the similarity between her name and that of the prior owner – Tanya L. Howard – and allegedly filed for a new title in both her and her son’s names with the Department of Finance Business Center in Queens. The true owners of the property purchased the house from Tanya L. Howard in 2019 for $500,000.

On September 18, 2021, the victims – a man and his mother who are the actual owners of the property – discovered the Howards and a third individual inside the house and contacted the police to remove them. When law enforcement arrived, defendant Tanya M. Howard refused to vacate the premises and continued to insist she was the rightful owner of the house. After being arrested, the defendants allegedly returned to the home and barged inside again refusing to cede occupancy.

Then on September 29, 2021, the male homeowner discovered the defendants Tanya M. Howard, her son Trevon Howard and a teenager inside the house again. He called police and the pair were again arrested.

Queens District Attorney Melinda Katz today made the announcement.

District Attorney Katz said, “As alleged, the defendants in this case became tenacious squatters who repeatedly forced their way into a house they did not own and obtained a false deed to steal the property from the rightful owners.”

The pair were arraigned yesterday before Queens Criminal Court Judge Jeffrey Gershuny on a seven-count complaint charging them with burglary in the second degree, grand larceny in the second degree, offering a false instrument for filing in the first degree, three counts of identity theft in the second degree and criminal trespass in the second degree.  Judge Gershuny ordered the defendants to return to Court on December 16, 2021. If convicted, Tanya and Trevon Howard each face up to 15 years in prison.

The investigation was conducted by Detective Michael Trano of the New York City Sheriff Office.

Assistant District Attorney William Jorgenson, Bureau Chief of the District Attorney’s Housing and Worker Protection Bureau, is prosecuting the case under the overall supervision of Executive Assistant District Attorney for the Investigations Division Gerard Brave.

Brent Kaufman, 50, Commack, New York, a former unlicensed mortgage broker, pleaded guilty today to criminal information charging him with stealing $4.7 million in mortgage refinancing proceeds that were meant to pay off the existing mortgages of his clients.

According to court filings and facts presented during the plea proceeding, Kaufman worked as an unlicensed mortgage broker and often assisted clients in Queens and Long Island with refinancing their mortgages.  At the closing for a mortgage refinancing, the money from the new mortgage is supposed to be wired to the financial institution that holds the existing mortgage so that it can be paid off. Between 2016 and 2019, Kaufman, together with others, engaged in a scheme to defraud Home Point Financial Corporation, LoanDepot.com LLC and United Wholesale Mortgage and other mortgage lenders (the “Lenders”) by obtaining, and attempting to obtain, monies and funds from the Lenders by means of materially false representations.  Specifically, Kaufman provided incorrect wire routing information to the Lenders for the existing mortgages.  Instead of wiring the funds to the correct financial institution, the funds were instead transferred to bank accounts controlled by Kaufman.  As a result, the existing mortgages were not paid off, leaving the clients with two mortgages on their homes, and Kaufman stole the funds for his own personal use.

During the period of the charged conduct, Kaufman stole more than over $4.7 million, some of which he used to make mortgage payments on the existing mortgages or to eventually pay off those mortgages to avoid detection of his scheme.  When Kaufman stopped paying the existing mortgages, several of his clients’ homes were foreclosed on.  Victims of the scheme ultimately suffered a loss of approximately $2.5 million.

When sentenced, Kaufman faces up to 30 years in prison, as well as forfeiture and a fine of up to $1 million.

Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Robert W. Manchak, Special Agent-in-Charge, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), and Darnell D. Edwards, Acting Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.

With today’s guilty plea, Kaufman admits to stealing millions of dollars in a brazen mortgage fraud scheme that defrauded numerous lenders and left his homeowner-clients in danger of losing their homes to foreclosure,” stated Acting U.S. Attorney Kasulis.  “This Office is committed to prosecuting defendants like Kaufman who are driven by greed to abuse the trust of innocent homeowners.” Ms. Kasulis expressed her grateful appreciation to the FBI, FHFA-OIG and the USPIS for their outstanding work and assistance in this investigation and prosecution.

Not only did Kaufman steal his victims’ money, but he also violated their trust, leaving them financially vulnerable and at risk of significant financial complications,” stated FBI Assistant Director-in-Charge Driscoll.  “Collectively, his victims suffered millions of dollars in losses. Today’s guilty plea reminds us of the threat posed by those who prioritize their own financial interests above all else.”

Brent Kaufman betrayed the trust of unsuspecting homeowners by stealing millions of dollars in mortgage payoffs and failing to repay lenders.  As demonstrated by these charges, FHFA-OIG and its law enforcement partners will investigate and hold accountable those who seek to victimize Fannie Mae and Freddie Mac and misuse the lending process to unjustly enrich themselves,” stated FHFA-OIG Special Agent-in-Charge-Manchak.

“This is a classic case of greed overcoming honest business practices, as Mr. Kaufman took advantage of his access to clients funds to enrich his own lifestyle. His actions left many in financial ruin, holding two mortgages and facing the threat of foreclosure. Law enforcement will always work tirelessly to bring individuals to justice for their crimes against the American public,” stated USPIS Acting Inspector-in-Charge Edwards.

The government’s case is being prosecuted by Assistant United States Attorneys Jonathan Siegel and Laura Mantell.

 

Joseph Makhani, 58, Kings Point, Long Island was arrested and indicted today for stealing two brownstones in a complex scheme to defraud owners by using forged deeds and other falsified real estate documents

Makhani targeted the two Harlem brownstones located at 107 West 118th Street and 135 West 131st Street, Harlem, New York, using forged and falsified documents, numerous limited liability corporations under his control, multiple property transfers, an unethical attorney, and abused court processes. Makhani stole the two Harlem brownstones in 2012, and, according to New York state real estate tax filings, he claimed to have only paid $10 for each. Today, the two brownstones have an estimated value of $2.29 million and $1.9 million, respectively. After illegally taking over the two properties, Makhani used forged and falsified documents to cover up his fraud and maintain control of the properties from the true owners’ claims. To this day, Makhani still fraudulently possesses the West 118th Street brownstone, but he lost possession of the West 131st Street brownstone in December 2018 due to unpaid tax liens.

West 118th Street Property

Makhani allegedly used forged deeds and other falsified documents to steal the brownstone located on West 118th Street from an elderly disabled owner. In a New York state tax filing used to further his scheme, a Makhani-controlled corporation claimed to have paid only $10 for the brownstone in 2012. Makhani also falsely claimed that he paid $975,000 for the brownstone when he obtained a $650,000 construction line of credit on the property. Additionally, Makhani fraudulently received a $1.2 million mortgage loan by claiming he had a legitimate title to the stolen brownstone. The elderly and disabled owner of the brownstone never received any money from Makhani for the brownstone, which is now valued at approximately $2.29 million. In 2016 — after renovating the apartments from single room occupancy units to full apartments — Makhani rented each unit out for between $3,000 and $3,400 per month, allowing him to collect a monthly rent income of more than $12,000.

West 131st Street Property

Makhani allegedly illegally transferred ownership of the West 131st Street property in Harlem through the use of fraudulent deeds, shell companies, and strawmen, and by abusing court processes. Prior to Makhani’s fraudulent take over, the last true deed recorded on this property was in the name of an elderly owner who died soon after the deed was recorded in 1975. Allegedly, a beneficiary of the estate looked after the building until his death in 2010. Soon after, a tenant of the building was approached by Makhani, who later returned and told the tenant he had purchased the brownstone. Makhani, through the guise of offering the tenant a job, fraudulently obtained the tenant’s signature in order to misrepresent the tenant as the owner. The tenant, who had not purchased the property and was never the owner of the brownstone, later learned that his signature was forged on a fraudulent deed that had been filed with the City Register’s Office, transferring the brownstone to Makhani’s company, One 35 West Corporation. The Real Property Transfer Report filed along with the fraudulent deed created by Makhani  falsely listed the sale price of the brownstone as $10. When the tenant questioned the validity of the deed in a housing court case, Makhani filed a new forged deed showing that the purported heirs of the last recorded owner from 1975 had transferred the property to Makhani’s One 35 West Corporation. In 2013, the transfer tax documents filed with this deed contained a fake social security number listed for a man who was one of the purported heirs and the seller of the brownstone to Makhani. That social security number, however, belonged to a woman born in 1902. In 2015, Makhani’s One 35 West Corporation and Makhani were fined over $1 million for their failure to install a roof, upgrade the electrical wiring system, and implement an extermination plan for the rodents and cockroaches in the Harlem brownstone. In early 2015, Makhani eventually abandoned the property after the New York City Department of Housing Preservation & Development issued a $1 million judgment. The property was later transferred to a not-for-profit after a tax foreclosure action. Today, the value of the property is estimated at $1.9 million.

Makhani was yesterday charged with one count of Criminal Possession of Stolen Property in the first degree with respect to the brownstone located at 107 West 118th Street; one count of Criminal Possession of Stolen Property in the second degree with respect to the brownstone located at 135 West 131st Street; one count of Residential Mortgage Fraud in the First Degree and one count of Residential Mortgage Fraud in the Second Degree, both with respect to the two residential mortgage loans he obtained for the West 118th Street brownstone; two counts of Falsifying Business Records submitted to a New York bank; and one count of Scheme to Defraud in the First Degree between August 7, 2012 and June 28, 2021 for engaging in a scheme constituting a systematic and ongoing course of conduct to obtain property from more than one person by false or fraudulent pretenses.

The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.

In 1998, Makhani pleaded guilty in federal court to taking part in a scheme involving the bid rigging of foreclosed properties in Queens, New York, and for submission of a false tax return, for which he was fined and sentenced to two months in prison. In 2008, Queens LLC, HPD LLC, and Floor One, LLC, three companies allegedly owned by Joseph Makhani, pled guilty to Falsifying Business Records in the First Degree, a class “E” felony. The criminal complaint alleged that Makhani, personally or through one of his corporations, forged signatures on deeds filed with the New York City Department of Finance to unlawfully gain control of three properties in Queens from their legal owners.

New York Attorney General Letitia James made the announcement.

Homeownership is a critical part of every community, but far too often, individuals like Joseph Makhani conduct elaborate schemes designed to steal New Yorkers’ homes,” said Attorney General James. “Deed theft continues to be a crime that permeates our neighborhoods, and preys upon our most vulnerable, leading to a cycle of displacement and grief. New Yorkers should never have to fear that their homes will be targeted by predatory individuals. My office will continue to collaborate with our government and community partners to bring these schemers to justice and protect these homes.

The Sheriff’s Office is strongly committed to investigating criminal activity concerning real property fraud,” said New York City Sheriff Joe Fucitto. “These crimes are financially devastating to the victims and their families, many of whom are elderly and have spent a lifetime working hard and saving to buy a home. The Sheriff’s Office looks forward to working collaboratively with Attorney General Letitia James and her team.”

The Office of the Attorney General (OAG) wishes to thank the Social Security Administration, the Office of the Inspector General, and Special Agent Gilberto Camilo for their assistance on this case.

The OAG also wishes to thank the New York City Sheriff’s Office and the New York City Register’s Office for their assistance.

Deed theft has become a common tool of career criminals and unscrupulous real estate developers to illegally obtain real estate so they can sell it at a huge profit in high-demand housing markets. This illegal scheme especially affects people of color, the elderly, and other vulnerable homeowners who are scammed into signing over the deeds to their homes to con artists. Deed theft usually happens when scammers forge deeds to look like they purchased the home, or when homeowners are tricked into signing their homes over to a scammer without knowing what they are doing. Scammers then seek to evict the homeowner and sell the house to a third party at a significant profit.

In January 2020, Attorney General James launched the office’s “Protect Our Homes” initiative, a program that uses prevention and enforcement actions to combat deed theft in New York City. The OAG also formed an interagency deed theft taskforce with members that include the district attorneys from all five boroughs in New York City and the Office of the Sheriff of the City of New York. The anti-displacement program builds off these efforts by focusing on the neighborhoods most at-risk of deed fraud, enlisting community members to talk about deed theft with their neighbors, and educating community members about how to spot deed fraud scams.

Those who believe they have experienced deed theft are encouraged to contact the OAG by calling the office’s help line at 1-800-771-7755, emailing deedtheft@ag.ny.gov, or filling out the online complaint form.

This investigation was conducted by Investigator Angel LaPorte, under the supervision of Supervisors of the Major Case Unit Michael Leahy and Mario Rivera and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by Chief Investigator Oliver Pu-Folkes.

The case is being prosecuted by Assistant Attorney General Nazy Modiri of the Real Estate Enforcement Unit, with additional assistance from Assistant Attorney General Gregory Morril and Legal Support Analyst Grace Koh — all under the supervision of Real Estate Enforcement Unit and Public Integrity Bureau Chief Gerard Murphy. Financial analysis was conducted by Audit Investigator Karishma Tukrel, under the supervision of Deputy Chief Auditor Sandy Bizzarro and Chief Auditor Kristen Fabbri of the Forensic Audit Section. The Investigations Bureau, the Real Estate Enforcement Unit, and the Public Integrity Bureau are all part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.

Yorce Yotagri, 54, Freeport, New York, was sentenced today to 12 months and one day in prison for participating in a conspiracy to carry out a $9 million scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a scheme known as “shotgunning”.

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

Yotagri was a business partner of Jorge Flores of Oakdale, New York, and Jose Piedrahita of Freeport, New York two conspirators also charged in the indictment. From 2010 through February 2018, Yotagri, Flores, Piedrahita, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOC) from banks on residential properties in New Jersey and New York.

In August 2016, Yotagri lived at a property in Freeport, New York. A quitclaim deed was prepared that facilitated the transfer of ownership of the property to Yotagri and Piedrahita even though Piedrahita did not own the property.

In September 2016, with the Freeport, New York property now in the names of Yotagri and Piedrahita, the conspirators applied for a $290,000 HELOC from a victim bank in Yotagri’s and Piedrahita’s names using the property as collateral. Piedrahita’s contact information appeared on the HELOC application on the Freeport property, which also contained inflated income and assets for Piedrahita. On Dec. 2, 2016, based on the false representations contained in the application, the victim bank issued a HELOC to Piedrahita for $290,000. Piedrahita then disbursed the $290,000 to himself, Yotagri, and Flores. The HELOC funds were never repaid.

In January 2017, Flores called another victim bank and applied for a second HELOC in Piedrahita’s name for $250,000 – again using the Freeport property as collateral. This time Flores’ email address and phone number appeared on the HELOC application on the Freeport property. To demonstrate to the second victim bank that the property was unencumbered by any senior mortgages, Flores and Piedrahita sent several fraudulent documents to the victim bank to conceal the existence of or amounts owed on senior mortgages. The false documents the defendants submitted included a series of false payoff letters and fake checks from other banks, all submitted to deceive the victim bank into believing that the remaining value of the senior mortgages on the Freeport property was far less than what was actually owed.

On March 22, 2017, the second victim bank issued a HELOC to Piedrahita for $250,000.  Piedrahita then disbursed nearly the entirety of the HELOC funds to himself and Yotagri. The funds obtained by Piedrahita and Yotagri from the HELOC were not repaid and were overdrawn, causing losses to the second victim bank totaling approximately $290,000.

At the time the applications for the two HELOCS were made, there was not sufficient equity in the Freeport property to support the $540,000 in HELOC applications made by Flores, Piedrahita, and Yotagri.

The overall scheme, which included HELOC loans for approximately 17 different properties, resulted in over $9 million in losses to the victim banks.

Yotagri, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an indictment charging him with one count of conspiracy to commit bank fraud. Judge Vazquez imposed the sentence today in Newark federal court.

In addition to the prison term, Judge Vazquez sentenced Yotagri to three years of supervised release and ordered him to pay restitution of $580,048.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), Northeast Region, under the direction of Special Agent in Charge Robert W. Manchak; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

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.

The charges and allegations against Yotagri’s co-defendants contained in the indictment are merely accusations, and they are presumed innocent unless and until proven guilty.

 

Simon Curanaj, 67, Yonkers, New York, was sentenced today to 24 months in prison for his role in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning.”

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

From 2012 through January 2014, Curanaj, Michael Arroyo, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue, Bronx, New York. In 2013, Curanaj, Arroyo, and others transferred ownership of the property to an individual living at the property and his family friend.

Curanaj, Arroyo, and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans Curanaj, Arroyo, and others applied for.

The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Curanaj, Arroyo, and others. Eventually, the family friend defaulted on the two HELOC loans. The overall scheme resulted in $2.2 million in losses to the victim banks.

In addition to the prison term, Judge Vazquez sentenced Curanaj to five years of supervised release and ordered him to pay $2.1 million in restitution. Arroyo was sentenced in September 2018 to 21 months in prison for his role in the scheme.

Curanaj previously pleaded guilty to an information charging him with conspiracy to commit bank fraud. Judge Vazquez imposed the sentence by videoconference today.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak in Newark, and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark, with the investigation leading to today’s sentencing.

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, Office of the Inspector General.

 

Edmundo Roman-Perez, 71, Sunset Park, Brooklyn, an attorney has been sentenced today to 1 to 3 years in prison for stealing approximately $280,000 in down payments he received to hold in escrow from two clients he represented in the sale of their homes. The defendant pleaded guilty to second-degree grand larceny in December 2020.

According to the investigation, in late 2018, a couple hired the defendant to represent them in the sale of their two-family, Sunset Park, Brooklyn home. The home sold for $1,350,000 and the defendant received a $135,000 down payment from the buyers that he should have held in his attorney escrow account until the date of closing, when the funds should have been released to his clients. Instead, the defendant used the money for his own benefit. After closing in March 2019, the defendant issued checks to his clients purporting to cover the $135,000 owed, which bounced upon deposit. The defendant failed to disburse the funds he owed to his clients.

Similarly, between November 2018 and April 2019, the defendant represented three brothers in the sale of their two-family home in Dyker Heights, Brooklyn. The home sold for $1,500,000 and the defendant received a $150,000 down payment from the buyers that he should have held in his attorney escrow account until closing, when he should have released the money to his clients. Instead, the defendant again used the money for his own benefit, and issued the brothers checks purporting to cover the funds owed to each of them. The checks bounced and the defendant failed to distribute the funds he owed to the brothers.

Additionally, the defendant was under indictment in Richmond County related to allegations that he stole client funds. In November 2020, he pleaded guilty to one count of third-degree grand larceny and received a sentence of 1 to 3 years in prison. The Brooklyn and Staten Island sentences will run concurrently.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “Today’s sentence holds this defendant accountable for the serious breach of trust and financial hardship he caused his victims. Let this serve as a reminder that I am committed to protecting Brooklyn’s residents from attorneys and other unscrupulous fraudsters who abuse their positions of authority to take advantage of those they are entrusted to advise and represent.”

The case was investigated by Supervising Financial Investigator Deborah Wey of the District Attorney’s Investigations Division.

The case was prosecuted by Senior Assistant District Attorney Katherine Zdrojeski of the District Attorney’s Public Integrity Bureau, under the supervision of Assistant District Attorney Laura Neubauer, Chief of the Public Integrity Bureau, and Assistant District Attorney Michel Spanakos, Deputy Chief of the Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.