Archives For New York

Gerald Douglas, 52, East Flatbush, Brooklyn, New York was arraigned today on an indictment in which he is charged with second-degree grand larceny for allegedly stealing the down payment toward the purchase of a Brownsville, New York home whose seller he represented.

According to the investigation, the defendant represented a 76-year-old woman in the sale of her Brownsville house, negotiating the contract for her in September 2018. A down payment of $71,700 was allegedly deposited into the defendant’s escrow account. The closing occurred in August 2019, by which time the defendant had allegedly stopped returning his client’s phone calls and she was forced to retain new counsel to close the transaction. The client received the sale proceeds at the closing, but not the down payment despite repeated requests to the defendant.

It is further alleged that in June and July 2018, the defendant asked the same client if she would loan him money, first $6,000 and then $8,000. He allegedly told her he was expecting a rental payment for a property he owned in Flatbush, Brooklyn, though in fact the property had gone into foreclosure five years earlier and he was no longer the owner.

Douglas was released without bail and ordered to return to court on May 12, 2021.

The defendant was disbarred by the Appellate Division Second Department in 2019.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said “The victim in this case was allegedly defrauded of a large sum of money by her own attorney, who had a legal duty to protect her interests. I would like to thank my Public Integrity Bureau for its hard work in seeking to hold the defendant accountable for his alleged criminal act and betrayal of trust.”

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

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

 

Robert Morgan, Todd Morgan, Frank Giacobbe, and Michael Tremiti, have been charged with conspiracy to commit wire fraud and bank fraud for their roles in a wide-ranging mortgage fraud scheme.

According to the indictment, between 2007 and January 2019, the defendants conspired with Kevin Morgan, Patrick Ogiony, Scott Cresswell, and others fraudulently to obtain funds from financial institutions such as Arbor Commercial Mortgage, LLC, Berkadia Commercial Mortgage, LLC, UBS and Deutsche Bank, and government sponsored enterprises, including Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal National Mortgage Association (Fannie Mae).

During the course of the conspiracy, the defendants engaged in a scheme to defraud financial institutions and government sponsored enterprises by providing false information to lenders in support of applications for mortgage loans to purchase properties, refinance properties or build properties. As part of the applications for mortgage loans, the defendants submitted inflated and false rent rolls which included non-existent tenants and inflated rents to fraudulently increase the income for a building in order to justify a loan amount that they would not otherwise qualify for.  Similarly, in order to further inflate the income, defendants told lenders they were receiving fake fees, such as stating that residents paid for cable when it was actually included in the rent.  Defendants also fraudulently reduced and improperly capitalized expenses in order to make the property appear to generate more income to, again, justify a larger mortgage loan than they would otherwise qualify for.

The defendants took steps to conceal the fraud from the lenders, including by making vacant units appear occupied during inspections by turning radios on in vacant units, by placing welcome mats and shoes in hallways outside vacant units, and by paying individuals to pretend to be tenants in units the inspectors would enter.

In the wire fraud conspiracy to defraud insurers, Todd Morgan and Robert Morgan are accused of conspiring with Kevin Morgan and Scott Cresswell to present false and inflated contracts and invoices to insurance companies for repairs after damages to properties in Robert Morgan’s real estate portfolio.

While the loans which were the subject of defendants’ alleged fraudulent conduct exceeded $400 million in value, the total loss sustained by financial institutions and government sponsored enterprises throughout the mortgage fraud scheme is currently estimated to exceed $9,500,000. The loss resulting from the insurance fraud scheme is currently estimated at approximately $3,000,000.

The defendants were arraigned before U.S. Magistrate Judge H. Kenneth Schroeder and were released on conditions.

Defendants Kevin Morgan and Patrick Ogiony were previously convicted of conspiracy to commit bank fraud, and defendant Scott Cresswell was previously convicted of conspiracy to commit wire fraud for their roles in the multi-million dollar fraud scheme. All three defendants are awaiting sentencing.

The defendants each face charges of wire and bank fraud. Robert and Todd Morgan are also charged with defrauding insurance companies. The charges carry a maximum penalty of 30 years in prison and a fine in the amount of double the loss caused by the crimes.

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

Upon executing search warrants in this case, my Office, together with our law enforcement partners, acted quickly to take action in an effort to try to limit the amount of damage occasioned by the defendants’ alleged widespread fraud,” noted United States Attorney Kennedy.  “While that effort succeeded in that objective, the unfortunate truth is that the swiftness with which we moved may have also contributed to the reasons for which the original indictment in this case was dismissed by the Court.  In the end, however, this new indictment now ensures that the defendants will be held to answer for the serious crimes alleged therein.”

The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, and the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent-in-Charge Robert Manchak, Northeast Region.

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.

 

Iskyo Aronov (also known as “Isaac Aronov”) Middle Village, New York, Ron Borovinsky, Hollis Hills, New York and Michael Konstantinovskiy, Roslyn Heights, New York have been charged in a wide-ranging mortgage fraud scheme to defraud the government.

In a complaint unsealed today, Aronov, Borovinsky, Konstantinovskiy, and companies that they owned or controlled (175 Vernon Ave. Inc., 308 Linde St. LLC, 725 Management LLC, 1021 B Holdings LLC, 1083 Lafayette Ave. LLC, 1178 Gates Ave. Inc., 2320 Baeumont Ave Unit 3d LLC, 1S8C Holdings LLC , Ag2 Equities, Inc., Arbie Management Inc., Bedstuy Group LLC, Bert Holdings LLC, BNE Management LLC, Etuy Equities LLC, IA Investors LLC, IJ Development LLC, LL Fund Inc., LL Organization Inc., MI 1 Holdings LLC, MIP Management Inc., My Ideal Property Group LLC, My Ideal Property Rockaway Blvd. LLC, National Homeowners Assistance Inc., Phase 2 Development LLC, Pim Equities Inc., Settle NY Corp, ZOR Equities LLC, ZT Equities LLC), have been charged in engaging in a fraudulent short sales of residential properties insured by the Federal Housing Administration (FHA) of the United States Department of Housing and Urban Development (HUD).

Pursuant to HUD’s Pre-Foreclosure Sale Program, qualifying homeowners with defaulted, FHA-insured mortgages may sell their properties in a “short sale” for less than the balance of the mortgage if the sale is for the fair market value of the property.  If a homeowner obtains approval for a short sale, the lender releases the mortgage after the short sale and submits an FHA insurance claim to HUD to cover the outstanding mortgage balance net of the short sale proceeds, plus approved costs and interest.  HUD, in turn, pays the lender’s claim from federal funds.

Aronov was the founder, Chief Executive Officer and President of defendants My Ideal Property Inc., My Ideal Property Group LLC and MIP Management Inc., and also controlled other affiliated corporate entities that he allegedly established to help him fraudulently acquire residential properties.  Borovinsky identified himself as a co-founder with Aronov of My Ideal Property.  Konstantinovskiy worked as an agent for My Ideal Property where he allegedly conspired with others to fraudulently obtain properties.

As alleged in the complaint, from at least 2013 through 2016, the defendants defrauded HUD by manipulating the short sale process to acquire residential properties from numerous distressed homeowners for below-fair market value prices in non-arm’s-length transactions.  The individual defendants used various corporate entities in furtherance of the fraudulent scheme.  In the process, defendants made a host of material misrepresentations in critical transaction documents.  As a result, defendants not only acquired the properties for below-fair market value prices, but obtained broker fees in the transactions and induced lenders to release the FHA-insured mortgages at a loss.  In turn, HUD paid the lenders’ claims for FHA insurance from federal funds.  These payments by HUD were artificially inflated as a result of the defendants’ fraudulent conduct.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Region (HUD-OIG), and Robert Manchak, Special Agent-in-Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region (FHFA-OIG), announced the filing.

As alleged, these defendants fraudulently obtained homes at depressed prices at the expense of a taxpayer-funded program designed to assist borrowers seeking the American Dream of home ownership,” stated Acting U.S. Attorney Seth DuCharme.  “This Office is committed to protecting the integrity of the FHA insurance program from those who try to enrich themselves through predatory mortgage fraud schemes.

The defendants allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, homeowners, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners.  In addition, the artificial devaluation of residential properties will slow the recovery of market values at a time of economic challenge when affordable housing is at a premium,” stated HUD-OIG Special Agent-in-Charge Scaringi.

The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who waste, steal, or abuse the resources of the Government-Sponsored Enterprises regulated by FHFA.  We are proud to have partnered with the U.S. Attorney’s Office for the Eastern District of New York in this case,” stated FHFA-OIG Special Agent-in-Charge Manchak.

The suit is brought pursuant to the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

The government’s complaint intervenes in a lawsuit originally brought by under the qui tam provisions of the FCA.  Under the FCA, private citizens with knowledge of fraud against the government can bring a lawsuit on behalf of the United States and share in the recovery.  The act also permits the government to intervene in such actions, as the government has done in this case.  The government’s case is being handled by Assistant United States Attorney Michael J. Castiglione, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.

 

Alagi Samba, 50, Bronx, New York, who was convicted of conspiracy to commit wire and mail fraud affecting a financial institution, was sentenced today to time served.

Between about June 2008 and February 2009, the defendant conspired with others to devise a scheme to commit mortgage fraud and obtain eight loans for unqualified borrowers for homes in the Bronx, New York.

As part of the scheme, Samba served as a realtor on behalf of co-conspirator Daniel Badu in the purchase of a property in the Bronx, New York. The defendant was aware that Badu was employed as a home health aide and did not have the income or assets to qualify for a mortgage loan in the amount of $574,543 to purchase the property. Samba obtained Badu’s personal identification information and business documents and provided them to another co-conspirator, a mortgage broker, knowing that the documents would be altered or falsely created to indicate that Badu was an ophthalmologist at his company Eagle Eyes. In addition, fraudulent paystubs and tax returns were submitted to support the loan application. Samba provided these false loan documents in order to secure a loan insured by the Federal Housing Administration. Based on that false application and supporting documentation, the loan was approved.

The defendant and his co-conspirators arranged for additional fraudulent loans to be approved, including another loan for Badu, and caused wire communications to be transmitted in interstate commerce for those loans. The defendant caused losses of approximately $547,000 affecting financial institutions in Buffalo and elsewhere.

Five co-defendants, including Daniel Badu, were previously convicted and sentenced.

Samba was also ordered to pay restitution totaling $790,350.40 to M&T Bank and the U.S. Department of Housing and Urban Development.

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

The sentencing is the result of an investigation by the United States Postal Inspection Service, Boston Division, under the direction of Inspector-in-Charge Joseph W. Cronin, Boston Division; the Department of Housing and Urban Development, under the direction of Special Agent in Charge Brad Geary; and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia.

Tina Brown, 45, Bronx, New York, who was convicted of conspiracy to commit wire fraud affecting a financial institution, was sentenced today to six months home detention.

Between about June 2008 and February 2009, the defendant conspired with others to devise a scheme to commit mortgage fraud and obtain eight loans for unqualified borrowers for homes in the Bronx, New York. As part of the scheme, Brown used a relative to purchase a property located at 4087 Edson Avenue, Bronx, New York. The defendant falsely verified that the purchaser worked for her own company in order fraudulently to inflate the purchaser’s income so that she would qualify for a mortgage for that property. Brown knew that these false loan documents were submitted to The Funding Source, a mortgage bank, in order to secure a loan insured by the Federal Housing Administration. Based on that false application and supporting documentation, the loan was approved. The Funding Source sold the loan on the secondary market to M &T Bank, which wired funds from New York through the State of Ohio to purchase the loan.

The defendant and her co-conspirators arranged for additional fraudulent loans to be approved. These fraudulent transactions caused losses of approximately $244,000 to M&T Bank, Citibank, and the U.S. Department of Housing and Urban Development.

Four co-defendants were previously convicted and sentenced: Gregory Gibbons, a mortgage broker, was sentenced to time served; Laurence Savedoff, an attorney, was sentenced to serve four months in prison; Julio Rodriguez, an appraiser, was sentenced to serve six months in prison; and Daniel Badu, a borrower, was sentenced to time served. Defendant Alagi Samba has been convicted and is awaiting sentencing.

The defendant was also ordered to pay restitution totaling $220,042.17 to the U.S. Department of Housing and Urban Development and Citibank.

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

The sentencing is the result of an investigation by the United States Postal Inspection Service, Boston Division, under the direction of Inspector-in-Charge Joseph W. Cronin, Boston Division, the Department of Housing and Urban Development, under the direction of Special Agent in Charge Brad Geary, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.

Jacqueline Graham, 54, formerly of Antioch, California, and Levittown, Pennsylvania was sentenced today to 132 months in prison in connection with a $38 million fraudulent mortgage debt elimination scheme.

According to the Indictment in the case, the evidence presented at trial, and statements made in public court filings and proceedings, including Graham’s sentencing hearing:

From at least 2011 to at least 2012, Graham partnered with Bruce Lewis, 67, formerly of Alaska and Washington State, and John Ruzza 49, formerly of Mahopac, New York in operating the Valhalla, New York-based Terra Foundation, which held itself out as a business that would investigate and eliminate mortgage loans in exchange for fees, soliciting clients who were having difficulties making their mortgage payments.  In fact, however, Terra engaged in a wide-ranging scheme to defraud clients, county clerks’ offices, and banks.

The fraudulent scheme, which was created by Graham and Lewis, involved Terra performing “audits” of clients’ mortgages, sending pseudo-legal paperwork to the banks and/or lenders holding the mortgages, and ultimately filing purported mortgage discharges with the relevant county clerks’ offices.  As a result, anyone doing a title search for one of Terra’s clients would see that the client’s mortgage had been satisfied.  The mortgages had not, however, been discharged, and the mortgages were eventually reinstated, after the clients paid their fees.

In order to effectuate the scheme, Graham, Lewis, and Ruzza involved others, including Rocco Cermele, 57, Yonkers, New York the director of operations, Paula Guadagno, 62, Verplanck, New York, who filed discharges on behalf of Terra, and Anthony Vigna, 61, Thornwood, New York, a lawyer and CPA who worked in Terra’s offices.  Vigna was formerly an Assistant Corporation Counsel for the City of Yonkers, and a college accounting and law professor, including stints on the faculties of Mercy College, Iona College, SUNY Maritime College, College of Mount St. Vincent, and Westchester Community College.

In total, Graham and her co-conspirators filed over 60 fraudulent discharges in Westchester and Putnam Counties in New York, and in Connecticut.  The fraudulent discharges claimed to discharge mortgages with a total loan principal of nearly $38 million. http://www.mortgagefraudblog.com/?s=Jacqueline+Graham

In addition to her prison term, Graham was sentenced to five years of supervised release and ordered to pay restitution to her victims in the amount of $694,450 and forfeiture of $138,941.86.

Lewis was previously was sentenced by Judge Román to seven years in prison, three years of supervised release, and forfeiture of $149,408.

Vigna was previously was sentenced by Judge Román to one year and one day in prison, three years of supervised release, and $250,500 of restitution.

Ruzza was previously pled guilty before U.S. District Judge Cathy Seibel to one count of participating in a conspiracy to commit mail fraud, wire fraud, and bank fraud relating to the Terra scheme, as well as one count of participating in a conspiracy to commit wire fraud, two counts of bank fraud, two counts of wire fraud, and one count of obstruction of justice.

Cermele and Guadagno previously pled guilty to their participation in the scheme.

Graham previously was convicted in June 2019 after a two-week trial before U.S. District Judge Nelson S. Román, who also imposed today’s sentence.

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

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Jacqueline Graham brazenly defrauded vulnerable homeowners during the housing crisis by falsely promising that, for substantial fees, she could make millions of dollars of their mortgage debt disappear.  In reality, she pilfered her victims’ money, leaving them far worse off, and some ended up losing their homes.  Now Graham will spend 11 years in federal prison for preying upon her many victims.”

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Berman also thanked the Westchester County District Attorney’s Office and the Department of Housing and Urban Development for their assistance in the case.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys David Felton, Michael Maimin, and James McMahon are in charge of the prosecutions.

Craig Hecht, 52, Mount Sinai, New York, was sentenced today for stealing a vacant brownstone worth over $1 million in a deed fraud scheme targeting an 80-year-old Bedford-Stuyvesant homeowner.

According to the evidence, Hecht and an unapprehended co-defendant stole the deed to 260 Clifton Place, Bedford-Stuyvesant, New York, a brownstone owned by an 80-year-old retired teacher. The victim and her family lived in the residence for over three decades. In 2010, the family vacated the property after a fire made the building uninhabitable.

Hecht formed an entity called Ernestina Thomas LLC that he filed with the New York State Department of State on April 20, 2015. Ten days later, the co-defendant opened a bank account called Ernestina Thomas LLC (ET). The victim did not know about or consent to any of this.

On September 18, 2015, according to the evidence, Hecht set up a closing where 260 Clifton Place was transferred to an entity called TDA Development. A deed with the victim’s forged signature, which transferred the property from her to TDA, was filed and recorded with the City Register. The bulk of the proceeds of the sale went into an ET account which the co-defendant controlled.

Shortly thereafter, Hecht offered 260 Clifton Place to a prospective buyer. On November 5, 2015, the co-defendant opened a bank account for TDA and the following day the property was transferred from TDA to the buyer at a closing for $850,000, with most of the proceeds of that sale going into the co-defendant’s TDA account. From the funds stolen out of the two closings, the co-defendant wired $190,000 to an account he had in Athens, Greece, withdrew another $120,000 in a series of cash withdrawals and transferred over $250,000 to an account held by Hecht’s wife. http://www.mortgagefraudblog.com/man-indicted-for-forging-deed/

The victim was notified of the theft when a neighbor called to tell her that someone was working on the house and introduced himself as the new property owner. She then notified the District Attorney’s Office.

Hecht was sentenced to one-and-a-half to four-and-a-half years in prison by Brooklyn Supreme Court Justice Danny Chun, who nullified the deed the defendant forged and issued a judgment order of restitution for $850,000 to the title insurance company for losses it incurred reimbursing the home buyer. The defendant pleaded guilty to second-degree grand larceny and second-degree money laundering on December 4, 2019.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “This defendant targeted an elderly homeowner, forging her signature and capitalizing on her absence in an underhanded effort to steal her home. I remain committed to protecting Brooklyn homeowners and I hope today’s sentence sends a clear message to those trying to take advantage of seniors or those considering selling their homes —you will be prosecuted and held fully accountable for your crimes.”

The case was investigated by Detective Investigators assigned to the KCDA Investigations Bureau. Supervising Financial Investigator Vincent Jones, of the District Attorney’s Investigations Division, assisted in the investigation.

The case was prosecuted by Senior Assistant District Attorney Linda Hristova, with assistance from Senior Assistant District Attorney Elliott Wertheim and Senior Assistant District Attorney Patrick Cappock, of the District Attorney’s Frauds Bureau, under the supervision of Assistant District Attorney Richard Farrell, Chief of the District Attorney’s Real Estate Fraud Unit and Assistant District Attorney Michel Spanakos, Deputy Chief of the District Attorney’s Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the District Attorney’s Investigations Division.

Yorce Yotagri, 53, Freeport, New York, today admitted 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 ,Oakdale, New York, and Jose Piedrahita,  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 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. http://www.mortgagefraudblog.com/?s=Yorce+Yotagri

Yotagri faces a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 25, 2020.

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

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 of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea.

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.

Defense counsel: Randy Scott Zelin Esq., New York

Edmundo Roman-Perez, 70, Sunset Park, Brooklyn, an attorney has been arraigned today on an indictment in which he is charged with several counts of grand larceny for allegedly stealing approximately $280,000 in down payments he received to hold in escrow from two clients he represented in the sale of their homes.

According to the investigation, between October 2018 and March 2019, the defendant represented a couple in the sale of their $1,350,000 two-family home in Sunset Park, Brooklyn. It is alleged that the defendant received a $135,000 down payment from the buyers that he was to hold in escrow until closing.

In March 2019, shortly after the closing, the defendant issued two checks to cover the amount of the down payment, each in the amount of $65,600, both checks were allegedly returned because of insufficient funds.

Similarly, between November 2018 and April 2019, the defendant represented three brothers in the sale of their $1,500,000 two-family home in Dyker Heights, Brooklyn. It is alleged that the defendant received a $150,000 down payment from the buyers that he was to hold in escrow until closing.

In April 2019, three days after closing, the defendant allegedly issued three checks to the victims, each in the amount of $49,187.10, to cover the amount of the down payment. It is alleged that all three checks were returned because of insufficient funds.

Roman-Perez was arraigned today before Brooklyn Supreme Court Justice Danny Chun on an indictment in which he is charged with second-degree grand larceny, three counts of third-degree grand larceny and five counts of issuing a bad check. He was released without bail and ordered to return to court on April 1, 2020.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “This defendant allegedly betrayed the trust of his clients and abused his power as an attorney, taking advantage of the escrow accounts he controlled to steal hundreds of thousands of dollars. We will now seek to hold him accountable for this serious breach of trust.

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

The case is being prosecuted by Senior Assistant District Attorney Katherine Zdrojeski of the District Attorney’s Public Integrity Unit, under the supervision of Assistant District Attorney Laura Neubauer, Chief of the Public Integrity Unit, 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.

 

Vision Property Management, LLC, a South Carolina based real estate company, its CEO Alex Szkaradek, and a number of affiliated companies have agreed today, subject to court approval, that more than $3.75 million will be paid in consumer restitution for engaging in and operating an illegal, deceptive, and unlicensed mortgage-lending business that targeted, among others, the disabled, the elderly, single parents, and others living on fixed incomes.

Specifically, the settlement includes cash payments of $600,000 that will be distributed to numerous New York consumers who were victims of Vision’s conduct and have, for the most part, moved out of their previous homes. Additionally, more than $3.15 million in unpaid principal for 58 homes will be forgiven by Vision as restitution. The ownership of these 58 homes will be transferred, free and clear of any future payments, to Vision’s current New York consumers. Additionally, the defendants must wind down their remaining business in New York over the following year, and along with any businesses they take a controlling interest in, are permanently enjoined from engaging in any future residential real estate business in New York.

The settlement is set to resolve an August 2019 federal lawsuit, filed in the Southern District of New York, alleging that, since at least 2011, Vision and its affiliates profited from predatory, subprime home loans at the expense of some of the most vulnerable New Yorkers, primarily in Upstate and Central New York. In the complaint, Attorney General James and Superintendent Lacewell accused the company of buying severely distressed properties and marketing them at a substantial markup with high-cost, interest rates, in the range of 10% to 25%. Vision rarely disclosed these high interest rates and typically made no repairs or renovations to the dilapidated homes they were selling, illegally passing those costs on to consumers. Further, Vision was not properly licensed to engage in seller finance lending in New York, which it was required to be beginning in late 2011, and thus was operating illegally when entering into these transactions.

The lawsuit further charged that Vision targeted vulnerable consumers who , by the company’s own admission, were eager to share in the American dream of homeownership, but could not qualify for conventional financing due to various employment, health, marital, or other financial reasons. While Vision claimed its “unique” business model was a path to homeownership, in reality, the company made significant profits with little risk by skirting consumer protections and financial regulations and trapping consumers with high cost mortgages and often uninhabitable homes.

Despite placing the burden of repairing and maintaining the homes on consumers, Vision did not fully disclose the many dangerous, unhealthy, and unsafe conditions in its homes, and in many instances concealed the extent of these conditions by leaving the electricity and other utilities turned off while consumers took walk throughs of the homes. These conditions included pest infestations; faulty electrical wiring; water damage; missing heaters, pipes, water tanks, and septic systems; mold; asbestos; foundation damage; and severely damaged and rotted out, floors, windows, walls, and roofs. The high cost of Vision’s loans combined with the significant cost of repairing these violations set consumers up to fail. Moreover, Vision routinely evicted consumers who had invested substantial sums of money in repairs without offering them the foreclosure protections to which they were entitled.

The settlement being announced today is still subject to final court approval.

New York Attorney General Letitia James and New York Superintendent of Financial Services Linda Lacewell made the announcement.

Vision’s illegal and deceptive practices that were targeted against New York’s most vulnerable residents will finally be put to an end,” said Attorney General James.Owning a home is what millions of New Yorkers dream of, but Vision turned that dream into a nightmare. Not only are we shutting down this company’s illegal New York racket, but we are securing restitution for the many victims and are ensuring 58 families have their mortgage debts wiped away. A fair and transparent housing market is essential for the health, welfare, and economic stability of New York and its residents, which is why my office will never stop fighting to hold companies responsible for their deceptive actions. I want to thank Superintendent Lacewell and her team at DFS for their partnership and diligent work throughout this case.”

Vision property management stole from hundreds of New Yorkers who sought the American dream of homeownership,” added Superintendent Lacewell. “This settlement holds Vision accountable for their illegal actions and provides a measure of restitution to New Yorkers who were victimized by Vision’s predatory practices. This is a clear message that New York has zero tolerance for those who rely on deception and fraud to turn a profit, and I commend Attorney General James and the staff of both DFS and the Attorney General’s office for their hard work on this important matter.”

In August 2019, Attorney General James and Superintendent Lacewell reached a settlement with New York-based hedge fund Atalaya Capital Management LP, for its role in funding and assisting Vision and its affiliates in their illegal business. Under that settlement, Atalaya paid New York $250,000 in civil penalties, agreed to abide by injunctive terms intended to prevent future wrongdoing, and paid more than $2.5 million in restitution to consumers, which is now being distributed to more than 100 New York homeowners in the form of monetary payments and payment cancellation.

This matter was handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Bureau Chief Jane M. Azia and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo and First Deputy Attorney General Jennifer Levy.

Additional attorneys handling this matter for the Department of Financial Services included Deputy Superintendent Peter C. Dean and Supervising Attorney in the Consumer Protection and Financial Enforcement Division Cynthia M. Reed.