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Jury Finds 2 Guilty of Participating in Nationwide Foreclosure Rescue Scam

Stephanie Abbott —  December 1, 2022 — Leave a comment

Lorin Kal Buckner, 66, Hamilton, Ohio, and Dessalines Sealy, 59,  Brooklyn, New York, were two of four defendants who were convicted of crimes related to their participation in a foreclosure rescue scheme that defrauded at least 780 financially distressed homeowners throughout the United States. The defendants preyed on homeowners who had defaulted on their mortgages and convinced the victims to pay to take part in fraudulent programs on the promise it would save their homes

According to court documents and trial testimony, from 2013 through 2018, the defendants took advantage of homeowners’ desperation to save their homes and used money from homeowner victims to personally enrich themselves.

Co-conspirators used companies to engage in a multi-level marketing scheme. The companies named in this case include:

  • MVP Home Solutions, LLC, also known as
    • Stay In or Walk Away;
  • Bolden Pinnacle Group Corp., also known as
    • Home Advisory Services Network
    • Home Advisory Services Group Inc.; and
  • Silverstein & Wolf Corp.

Defendants promised affiliates commissions by recruiting distressed homeowners to the above-named companies.

They used multiple ways to recruit affiliates, including conference calls and direct mailings. For example, some co-conspirators hosted weekly conference calls where participants from across the country dialed in to hear details of the scheme and share sales strategies. During the calls, defendants encouraged affiliates to recruit homeowners to their companies on the promise of easy money.

Affiliates were encouraged to be aggressive in recruiting homeowners. Affiliates used online databases and court records to identify vulnerable, financially distressed homeowners who had recently received notice of foreclosure on their home.

Co-conspirators mailed more than 56,000 postcards in the Southern District of Ohio and elsewhere promising that they could “stop foreclosure” or “stop the sheriff sale” for a fixed fee. Co-conspirators also reached out to homeowners using Craigslist ads, websites, email and social media platforms.

On the promise of reducing or eliminating mortgage obligations in exchange for a fee, initial recruiters would collect payments from homeowners and refer the victims to the co-conspirator companies.

Among other things, the referral programs promised:

  • to negotiate with mortgage lenders on the homeowners’ behalf for the purchase of the mortgage notes at a discount;
  • to negotiate the sale of their home and release of their mortgage loans through a short sale and/or deed in lieu of foreclosure sale;
  • to stop an imminent foreclosure sale;
  • to remove the mortgage lien via a tender offer; and
  • achieve short sale prices at a fraction of the value of the outstanding lien/note.

Further, defendants represented that they had “proprietary” methods or “legal tactics” to help homeowners stall or completely avoid foreclosure. In actuality, the defendants persuaded homeowners to file chapter 13 bankruptcies to delay foreclosure actions.

Defendants filed skeletal bankruptcy petitions that they called “pump fakes” or “missiles,” These petitions intentionally failed to disclose the co-conspirators as preparers giving the appearance that the homeowners had filed the petitions pro se. Any relief from foreclosure delay was temporary until the bankruptcy court dismissed the proceeding.

Buckner and Sealy’s verdicts were announced today following the trial before Senior U.S. District Judge Michael R. Barrett. The other two trial defendants, Joel Harvey, 40, Cincinnati, Ohio and Garrett Stevenson, 45, Cincinnati, Ohio, pleaded guilty during the trial.

The jury convicted Buckner and Sealy of conspiracy to commit mail and wire fraud as well as conspiracy to commit bankruptcy fraud.

Buckner, Sealy, Harvey and Stevenson are four of 13 total defendants in this case.

“The defendants took advantage of folks’ financial despair and emotional vulnerabilities to fill their own pockets,” said U.S. Attorney Kenneth L. Parker. “It was a priority for our office and our law enforcement partners to address this nationwide foreclosure scheme.”

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Robert Manchak, Special Agent in Charge, Federal Housing Finance Agency –  Office of Inspector General (FHFA-OIG), Northeast Region; J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; Lesley C. Allison, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Pittsburgh Division; and Philip R. Bartlett, Inspector in Charge, USPIS, New York Division, announced today’s verdict. Assistant United States Attorneys Ebunoluwa A. Taiwo and Timothy S. Mangan are representing the United States in this case.

 

 

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A.G.’s Office Collects Restitution from Defendant in Mortgage Fraud Scheme

Stephanie Abbott —  May 24, 2022 — Leave a comment

The Financial Litigation Program (FLP) of the U.S. Attorney’s Office for the Northern District of Ohio collected $333,549.82 in restitution from a defendant convicted of participating in a $40 million mortgage fraud scheme.

According to court records, a notice of judgment satisfaction was approved for Defendant John J. Dubay on Monday, May 23, 2022.  In 2014, Dubay was convicted by a jury of bank fraud and conspiracy to commit bank fraud.  Dubay and others were part of a mortgage fraud conspiracy involving dozens of properties along Florida’s Gulf Coast.  As part of the scheme, Dubay and others acted as straw buyers who made false statements, misrepresentations and other omissions in the mortgage loan application process.

As a result of the scheme, Dubay and others obtained numerous home mortgage loans under false and fraudulent pretenses with a total face value of approximately $40 million, many of which ended up in default and foreclosure.

Dubay was sentenced to prison in September 2015 and ordered to pay $333,549.82 in restitution for his role in the conspiracy.

Acting U.S. Attorney Michelle M. Baeppler made the announcement.

This case was investigated by the FBI.  The financial litigation was handled by Assistant U.S. Attorney Suzana K. Koch.  This case was criminally prosecuted by Assistant U.S. Attorneys Robert J. Patton and Om Kakani.

The U.S. Attorney’s Office is responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.

While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

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Couple Plead Guilty To Defrauding Mortgage Assistance Program

Stephanie Abbott —  August 19, 2020 — 2 Comments

Christopher Lee Horn, 58, and Sondra Horn, 57, both of Richville, Minnesota, a former Mount Vernon, Ohio couple pleaded guilty today to accepting federal mortgage assistance in Ohio while living in another state and renting the Ohio property to a tenant.

Part of the relief programs funds targeted aid to families in states hit hard by the 2008 economic and housing market downturn. The program provided state housing finance agencies funding to develop locally tailored foreclosure prevention solutions. In Ohio, the housing finance agency created “Save the Dream Ohio,” a statewide program focused on unemployed and underemployed homeowners at risk of mortgage loan default or foreclosure.

According to court documents, the Horns admitted to receiving more than $14,000 in Save the Dream Ohio mortgage assistance funds to which they were not entitled.

In September 2014, the couple received more than $2,800 in rescue payment assistance and was approved to receive 18 monthly mortgage assistance payments of $692 each for their property at 18 Marion Street in Mount Vernon.

Also in September 2014, Christopher and Sondra Horn negotiated to rent their Marion Street residence to a tenant for $655 per month. In later months, the amount increased. The couple requested the tenant pay his monthly rent in cash or personal check to a third party, who then deposited the money into a joint credit union account controlled by the Horns.

Both pleaded guilty to conspiring to defraud the United States Treasury Department’s Troubled Asset Relief Program.

Each pleaded guilty to conspiring to commit theft of government property, a crime punishable by up to 10 years in prison.

“Today the defendants join 388 defendants convicted of crimes the Special Inspector General for the Troubled Asset Relief (SIGTARP) investigated,” said Special Inspector General Christy Goldsmith Romero. “Christopher and Sondra Horn knowingly defrauded a TARP program that helps unemployed homeowners stay in their primary home. The Special Inspector General commends the Office of the U.S. Attorney for the Southern District of Ohio for standing with SIGTARP to combat rescue fraud.”

Congress sets the maximum statutory sentence. Sentencing of the defendants will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.

David M. DeVillers, United States Attorney for the Southern District of Ohio; and Special Inspector General Christy Goldsmith Romero, Troubled Asset Relief Program; announced the plea offered today before U.S. Magistrate Judge Norah McCann King. Assistant United States Attorney Sheila G. Lafferty is representing the United States in this case.

 

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11 Charged in National Foreclosure Relief Scam

Stephanie Abbott —  March 20, 2019 — Leave a comment

Eleven people from across the country have been charged with conspiracy to commit mail and wire fraud in a scheme to defraud distressed homeowners by falsely representing that they could help the victims save their homes. The indictment was returned on March 6, 2019 and unsealed today.

Eight defendants have been arrested to date:

Name Also Known As Age Residence
Lorin K. Buckner 62 Hamilton, Ohio
Garrett Stevenson 41 Cincinnati, Ohio
Damien Byrd 40 Norfolk, Virginia
Stacy Kay Slaughter 58 Gahanna, Ohio
Marcus A. Mullings, Jr. 57 Hackensack, New Jersey
Talia Marie Stephen-Mullings Marie Hightower 36 Hackensack, New Jersey
Amal Mahepaul Balmacoon Martin 37 South Ozone Park,  New York
John Nelson 66 Brooklyn, New York

Companies named in the indictment include:

  • MVP Home Solutions, LLC, also known as Stay In or Walk Away
  • Bolden Pinnacle Group Corp., also known as Home Advisory Services Network andHome Advisory Services Group Inc.
  • Silverstein & Wolf Corp.

Joel Harvey, 36, Cincinnati, Ohio, Dessalines Sealy, 55, Brooklyn, New York, and Rafiq Bashir, 35, Jacksonville, Florida have also been charged in the indictment.

According to the 26-count indictment, from 2013 through 2018, the defendants took advantage of homeowners’ desperation to save their homes and used money from homeowner victims to personally enrich themselves.

It is alleged that defendants were involved in a multilevel marketing scheme, which promised affiliates commissions by recruiting distressed homeowners to the above named companies.

They used multiple ways to recruit affiliates, including conference calls and direct mailings. For example, some co-conspirators hosted weekly conference calls where participants from across the country dialed in to hear details of the scheme and share sales strategies. During the calls, defendants encouraged affiliates to recruit homeowners to their companies on the promise of easy money.

Some co-conspirators also allegedly promoted, organized and attended conferences in which affiliates came to hear details of the scheme in person. For example, some co-conspirators organized and participated in a national conference in Columbus, Ohio in April 2015 in which they provided “deep impact training” and techniques for affiliates to convince homeowners to enroll in Bolden Pinnacle Group and Silverstein & Wolf Corporation programs.

Affiliates were encouraged to be aggressive in recruiting homeowners. Affiliates used online databases and court records to identify vulnerable, financially distressed homeowners who had recently received notice of foreclosure on their home.

According to the indictment, some co-conspirators mailed more than 22,000 postcards in the Southern District of Ohio and elsewhere promising that they could “stop foreclosure” or “stop the sheriff sale” for a fixed fee. Co-conspirators also reached out to homeowners using Craigslist ads, websites, emails and social media platforms.

On the promise of reducing or eliminating mortgage obligations in exchange for a fee, initial recruiters would collect payments from homeowners and refer the victims to the co-conspirator companies.

Among other things, the referral programs promised:

  • to negotiate with mortgage lenders on the homeowners’ behalf for the purchase of the mortgage notes at a discount;
  • to negotiate the sale of their home and release of their mortgage loans through a short sale and/or deed in lieu of foreclosure sale;
  • to stop an imminent foreclosure sale;
  • to remove the mortgage lien via a tender offer; and
  • achieve short sale prices at a fraction of the value of the outstanding lien/note.

Further, defendants represented that they had “proprietary” methods or “legal tactics” to help homeowners stall or completely avoid foreclosure. In actuality, the indictment says defendants persuaded homeowners to file chapter 13 bankruptcies in order to delay foreclosure actions.

Defendants allegedly filed skeletal bankruptcy petitions that they called “pump fakes.” These petitions intentionally failed to disclose the co-conspirators as preparers and named the homeowners as filing pro se. Any relief from foreclosure delay was temporary until the bankruptcy court dismissed the proceeding.

In 2014 alone, one defendant allegedly prepared and filed petitions for 30 homeowners without their knowledge, including four homeowners in the Southern District of Ohio.

The indictment includes one count of conspiracy to commit mail fraud and wire fraud, four counts of mail fraud, seven counts of wire fraud, 12 counts of bankruptcy fraud, one count of bank fraud and one count of aggravated identity theft.

“These programs were fraudulent,” U.S. Attorney Glassman said. “The defendants performed virtually no negotiations on behalf of the homeowners and never successfully purchased a mortgage note or provided a new, lower-cost mortgage. They never removed a mortgage lien or performed short sales as advertised.”

“To prey on individuals desperate to find a way to save their homes is unconscionable. What makes this crime even more egregious is the alleged methods these individuals used to lure their victims, and the extensive planning and details by these scammers to not take ‘no’ for an answer if a victim was not willing to enter their program. If you believe in karma, this is what law enforcement brought today when these scammers were arrested and brought to justice for their despicable crimes,” said Inspector in Charge Philip R. Bartlett.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Robert  Manchak, Acting Special Agent in Charge, Federal Housing Finance Agency –  Office of Inspector General (FHFA-OIG), Northeast Region, Todd Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, Tommy D. Coke, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Pittsburgh Division, and Philip R. Bartlett, Inspector in Charge, USPIS, New York region, announced the charges.

U.S. Attorney Glassman commended the investigation of this case by the FHFA-OIG, USPIS, and FBI, as well as Assistant United States Attorney Ebunoluwa A. Taiwo, who is prosecuting the case.

An indictment merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law.

If you believe you are a potential victim of this fraud, please contact the FBI at CIForeclosure@fbi.gov or 513-421-4310.

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Man Indicted for Overstating Income to Obtain a Mortgage

Stephanie Abbott —  August 30, 2018 — Leave a comment

Bobbie W. Williams, a.k.a. Robert W. Williams, 56, Akron, Ohio was indicted for using a fraudulent Social Security number and falsely overstating his income to obtain a mortgage of more than $300,000.

The indictment alleges Williams falsified information on his loan application in order to secure the purchase of the property located on Ridgewood Road, Akron, Ohio. Then, after Williams could not make the payments on the property and it went into foreclosure, he falsified information in his bankruptcy petition, including his true identity and his ownership of the Ridgewood Road property.

An indictment is only a charge and is not evidence of guilt.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Williams is charged with on one count of bank fraud and two counts of bankruptcy fraud.

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations.  In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.

The matter is being prosecuted by Assistant U.S. Attorney Mark S. Bennett, and Special Assistant U.S. Attorney Amy Good, Trial Attorney, United States Trustee, after an investigation conducted by the U.S. Department of Housing and Urban Development, Office of Inspector General and the Cleveland office of the Federal Bureau of Investigation.

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Plea for Non-Existent REIT Investments

Rachel Dollar —  June 6, 2017 — Leave a comment

Mark F. Speakman, 60, Grove City, Ohio, was sentenced to 60 months in prison for an investment fraud scheme that defrauded his clients out of more than $1.1 million.

According to court documents, between 2000 and 2015, Speakman was a financial advisor at Ameriprise Financial, and between 2002 and 2015 he defrauded his clients by misappropriating their funds.

Speakman persuaded his clients to remove their funds from their Ameriprise Financial accounts and invest them in Centrax, a fraudulent real estate investment trust. Rather than investing the funds in real estate, he stole the money. He took $870,000 from seven victims for the real estate scheme and used the money to pay his own expenses.

For example, Speakman persuaded one victim to move $125,000 outside of her normal Ameriprise account and invest instead in Centrax. He did not invest the funds in Centrax, but instead used them for his personal benefit. The victim later developed terminal cancer, and she detailed her physical decline in emails to Speakman and instructed him to write checks to an estate-planning attorney and to a “local crematorium and burial society” where she was pre-purchasing cremation services.

The dying victim told Speakman she counted on the Centrax trust to avoid placing a burden on her family members when she died and intended to use her Centrax investment in order to pay off the mortgage on her home.

Because the Centrax trust did not in fact exist, Speakman convinced the victim not to liquidate her purported Centrax investment and upon her death tried to convince the victim’s family to do the same. When he could no longer postpone their wishes to liquidate, he avoided communication with the family altogether.

As part of his scheme to defraud, Speakman stole from others to avoid detection by a client he had previously defrauded. In 2014, one of his clients who had previously agreed to invest in Centrax told Speakman that he wanted to cash out his investment. Speakman had already misappropriated those funds and had no way to pack back his client.

As a result, Speakman convinced another client and three of his family members to invest in gold coins. Speakman did not invest in gold coins and instead diverted the money in order to pay back the previous victim.

In total, Speakman received nearly $1.2 million from others in furtherance of his fraudulent scheme.

In addition, Speakman filed a false federal income tax return with the IRS for the 2014 income tax year on which he omitted $275,000 in income generated by his illegal conduct. The total tax loss to the IRS for 2002 through 2014 was approximately $300,000.

Speakman pleaded guilty in December 2016 to one count each of wire fraud, money laundering and filing a false federal income tax return with the IRS. As part of his plea, he agreed to pay nearly $1.2 million in restitution to the victims of his investment fraud scheme and approximately $300,000 in restitution to the IRS.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Frank S. Turner II, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, and Grove City Police Chief Jeff Pearson announced the sentence handed down today by Senior U.S. District Judge James L. Graham.

“Mark Speakman committed a serious fraud that lasted more than a decade,” U.S. Attorney Glassman said. “He used his position as a financial advisor to take advantage of clients. Appallingly, he even lied about the final financial wishes of a client who was dying of cancer. The sentence he received today reflects the seriousness of his illegal actions.”

“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Frank S. Turner II, Acting Special Agent in Charge, Criminal Investigation, Cincinnati Field Office. “Today’s sentencing demonstrates how the IRS, U.S. Attorney’s Office, and the Grove City Police Department banded together to help put an end to the criminal behavior of Mr. Speakman who preyed on investors for his own personal financial gain.”

U.S. Attorney Glassman commended the investigation of this case by the IRS and the Grove City Police Department, and Assistant U.S. Attorney Peter K. Glenn-Applegate, who is prosecuting the case.

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Escrow Charged with Diverting Funds to Personal Account

Rachel Dollar —  April 10, 2017 — Leave a comment

Kimberlee E. Himmell, 62, Massillon, Ohio, is alleged to have defrauded financial institutions out of more than $2 million by having escrow funds on home purchases deposited into her personal account.  Himmell was charged with 18 counts of bank fraud and one count of theft of government funds.

Himmell owned and operated Netwide Title Agency, Inc., located at 3711 Lincoln Way East, Massillon, Ohio. General Title Insurance Company, located in Cleveland, Ohio, was Netwide’s underwriter and responsible for auditing Netwide, according to the information.

Netwide, at the direction of Himmell, began in 2007 instructing all lenders doing business with Netwide as a title agency and utilizing its escrow services to wire all incoming lending proceeds to Himmell’s personal account, instead of Netwide’s corporate account, according to the criminal information filed in the case.

Himmell then used the deposited funds for her own personal use and for Netwide’s operational expenses without disclosing to lenders that she was not holding the funds in escrow, as she represented she would, according to the information.

Himmell closed at least 19 real estate transactions in 2013 and 2014 wherein Netwide received escrow funds and failed to pay or release the funds to the prior owner’s pre-existing mortgage. This causes financial losses to lenders and/or sellers of homes in Richmond Heights, North Canton, Willowick, Concord, Strongsville, Newbury, Brunswick, Wadsworth, Medina, Painesville, Parma, Akron, Twinsburg, Brecksville and Millersburg, Ohio according to the information.

Netwide’s underwriter, General Title, was contractually obligated to make lenders whole. The loss to General Title as a result of Himmell’s conduct was at least $2,111,014, according to the information.

The case was announced by Acting U.S. Attorney David A. Sierleja. The case is being prosecuted by Assistant U.S. Attorney Mark S. Bennett following an investigation by the U.S. Department of Housing and Urban Development – Office of Inspector General, the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation.

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Ohio Loan Modification Fraud Sentences

Rachel Dollar —  April 10, 2017 — Leave a comment

Jason J. Keating, 38, Toledo, Ohio, was sentenced to nine years in prison and Christopher J. Howder, 40, Perrysburg, Ohio, was sentenced to seven years in prison in after  stealing more than $1.1 million from hundreds of people through a fraudulent loan-modification scheme,

Keating was ordered to pay $1.1 million in restitution while Howder was ordered to pay $561,000 in restitution.

Both pleaded guilty last year to charges of conspiracy to commit mail and wire fraud and multiple counts of mail fraud and wire fraud.

Keating and Howder worked at Making Home Affordable USA (MHAUSA) from 120 10th Street, Toledo, Ohio where Keating was self-described president and Howder was the self-described underwriting manager.

According to court documents filed in the case:

The company used various names but homeowners were told MHAUSA had a very high rate of success and that customers could achieve modified interest rates as low as 2 percent.

Prospective participants were told there was a flat fee for service, generally between $495 and $795. Participants were told to stop making monthly mortgage payments to their lenders and instead to pay a percentage of their mortgage to MHAUSA.

Participants were told MHAUSA would hold these payments in a “stimulus reserve” account to demonstrate the participants could reliably make payments, and that once the loans were modified, the money would be turned over to the lenders.

The money obtained through the fraud was spent on concessions at professional sports venues, restaurants, cash withdrawals, gentlemen’s clubs, a tanning salon, a Las Vegas hotel, a jewelry store and a lingerie store.

“These defendants took more than $1 million from people struggling to hold onto their homes,” said Acting U.S. Attorney David A. Sierleja for Ohio.

“They used money obtained through fraud to pay for expensive restaurants and vacations,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.

The investigating agency in this case is the Federal Bureau of Investigation and the Department of Housing and Urban Development – Office of Inspector General. The case was handled by Assistant United States Attorney Gene Crawford.

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Sharrock denied shortened prison sentence

A federal judge has rejected David R. Sharrock’s request to overturn or shorten his 135-month sentence for mortgage fraud, concealment of property and fraudulent transfer in a bankruptcy.

U.S. District Court Judge Donald C. Nugent issued a ruling saying he believes testimony given during a July 28 hearing in Cleveland where Sharrock’s attorney, James McDonnell, told the court the 73-year-old inmate never asked him to file an appeal after he plea no contest in September 2013.

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Ohio AG Sues Loan Modification Companies

Rachel Dollar —  August 14, 2015 — Leave a comment

The Ohio Attorney General brought a lawsuit against the operators of a California-based loan modification scheme accused of taking thousands of dollars from Ohioans while falsely promising to help them avoid foreclosure.

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