Archives For Pennsylvania

Women Sentenced For Fraudulent Gift Letters In Support of Mortgage Loan Applications

Stephanie Abbott —  July 12, 2023 — Leave a comment

Lee Ann Benninghoff, 45, Aliquippa, Pennsylvania, has been sentenced in federal court to one (1) day of imprisonment and three (3) years of supervised release on her conviction of bank fraud and conspiracy.

According to information presented to the court, Benninghoff owned and operated Complete Escrow and Bella Casa Realty. From February 2014 through March 2017, Benninghoff used her position and connections in real estate financing, and conspired with others in the industry, to submit fraudulent gift letters in support of mortgage loan applications. The gift letters misrepresented the source of the funds and their purported purpose.

United States Attorney Eric G. Olshan made the announcement today.

Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.

United States Attorney Olshan commended the Federal Housing Finance Agency Office of Inspector General, the U.S. Department of Housing and Urban Development Office of Inspector General, and the U.S. Secret Service for the investigation leading to the successful prosecution of Benninghoff.

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Realty Company Owner Pleads Guilty for Fraudulent Gift Letters

Stephanie Abbott —  March 16, 2023 — Leave a comment

Lee Ann Benninghoff,  44, Aliquippa, Pennsylvania, pleaded guilty in federal court to charges of bank fraud and conspiracy.

In connection with the guilty plea, the court was advised that Benninghoff owned and operated Complete Escrow and Bella Casa Realty. From February 2014 through March 2017, Benninghoff used her position and connections in real estate financing, and conspired with others in the industry, to submit fraudulent gift letters in support of mortgage loan applications The gift letters misrepresented the source of the funds and their purported purpose.

Benninghoff, pleaded guilty to two counts before United States District Judge Marilyn J. Horan.

Judge Horan scheduled sentencing for July 12, 2023, at 9 a.m. The law provides for a total sentence of not more than 30 years in prison, a fine of not more than $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Acting United States Attorney Troy Rivetti made the announcement.

Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.

The Federal Housing Finance Agency Office of Inspector General, the U.S. Department of Housing and Urban Development Office of Inspector General, and the U.S. Secret Service conducted the investigation that led to the prosecution of Benninghoff.

 

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Two Charged with Defrauding HUD Program

Stephanie Abbott —  October 21, 2021 — Leave a comment

J. Reed Pirain, 45, and Renee Vasilko, 48, Upper St. Clair, Pennsylvania, have been indicted by a federal grand jury in Pittsburgh, on conspiracy and fraud charges.

According to the Indictment, from in and around February 2018, until in and around March 2019, Pirain and Vasilko knowingly and willfully conspired to defraud the Department of Housing and Urban Development and falsified statements by bidding on and purchasing property as intended homeowners, only to renovate and the sell the property for profit.

More specifically, the Department of Housing and Urban Development’s Single Family Property Disposition Program allows individuals to purchase a home from HUD after a Federal Housing Administration loan forecloses. The program is designed to encourage ownership by families who intend to reside in the homes as owner/occupants by allowing those families to bid on the foreclosed properties before the process is opened up to real estate investors who merely intend to profit, short-term, by “flipping” the houses. Here, as alleged, Pirain and Vasilko, in an effort to jump the line ahead of other real estate investors, falsely certified on bidding forms that Vasilko intended to occupy the home as an owner/occupant, when, in fact, Pirain and Vasilko intended to flip the home for profit. This unlawful abuse of the Single Family Property Disposition program has two effects that frustrate the program’s purpose: first, it can allow real estate investors to potentially outbid families who otherwise would purchase the home and reside in the community and, second, it allows real estate investors to jump the line and bid on foreclosed homes before other investors are eligible.

The law provides for a term of imprisonment of not more than five years in prison, a fine not greater than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Acting United States Attorney Stephen R. Kaufman made the announcement today.

Assistant United States Attorney Benjamin J. Risacher is prosecuting this case on behalf of the government.

The Department of Housing and Urban Development-Office of the Inspector General conducted the investigation leading to the Indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

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Woman Sentenced for Real Estate Fraud

Stephanie Abbott —  October 30, 2020 — Leave a comment

Vontia Jones, 39, Philadelphia, Pennsylvania, was sentenced to eight and a half years in prison, three years of supervised release, and ordered to pay $2,319,278 in restitution for engaging in real estate fraud by purporting to sell properties to buyers using fraudulent documents and obtaining the personal identifying information of people and using that information to file more than 900 fraudulent tax returns with the IRS, netting her over $2,319,000 in fraudulent refunds.

The defendant pleaded guilty in August 2019 to more than 30 fraud charges, including conspiracy to make false claims to the IRS; making, and aiding and abetting the making of false claims to the IRS; wire fraud; and aggravated identity theft. Jones operated a business that she identified by various names including “Jones Tax Service,” “Earned Income Credit Unit,” “EIC Unit,” and “Eelysium,” out of her home in the 1400 block of West Cayuga Street, Philadelphia for a period of roughly seven years.

Jones also organized and operated a scheme to file phony deeds for multiple residential properties in Philadelphia, purporting to transfer ownership of the houses in order to sell them for a profit. The defendant would research homes on real estate websites, typically targeting those where the owner had died or moved away, and would charge several thousand dollars to sell someone else one of these houses that she “deeded up.”

Together with her co-conspirators, Jones solicited the personal information of individuals and their dependents under the guise of getting them “tax money,” even if they never worked. Jones designed flyers advertising her services that stated: “Don’t you deserve some income tax money too? $750 [per child] welfare social security unemployment disability even if you never had a job.” Each of the returns submitted to the IRS was submitted by the defendant or her conspirators as self-prepared, as if it had been done by the individual taxpayer whose information had been stolen.

Together, they filed or directed others to file over 900 fraudulent tax returns claiming fictious self-employment income resulting in tax refund payouts by the IRS of more $2,319,000.

United States Attorney William M. McSwain made the announcement.

In addition to the tax return scheme, “Jones’ greed impacted the lives of many hundreds of victims, and her shameful actions had severe consequences for these innocent people,” said U.S. Attorney McSwain. “Not only did she and her co-conspirators steal personal information in order steal tax return money from the government, but also she sold people’s houses right out from underneath them to other people who believed that they were buying property from her legitimately. For her actions, she will now spend the better part of a decade in prison.”

“The degree to which Vontia Jones and her co-conspirators went in order to perpetrate this scheme is astounding,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “Not only did Vontia Jones steal the identities of unwitting individuals, she also stole millions of dollars from the US government; and ultimately US taxpayers. Today, she stands a convicted felon who will spend years in federal prison.”

The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, and is being prosecuted by Assistant United States Attorney Anthony J. Wzorek.

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Real Estate Investment Fraudster Sentenced

Stephanie Abbott —  October 23, 2020 — Leave a comment

Dean Rossi, 55, Warrington, Pennsylvania, was sentenced to five years in prison, four years of supervised release, and was ordered to pay $2.85 million in restitution and $1.38 million in forfeiture for devising and participating in schemes to defraud three financial institutions out of millions of dollars.

Rossi was convicted at trial in March 2018 on seven charges: one count of conspiracy to commit mail fraud affecting a financial institution and bank fraud; one count of mail fraud affecting a financial institution; three counts of bank fraud; and two counts of loan fraud.

From at least December 2006 until about March 2012, Rossi and his co-conspirators participated in schemes to defraud Nova Bank, First Cornerstone Bank, and Leesport Bank, which later became VIST Financial Bank, out of more than $4.15 million in connection with multiple real estate closings for small residential properties in working class neighborhoods in the Philadelphia, Pennsylvania area. In each scheme, the defendant conspired with others to obtain fraudulent mortgage loans and made misrepresentations regarding the disbursement of those funds and his income. The defendant also falsified numerous documents, including tax returns and HUD-1 settlement sheets. Although the banks were able to mitigate some of their fraud losses, the banks and their insurers still suffered losses exceeding $2.85 million. Rossi personally pocketed a total of $1.38 million.

United States Attorney William M. McSwain made the announcement.

“The scope and duration of Rossi’s fraud are simply stunning,” said U.S. Attorney McSwain. “He stole millions of dollars from bank lenders and preyed upon residential neighborhoods – and then attempted to cover his tracks with lies. That sort of white collar crime deserves significant prison time, which is what Rossi has earned.”

“Dean Rossi lied on mortgage applications starting in 2006, his lies and greed helped to contribute to the financial meltdown in 2008,” observed Damon Wood, Inspector in Charge of the Philadelphia Division of the Postal Inspection Service.  “Over ten years later, after being found guilty at trial, he has finally been sentenced to five years in jail.  I want to thank the Postal Inspectors and the Assistant United States Attorneys who stayed with this case for nearly a decade.  The Postal Inspection Service has long history of investigating frauds schemes, and we will continue to lead and support investigations into fraud schemes that use the mail.”

The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorneys Mark Dubnoff and Elizabeth Ray.

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Man Pleads Guilty For His Role In Multi-Million Mortgage Fraud Scheme

Stephanie Abbott —  December 21, 2018 — Leave a comment

Kevin Morgan, 42, Pittsford, New York, pleaded guilty today to conspiracy to commit bank fraud, which carries a maximum penalty of five years in prison and a fine of $250,000.

Between March 2011 and June 2017, the defendant, along with co-defendants Todd Morgan, Frank Giacobbe, Patrick Ogiony, and others, conspired to defraud financial institutions, including UBS Securities LLC, Arbor Commercial Mortgage LLC, and Berkadia Commercial Mortgage, LLC. 

Kevin Morgan was employed as a Vice President at Morgan Management, LLC, a real estate management company that managed more than 100 multi-family properties.  Todd Morgan also was employed by Morgan Management as a Project Manager. Kevin and Todd Morgan worked with Frank Giacobbe, who owned and operated Aurora Capital Advisors, LLC, a mortgage brokerage company, and Patrick Ogiony, an Aurora employee, to secure financing for properties managed by Morgan Management or certain principals of Morgan Management.

Kevin Morgan and his co-defendants provided false information to financial institutions and government sponsored enterprises that overstated incomes of properties managed by Morgan Management or certain principals of Morgan Management. This resulted in the financial institutions issuing loans for larger amounts than the financial institutions would have authorized had they been provided with truthful information.

The defendants misled the financial institutions regarding the occupancy of properties. For example, Kevin Morgan: conspired to provide false rent rolls to lenders and appraisers on a variety of dates, overstating either the number of renters in a property and/or the rent paid by occupants; conspired to provide false and inflated income statements for the properties; and worked with others to deceive inspectors into believing that unoccupied apartments were, in fact, occupied.

In one such instance, Kevin Morgan and his co-defendants provided false information to Berkadia Commercial Mortgage, LLC, in connection with Rochester Village Apartments at Park Place, a multi-family residential community owned by certain Morgan Management principals. The false information included inflated income derived from storage unit rentals, inflated reports of rental income, and reporting apartment units as occupied before certificates of occupancy were obtained for those units.

In addition, Kevin Morgan and his co-defendants made misrepresentations to conceal from the lending financial institutions that Morgan Management used a portion of the loan proceeds for purposes other than that disclosed in the loan application. Loan funding was used to maintain or improve other properties managed by Morgan Management, and to satisfy debts associated with other properties managed by Morgan Management. For example, the defendants included a fictitious $2.5 million debt in a loan application purportedly owed to a Morgan Management controlled entity and created a fabricated payoff letter for that debt to increase the amount of the loan in connection with a property known as Autumn Ridge.

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

“History has shown us the havoc that can be wrought when fraud takes place in the mortgage industry,” noted U.S. Attorney Kennedy. “This investigation, and today’s plea, protect that industry from fraud and those who invest in securities which are backed by mortgages.”

“From day one, our investigation has focused on protecting the residential and commercial financing industry,” said Gary Loeffert, Special Agent-in-Charge of the FBI’s Buffalo Division. “With Kevin Morgan’s plea today, we have advanced our efforts to safeguard the tens of thousands of investors who own mortgage-backed securities.”

Robert Manchak, Acting Special Agent in Charge for the Northeast Region of the Federal Housing Finance Agency, Office of Inspector General, said, “The financing of multifamily loans is a significant segment of Fannie Mae’s and Freddie Mac’s portfolio.  As our commitment to this case demonstrates, FHFA-OIG will work with our partners in law enforcement to investigate and hold accountable those who subject the entities regulated by FHFA to fraud, waste, or abuse.”

Charges are pending against defendants Frank Giacobbe, Patrick Ogiony, and Todd Morgan. 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.

Today’s plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Federal Housing Finance Agency, Office of Inspector General, under the direction of Acting Special Agent-in-Charge Robert Manchak, Northeast Region.

Sentencing will be scheduled at a later date before Judge Wolford.

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Former Owner of Mortgage Company Ordered to Pay Restitution in Fraud Scheme

Stephanie Abbott —  December 6, 2018 — 1 Comment

David Fili, Jr., 48, Drexel Hill, Pennsylvania, was sentenced today to one day in jail and five years of supervised release, with the first 18 months of supervised release to be served on home confinement in multi-million dollar fraud scheme.

Along with George Barnard, 47, Newtown Square, Pennsylvania, Fili owned Capital Financial Mortgage Corporation (“CFMC”), based in Delaware County, Pennsylvania. Between 2005 and March 2013, Fili and Barnard issued refinance mortgage loans to customers of CFMC. Instead of using the money to pay off their customers’ outstanding first mortgages, however, they diverted $9,781,977 to themselves from bank accounts belonging to CFMC and several title companies owned by Barnard. Barnard was previously sentenced to five years in prison for his role in the scheme.

As part of his guilty plea, Fili admitted that he used much of the money he diverted to buy a vacation home and to support his gambling habit (while Barnard used the money he diverted to buy multi-million dollar beach homes in Avalon, New Jersey, several yachts, and to pay the salary of a yacht captain). At the time that the scheme fell apart in March 2013, Fili and Barnard left over two dozen CFMC customers stuck with two mortgages on their homes because CFMC had failed to pay off their customers’ existing first mortgages.

Fili was ordered to forfeit $1,969,312.02, and is jointly and severally liable to pay $9,567,074.56 in restitution.  Fili previously entered a guilty plea to ten counts of wire fraud and two counts of bank fraud.http://www.mortgagefraudblog.com/?s=David+Fili%2C+Jr.

U.S. Attorney William M. McSwain made the announcement.

“For many years, Fili defrauded honest, hard-working individuals out of their money so that he could gamble it away and relax in his illegally-obtained vacation home, “ said U.S. Attorney McSwain. “The defendant’s vacation ends now. We are thankful that the Court ordered him to pay millions of dollars as a result of his crimes.”

The case was investigated by the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.

 

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Man Gets 5 Years for Operating $13 Million Mortgage Fraud

Stephanie Abbott —  August 1, 2018 — Leave a comment

A suburban Philadelphia man who acknowledged orchestrating a $13 million mortgage fraud scheme for nearly a decade is headed to prison.A federal judge in Philadelphia sentenced George Barnard on Tuesday to five years. The 47-year-old Newtown Square resident pleaded guilty to multiple fraud counts in April.The U.S. attorney’s office says Barnard used the money from the scheme to buy yachts, luxury cars and beach homes.

Source: Man gets 5 years for operating $13 million mortgage fraud | News | phillytrib.com

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Five Companies and Two Individuals Sued in Mortgage Modification Scam

Stephanie Abbott —  July 26, 2018 — Leave a comment

Mark Goldstein and Drew Alia, Pennsylvania, and their five Pennsylvania mortgage foreclosure companies were sued today for deceiving consumers into signing contracts to have their mortgage loans modified and never delivering the services paid for.

Goldstein and Alia’s companies included GMK Solutions, the Foreclosure Law Center; Century Legal Group; Alia Law Group; and the Law Offices of Drew Alia.  Pennsylvania homeowners and other consumers wound up agreeing to pay the defendants more than $280,000 through their scam conducted between 2008 and 2015.

Here’s how the scam worked:

The defendants signed contracts with homeowners, promising to do a home loan audit and a mortgage modification – with the goal of lowering the consumer’s monthly mortgage payments or interest rate, or saving their home from foreclosure.

The defendants took cash deposits, often thousands of dollars, and then failed to produce the audits or mortgage modifications. To hide their scam, they told homeowners not to contact their mortgage lenders or make any payments because they were “handling” negotiations on the homeowners’ behalf.  When anxious consumers began to demand updates on the status of their loans, the defendants dodged their calls and offered no refunds.

During the scam, many homeowners received notices from their lenders stating that if they did not respond, their homes would be foreclosed upon or sold at sheriff’s sale.  In one instance, a consumer paid $3,500 up front for mortgage foreclosure services, and after the defendants assured the homeowner they had stopped the Sheriff’s sale, the home was lost anyway.

Another consumer from Delaware County called the Foreclosure Law Center for a loan modification to keep her home out of foreclosure, and paid a $700 deposit. The night before a sheriff’s sale, the defendants contacted the consumer and told her to file for bankruptcy to delay the sale. The bankruptcy filing was dismissed by the court. Ultimately, the defendants never delivered services or helped her and wouldn’t refund her deposit.

This consumer, Kathleen Zang, said: “The Foreclosure Law Center told me not to contact my mortgage company and they were handling everything on my behalf. I had to file for bankruptcy after I learned that communication was never made to keep my house — where my children and family lived. I was outraged after learning from my mortgage company that no one from the Foreclosure Law Center had been in touch with them. Other people lost their homes because of this company. I lost $700 — and I’m grateful to Attorney General Shapiro and his Bureau of Consumer Protection for stepping up for consumers like myself.”

The Office of Attorney General received 21 complaints from Pennsylvania consumers, and nearly 50 more from consumers across the country, who entered into mortgage modification contracts. In some cases, homeowners instructed by the scammers to not pay their mortgages ultimately lost their homes in sheriff’s sales.

Attorney General Josh Shapiro made the announcement.

“Defendants Mark Goldstein, Drew Alia and their companies preyed upon dozens of Pennsylvanians and other consumers who thought they were making a smart decision for their home and family,” Attorney General Shapiro said. “They wanted to lower their interest rates, modify their mortgages, and save their homes. Instead, all they received from these defendants were false promises and no services. Some even lost their homes.  This misleading scam was outrageous and I’m suing to get restitution for every person and hold these companies accountable.”

In addition to claims filed under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, the Attorney General’s lawsuit bases other claims against the defendants under the Pennsylvania Mortgage Licensing Act.

“If you believe you were victimized by defendants Goldstein, Alia or any of their companies, or any other false mortgage modification deal, call my office today or email us at scams@attorneygeneral.gov,” Attorney General Josh Shapiro said. “I want to hear from you, and we’ll seek justice and restitution for you.”

The lawsuit in the Philadelphia County Common Pleas Court seeks injunctive relief and restitution in excess of $280,000 total for all consumers who are currently or have ever been in a transaction with any of these companies or their affiliates.

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Deceptive “For-Sale-By-Owner” Home Scheme is Targeted for Elimination

Stephanie Abbott —  July 20, 2018 — Leave a comment

Harbour Portfolio Adviser, a Texas company, is being sued today for deceiving Pennsylvania consumers into unfair “for sale by owner” purchases of uninhabitable family homes. This scam involved misleading property deeds and preyed upon low-income homeowners who were sold homes at vastly inflated prices that often lack basic essentials like heat or electricity.

More than 70 would-be Pennsylvania homeowners entered into unfair “for sale by owner” purchases with Harbour Portfolio Advisers, and wound up agreeing to pay Harbour more than $2,600,000 plus 9.9 percent interest in transactions between 2010 to 2016.

Harbour and Charles A. Vose III, the founder of the company, perpetuated the scheme by persuading Pennsylvania consumers to buy homes at prices that were often three to four times more than Harbour had paid for the homes just days or weeks before, with no renovations or improvements. The homes sold by Harbour were usually run-down, sold without disclosure of defects, and often lacking basic essentials like heat, electricity or appliances.  Harbour purchased approximately 6,000 homes nationwide to use in this scheme; more than 100 of those properties are in Pennsylvania.

Here’s how the scam worked:

Harbour Portfolio bought up large numbers of financially distressed homes, usually in low-income neighborhoods. They flooded the neighborhoods with “For Sale by Owner” signs that attracted potential buyers. Utilities were turned off during house tours, masking major problems in the homes. The buyers, who lacked the experience to understand the complexities of buying a home, paid large, non-refundable deposits, and signed “Agreement for Deed” papers that looked like conventional mortgages, but were not. Hidden in the paperwork were clauses allowing Harbour to demand payment of the full amount owed plus 9.9 percent interest if the buyer missed a single payment. Buyers lost all rights in the home if they missed a single payment.

Harbour was also collecting interest on the home loans at almost twice the maximum rate permitted by Pennsylvania law for this type of transaction.

Attorney General Josh Shapiro made the announcement.

“Harbour Portfolio Advisors victimized at least 70 Pennsylvanians who thought they were buying habitable homes for themselves and their families,” Attorney General Shapiro said. “These scammers exploited the fact that many of the buyers were low-income consumers who may not have understood the complicated process of buying a home. Instead, they got subpar homes and misleading deeds. This conduct is reprehensible and I’m suing Harbour to stop it.”

In addition to claims filed under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, the Attorney General’s lawsuit bases other claims against Harbour Portfolio under the state’s Land Installment Contract law and state usury laws as well.

“If you believe you have been victimized by Harbour Portfolio or its affiliates, or any other ‘for sale by owner’ transaction, call my office today or email us at scams@attorneygeneral.gov,” Attorney General Josh Shapiro said. “I want to hear from you, and we’ll seek justice and restitution for you.”

The lawsuit as filed in the Allegheny County Common Pleas Court seeks injunctive relief and restitution for all Pennsylvanians who are currently or have ever been in a “for sale by owner” transaction with Harbour Portfolio or its affiliates.

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