Archives For Pennsylvania

Terrell Hampton, 37, was sentenced today to 119 months in prison for defrauding the City of Philadelphia, the Commonwealth of Pennsylvania, and innocent owners and purchasers of Philadelphia, Pennsylvania real estate.

Terrell Hampton, along with his father Kenneth Hampton and other family members, stole vacant homes in Philadelphia, Pennsylvania that belonged to people who could not afford to defend their properties. Kenneth Hampton was convicted and sentenced to 200 months in prison in November.

At the direction of his father, who was in prison at the time, Terrell looked for vacant properties to target, created and filed fraudulent deeds, sought buyers for the stolen properties, and kept Kenneth apprised of scheme developments. They communicated through phone calls, emails, and letters, as well as through Kenneth’s fiancée, co-conspirator Roxanne Mason.

The participants in the scheme moved into the stolen properties under the cover of fake leases that purported to grant them the right to occupancy.  They then found ways to profit from the stolen properties, either by selling the homes to good faith purchasers, by saddling them with debt, or by taking advantage of government programs designed to aid legitimate homeowners.

The announcement was made by U.S. Attorney William M. McSwain.

This defendant stole from people who didn’t have the resources to fight back, often resulting in victim battling against victim, homeowner against good faith purchaser,” said U.S. Attorney McSwain. “He lived up to the low example set by his father, and I am proud that the talented case team has put both of them behind bars.”

The case was investigated by the United States Secret Service, Department of Homeland Security – Office of the Inspector General, Federal Bureau of Investigation, and the Office of the Inspector General, City of Philadelphia.  The case was prosecuted by Assistant United States Attorneys Paul G. Shapiro and Sarah M. Wolfe

Dean Rossi, 49, Warrington, Pennsylvania, was found guilty by a federal jury yesterday of bank, mail and loan fraud in connection with a mortgage scheme.

Rossi, who owned numerous low-income properties throughout the Philadelphia area, misappropriated more than $643,000 from real estate closings. Specifically, after obtaining bank loans to purchase or refinance residential properties, Rossi teamed up with corrupt title/closing agents to divert a substantial portion of the loan proceeds, and then he pocketed cash from the settlements which should have been used to pay off prior mortgages and tax liens. In addition, to prevent the scheme from being detected, Rossi continued to cause payments to be made on the prior existing mortgages years after those loans were supposed to have been paid in full.

Rossi faces a maximum possible sentence of 120 years’ imprisonment, five years of supervised release, and a $4 million fine.

The announcement was made by U.S. Attorney William M. McSwain.

Our investigators and trial team did a phenomenal job of following a trail of evidence that goes back more than a decade,” said U.S. Attorney McSwain. “The defendant went to great lengths to cover his tracks, but due to the hard work of our agents and prosecutors, his long-running scheme was exposed.”

The case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Joel Goldstein.

James Nassida, IV, 50, West Mifflin, Pennsylvania, was sentenced in federal court to 78 months of incarceration on his conviction of conspiracy to commit bank fraud, wire fraud, and mail fraud.

According to information presented to the court, Nassida owned and operated a mortgage broker business called Century III Home Equity (Century III), which assisted borrowers in obtaining loans collateralized by real estate. At the time of the events at issue, which was between 2002 and 2008, Century III was one of the largest mortgage broker businesses in the Western District of Pennsylvania, and during the course of that timeframe brokered hundreds of millions of dollars worth of loans using more than a dozen different lenders. Many of those loans, however, involved one or more aspects of fraud.

Some of the aspect of the fraud included the following:

  • Appraisals that fraudulently inflated the true value of the properties;
  • Settlement statements that falsely reflected that the borrowers made substantial payments associated with the purchases of real estate;
  • Settlement statements that failed to disclose secondary financing;
  • Settlement statements that failed to include cash payments charged by Century III and paid by the borrowers;
  • Settlement statements and closing documents that were backdated to reflect that the settlements had occurred on a date prior to the actual settlement date; and
  • Various loan documents, including loan approval forms, good faith estimates, and underwriting transmittal forms, that failed to disclose secondary financing and falsely represented the combined loan to value ratio

The fraud also involved misrepresentations to some of the borrowers to induce them to enter into the transactions, including concealing the fees Century III received from lenders for the borrowers’ transactions and the impact of those fees on the borrowers’ interest rates; and concealing the nature of the mortgage products, including that some of the mortgage products could negatively amortize. Lastly, the fraud also involved Nassida’s receipt of kickbacks from the settlement company that he failed to disclose to the borrowers and lenders, as required.

Nassida also submitted multiple fraudulent documents associated with loans in which he served as a loan officer, but also that the loan officers working under his direction regularly submitted false information to lenders and borrowers. In addition, Nassida caused the submission of fake documents to the lender in connection with his purchase of a $300,000 vacation home near Seven Springs, including the following: (1) a settlement statement that overstated the sales price; (2) a loan application that falsely stated his income and assets; and (3) fake statements from an investment company that falsely verified that he had more than $600,000 in investments when he really had about $15,000. In the loan application, James Nassida reported that he earned approximately $980,000 in 2006, but he did not even file his tax returns in 2006, and his reported taxable income in 2004 and 2005 was not even close to that figure.

This case was a breeding ground for many of the other investigations led by the Western Pennsylvania Mortgage Fraud Task Force,” said FBI Special Agent in Charge Robert Johnson. “Mortgage fraud cases are a priority for the FBI because mortgage lending and the housing market have such a significant effect on the overall economy. At the time of this case, James Nassida was living a fancy lifestyle, in a million dollar home, taking money from victims who put their trust in him. That is why today’s sentencing is significant. Since the task force formation in February, 2008, more than 100 people were charged and more than a half billion dollars in fraudulent loans were uncovered,” added SAC Johnson.

United States Attorney Scott W. Brady announced the sentence.  Assistant United States Attorneys Brendan T. Conway and Cindy Chung prosecuted this case on behalf of the government. Senior United States District Judge Donetta Ambrose imposed the sentence.

United States Attorney Brady commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of Nassida. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff’s Office; the Allegheny County District Attorney’s Office; the Pennsylvania Attorney General’s Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee’s Office.

Ignacio Beato, 46, Hazleton, Pennsylvania, was sentenced by United States District Court Judge James M. Munley to 51 months’ imprisonment, followed by three months supervised release for conspiracy to engage in monetary transactions through a financial institution, with funds that were the proceeds of wire fraud.

According to United States Attorney Bruce D. Brandler, Beato, who was a licensed realtor, falsely represented to potential purchasers that he was authorized to sell vacant conventional and Federal Housing Administration insured mortgaged properties in Hazleton, when in fact, he did not have such authority. Between December 2013 and March 2015, Beato accepted $751,082 from individuals who believed they were purchasing properties.  Beato then fraudulently converted that money to his own personal use.

Judge Munley ordered Beato to pay restitution in the amount of $65,000. The reduced restitution amount was due to a number of factors including the fact that some victims were not able to be located and others have filed civil lawsuits attempting to regain their funds. The Internal Revenue Service also previously forfeited $35,000 from Beato’s bank accounts.

The case was investigated by the Internal Revenue Service, Criminal Investigations, the Housing and Urban Development Office of the Inspector General, the Department of Homeland Security, the Pennsylvania State Police, and the Luzerne County District Attorney’s Office.  Assistant U.S. Attorney Jenny P. Roberts prosecuted the case.

Zaki M. Bey, 39, Philadelphia, Pennsylvania, was sentenced to 60 months in prison. Bey previously pleaded guilty to one count of conspiracy to commit loan and bank fraud, one count of conspiracy to defraud the Internal Revenue Service, and one count of conspiracy to commit wire fraud.

According to court documents, Bey conspired with others to prepare and submit fraudulent mortgage applications to banks and lending institutions.  In 2007 and 2008, Bey successfully secured more than $2 million in residential loans on at least thirteen properties located in the Germantown section of Philadelphia and in New Jersey.  Bey and others created fraudulent loan applications on behalf of straw buyers that contained materially false information as to the straw buyers’ income, assets, and intent to occupy the residences.  Bey also furnished fraudulent records such as payroll account documents, paystubs, and financial statements to defraud financial institutions and lenders.  Bey’s company at the time, Natural Home Builders, was able to receive a payout for purported construction expenses ranging from $17,864.26 to $60,000 at the closing of each settlement.  Bey was not completing any construction on these properties, and obtained total settlement proceeds for construction costs of $435,074.26.

In late 2010 and early 2011, Bey filed fraudulent personal income tax returns for tax years 2007, 2008, 2009 and 2010.  Bey filed these tax returns claiming false tax withholding payments and false Forms 1099-OID (“Original Issue Discount”) income for his company, Natural Home Builders.  Bey attempted to receive total tax refunds from the IRS in the amount of $1,141,677.  Bey was only successful in receiving $148,296 from the IRS based on the fraudulent 2009 tax return he submitted.   After assessed a tax deficiency by the IRS, Bey mailed checks to the IRS from a closed bank account in an attempt to repay the fraudulent tax refund.

Beginning in 2010 to 2013, Bey engaged in a wire fraud conspiracy involving the submission of fraudulent auto loan applications.  Bey furnished fraudulent records such as payroll account documents, paystubs and financial statements to defraud automobile dealerships located in Philadelphia and New Jersey.  The false loan applications and fraudulent records caused the automobile dealerships to electronically submit false information to financial institutions and lenders.  Through the use of straw buyers, Bey was able to obtain at least 7 automobiles.

In addition to Bey’s 60 month prison sentence, he will also be required to serve 3 years’ supervised release and pay back $705,528.22 in restitution to multiple financial institutions and the Internal Revenue Service.

The sentence was announced by Acting United States Attorney for the Eastern District of Pennsylvania Louis D. Lappen.  The case was investigated by the Internal Revenue Service, Criminal Investigation.  It was prosecuted by Assistant United States Attorney James Pavlock.

Ralph Christopher Cirino was indicted in the Eastern District of Pennsylvania on six counts of mail fraud, four counts of misrepresentation of a social security number, four counts of wire fraud, two counts of making false statements in mortgage loan applications and one count of unlawful possession of authentication feature.

According to the indictment, Cirino falsely reported to the Pennsylvania Department of Labor that two corporations, Fast Care Home Care P.C. and Juris Clarity were legitimate corporations with multiple employees earning wages in 2015 and 2016.  In fact, these companies did not conduct any business, have employees or pay wages and the employees were fictitious.  Cirino sought to obtain unemployment benefits by purporting to be several of the fictitious employees and by submitted unemployment claims on behalf of those fictitious employees and on his own behalf. On of the fictitious employee names identified in the indictment is Benjamin Hunt.

The indictment alleges that Cirino made false statements to American Internet Mortgage, Inc. and Fairway Independent Mortgage Corporation for the purpose of influencing the actions of the mortgage companies on loans.  He caused loan applications containing knowing false statements to be submitted including an application in December 2016 to AIM falsely stating the applicant’s name was Benjamin Hunt, he was employed by Fast Care and earned a weekly salary of $1,960 and an application in March 2017 to Fairway falsely stating the applicant’s name was Benjamin Hunt, he was employed by Fastcare and earned a monthly salary of $9,880.

The indictment also seeks forfeiture of $87,259.

Eugene Peter Kenworthy, Jr., 50, appraiser, Ambler, Pennsylvania, was charged by Indictment with wire fraud, false statements for the purpose of influencing the Federal Housing Administration, aggravated identity theft, and failure to file a tax return.

The indictment alleges that, beginning as early as 1993, Kenworthy worked at Tech Review LTD, a real estate appraisal company owned by Kenworthy’s father.  Kenworthy began managing Tech Review after his father’s death in 2003 and sold the company in 2012 after which he formed two other companies, Global Appraisal Management and East Coast Appraisal Management.

According to the indictment, from March 2010 to February 2016, Kenworthy appraised approximately 714 properties which were the subject of HECM loan applications.  Kenworthy used the electronic signatures of five certified appraisers without their knowledge and consent to certify approximately 294 of those appraisals reports.  Those appraisers did not appraise the properties or write the reports.  Kenworthy used his own signature to certify the other approximately 420 appraisal reports he wrote. Most of the appraisals were for a single mortgage broker/origination company which paid Kenworthy about $450 per appraisal.

Also according to the indictment, Kenworthy made false statements in some of the HECM appraisal reports which resulted in falsely inflated valuations for the properties and, fraudulently inflated the HECM loan amounts. The indictment details several of these transactions.

As of July 2017, of the 714 properties for which Kenworthy wrote an appraisal report for a HECM, FHA had paid 53 claims totaling almost $3.7 million on foreclosed properties where the sales price of the home was insufficient to cover the HECM loan.

Kenworthy was added to the FHA appraiser roster in 1999 and, in or about January 2016, HUD suspended Kenworthy, barring him from performing FHA appraisals.

If convicted the defendant faces a maximum possible sentence is 166 years’ imprisonment, five years of supervised release, a $5,050,000 fine, and a $1,000 special assessment

The indictment was announced Acting United States Attorney Louis Lappen. The case was investigated by the United States Department of Housing and Urban Development – Office of Inspector General and the Internal Revenue Service – Criminal Investigation, and is being prosecuted by Assistant United States Attorney Karen L. Grigsby.

James Nassida, 49, West Mifflin, Pennsylvania, pleaded guilty to one count of bank and wire fraud conspiracy before Senior United States District Judge Donetta Ambrose.

In connection with the guilty plea, the court was advised that Nassida owned operated a mortgage brokerage business called Century III Home Equity (Century III), which assisted borrowers in obtaining loans collateralized by real estate. At the time of the events at issue, which was between 2002 and 2008, Century III was one of the largest mortgage broker businesses in the Western District of Pennsylvania, and during the course of that timeframe brokered hundreds of millions of dollars worth of loans using more than a dozen different lenders. Many of those loans, however, involved one or more aspects.

Some of the aspects of the fraud included the following:

  • Appraisals that fraudulently inflated the true value of the properties;
  • Settlement statements that falsely reflected that the borrowers made substantial payments associated with the purchases of real estate;
  • Settlement statements that failed to disclose secondary financing;
  • Settlement statements that failed to include cash payments charged by Century III and paid by the borrowers;
  • Settlement statements and closing documents that were backdated to reflect that the settlements had occurred on a date prior to the actual settlement date; and
  • Various loan documents, including loan approval forms, good faith estimates, and underwriting transmittal forms, that failed to disclose secondary financing and falsely represented the combined loan-to-value ratio.

The fraud also involved misrepresentations to some of the borrowers to induce them to enter into the transactions, including concealing the fees Century III received from lenders for the borrowers’ transactions and the impact of those fees on the borrowers’ interest rates; and concealing the nature of the mortgage products, including that some of the mortgage products could negatively amortize. Lastly, the fraud also involved James Nassida’s receipt of kickbacks from the settlement company that he failed to disclose to the borrowers and lenders, as required.

James Nassida submitted multiple fraudulent documents associated with loans in which he served as a loan officer. In addition, loan officers working under his direction regularly submitted false information to lenders and borrowers. Nassida also caused the submission of fake documents to the lender in connection with his purchase of a $300,000 vacation home near Seven Springs, including the following: (1) a settlement statement that overstated the sales price; (2) a loan application that falsely stated his income and assets; and (3) fake statements from an investment company that falsely verified that he had more than $600,000 in investment when he really had about $15,000. In the loan application, James Nassida reported that he earned approximately $980,000 in 2006, but he did not even file his tax returns in 2006, and his reported taxable income in 2004 and 2005 was not even close to that figure.

Judge Ambrose scheduled sentencing for January 10, 2018. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the and the prior criminal history, if any, of the defendant.

The plea was announced by Acting United States Attorney Soo C. Song.

Ignacio Beato, 46, Hazleton, Pennsylvania, pled guilty before United States District Judge James M. Munley to conspiracy to engage in monetary transactions through a financial institution, with funds that were the proceeds of wire fraud. Beato is scheduled to be sentenced on August 31, 2017.

Beato, who was a licensed real estate agent, falsely represented to potential purchasers that he was authorized to sell vacant conventional and Federal Housing Administration insured mortgaged properties in Hazleton, Pennsylvania, when in fact, he did not have such authority. Between December 2013 and March 2015, Beato accepted $751,082 from individuals who believed they were purchasing properties. Beato then fraudulently converted that money to his own personal use.

The guilty plea was announced by United States Attorney Bruce D. Brandler of the United States Attorney’s Office for the Middle District of Pennsylvania. The case was investigated by the Internal Revenue Service, the Housing and Urban Development Office of the Inspector General, the Department of Homeland Security, the Pennsylvania State Police, and the Luzerne County District Attorney’s Office. Assistant U.S. Attorney Jenny P. Roberts is prosecuting the case.

Drew Alia, 40, Philadelphia, Pennsylvania, attorney, was sentenced to a 12 month and 1 day term of imprisonment for willfully failing to file federal income tax returns for tax years 2010 through 2013 . Alia operated a home mortgage rescue service that was designed to assist home owners who were facing foreclosure.

During the sentencing hearing before United States District Court Judge Paul Diamond, the Court noted that Alia had received approximately $1.6 million in gross income. Alia was charged, by Information, with four counts of failing to file returns resulting in a tax loss of $127,037. In addition to a term of imprisonment, Judge Diamond also ordered Alia to pay restitution to the Internal Revenue Service for the tax loss he caused after he is released from prison.

The sentenced was announced Acting United States Attorney Louis D. Lappen.  The case was investigated by Internal Revenue Service’s Criminal Investigation Division and was prosecuted by Assistant United States Attorney Floyd J. Miller.