Archives For Short Sale Fraud

Anthony Garvin, 49, Jersey City, New Jersey was charged in a superseding indictment returned June 25, 2019 for his role in running a large-scale mortgage fraud scheme that involved properties in Jersey City, Union, and elsewhere in New Jersey and caused losses of millions of dollars.

According to the documents filed in this case:

From January 2011 through November 2017, Garvin and others engineered fraudulent short sale “flips” of various New Jersey properties with mortgages that were in default, and also fraudulently obtained numerous home equity lines of credit, or “HELOC” loans, using fraudulent documents and information.

The conspirators allegedly arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.

In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. The second transaction frequently closed for significantly more or even double the price of the first transaction.

Garvin and others allegedly rigged the short sale process at each step to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud. The conspirators used various kinds of phony documents and misrepresentations, including generating false pre-approval letters from a New Jersey corporation controlled by a conspirator and generating phony deeds that backdated the closing date of the first transactions.

To obtain HELOC loans, the conspirators allegedly submitted loan applications in the name of straw borrowers, who did not in fact reside at the subject properties, and used false and fraudulent information – including false pay stubs and tax information – to make it appear as though the straw borrowers made more money than they actually did. The conspirators frequently applied for multiple HELOC loans on the same property nearly contemporaneously, withholding from each lender the existence of other applications.

The conspirators then disbursed the funds received from financial institutions – which totaled millions of dollars – into various accounts they controlled to conceal their illegal activities and split the profits.

The count of conspiracy to commit bank fraud and each substantive count of bank fraud are each punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.

Garvin was charged with one count of bank fraud conspiracy and five counts of bank fraud. Garvin was originally indicted on one count of bank fraud conspiracy and one count of bank fraud on January 11, 2019.

U.S. Attorney Craig Carpenito made the announcement today.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation leading to the superseding indictment.

The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater of the U.S. Attorney’s Office in Newark.

The charges and allegations in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Defense counsel: Murdoch Walker II Esq., Atlanta, Georgia; Charles D. Dawkins Jr. Esq., Elizabeth, New Jersey.

 

Steve Young Kang, a/k/a “Steven Young Kang and “Young Tae Kang,” 64, Ridgefield, New Jersey, and Young Jin Son, a/k/a “Joshua Son,” 49, Norwood, New Jersey, pleaded guilty today for their respective roles in a scheme to defraud financial institutions and others.

According to documents filed in these cases and statements made in court:

Kang, Son and others fraudulently induced mortgage lenders to participate in “short sale” transactions. In a typical short sale transactions, a financial institution agrees to allow a house owner in financial distress to sell his or her home for less than they owe on their mortgages. Such transactions are called short sales because the market value of the house is less than the amount owed by the house owner and the lender agrees to accept a payment “short” of the amount owed by the house owner.

Kang, a real estate broker and agent, admitted to a scheme in which, from June 2013 to January 2017, he sold his own properties and recruited others to sell properties in short sales to a co-schemer, Mehdi Kassai, who was able to obtain the properties for substantially less than the properties were actually worth through false documents, straw buyers, cosmetic damage to properties, and restricting the ability of others to bid on and buy those properties. Kassai then sold many of those properties to third-parties at a substantial profit. Kang defrauded financial institutions and others of $2.7 million in this manner.

Son, a real estate broker and agent, admitted recruiting others to sell properties in short sales to Kassai, who obtained the properties for substantially less than they were actually worth through false documents, straw buyers, cosmetic damage to properties, and restricting the ability of others to bid and buy those properties. Kassai sold many of those properties to third-parties at a substantial profit. Son defrauded financial institutions and others of $1.9 million in this manner.

The bank fraud and wire fraud charges each carry a maximum potential statutory penalties of 30 years in prison and a $1 million fine. Kang and Son have both agreed to forfeit the proceeds of the scheme. Sentencing for both defendants is scheduled for Oct. 1, 2019. Kassai previously pleaded guilty to his role in the scheme and is awaiting sentencing.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited the Bergen County Prosecutor’s Office, under the direction of Prosecutor Mark Musella; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge, Robert Manchak; and special agents of the U.S. Department of Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to the guilty pleas.

The government is represented by Senior Trial Counsel Andrew Leven of the Healthcare & Government Fraud Unit of the U.S. Attorney’s Office, District of New Jersey, and Special Assistant U.S. Attorneys Charlie Divine and Kevin Di Gregory of the Federal Housing Finance Agency, Office of Inspector General.

 

David John Dziedzic, 55, Scottsdale, Arizona, was sentenced on December 17, 2018 to 30 months’ imprisonment for his lead role in criminal activity related to the short sale of distressed mortgages, some of which were federally-insured.

Dziedzic operated the “Housing Angels” program through his company, Real Core Realty, LLC.  He aggressively marketed a program designed to help homeowners stay in their homes following a short sale, through an undisclosed sale-leaseback program with “angel” investors.   Through this program, he typically received commissions from both the buyer and the seller in a short sale transaction. Dziedzic also recorded false secondary liens on more than 100 short sale properties to induce banks holding primary mortgages to pay off the false secondary mortgages, resulting in more than $100,000 in illegal profits as a result of the scheme.

Dziedzic’s wife, Heather Hamilton Dziedzic, 43, pleaded guilty to a related misdemeanor charge, and was also sentenced for her role in the offense.  She will also surrender her real estate license.  She received a two-year term of probation and a deferred disposition on a felony securities charge, which may be dismissed upon successful completion of the probationary term.

Dziedzic had previously pleaded guilty to one count of communication of unregistered securities, and a separate count involving the failure to notify the Treasury Department of his collection of more than $10,000 in cash from a real estate customer.  

As part of the sentence, Dziedzic must give up his real estate license.  He paid $107,280 in restitution for the actual loss caused when 40 banks paid out on the false liens, and he was also ordered to pay a money judgment of $142,000 over time, in order to disgorge additional profits.  As part of the plea agreement, Dziedzic, a Canadian national who naturalized as a U.S. citizen during the investigation, agreed to cooperate in his denaturalization, because he had failed to disclose the existence of the investigation to U.S. Citizenship and Immigration Services during the naturalization process.

The investigation in this case was conducted by Internal Revenue Service – Criminal Investigation; the 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. The prosecution was handled by Gary M. Restaino and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

 

Christopher Goodson, 45, Newark, New Jersey, an attorney,  admitted today to running a large-scale mortgage fraud scheme that involved properties in Jersey City, Clifton, Union, and elsewhere in New Jersey and caused losses of millions of dollars.

Goodson pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of conspiracy to commit bank fraud.

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

From January 2011 through August 2017, Goodson, his co-defendant, Anthony Garvin, and others engaged in a short sale mortgage fraud conspiracy targeting various New Jersey properties with mortgages that were in default.   http://www.mortgagefraudblog.com/?s=Christopher+Goodson

The conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.

In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.

Goodson admitted that he, Garvin, and others rigged the short sale process at each step in order to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud.

For instance, Goodson concealed the fact that he played multiple roles in the short sale transactions, including allegedly generating false pre-approval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California. These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales.

Garvin was a real estate agent and investor who allegedly coordinated fraudulent transactions as part of the scheme. The charge against him remains pending; he is considered innocent unless and until proven guilty.

The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits. In total, the conspiracy defrauded financial institutions out of millions of dollars.

The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for January 29, 2019.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory Ehrie in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation

The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater, Executive Assistant to the U.S. Attorney, in Newark.

Defense counsel: John C. Whipple Esq., Morristown, New Jersey

 

Hasan Hussain, 57, Princeton, New Jersey, who was previously convicted in federal court and incarcerated for masterminding a real estate fraud scheme, pleaded guilty on Friday to charges that he again conspired to defraud financially distressed homeowners, investors, and financial institutions of fees, rental income, mortgage payment funds, property ownership and/or proceeds from the sale of their properties.

At the time of his guilty plea to the most recent federal indictment, Hussain admitted to using various business entities to trick distressed property owners, who were seeking loan modifications, into paying him fees, moving out of their homes, and selling their homes in short sale transactions.  As part of the plea, Hussain further admitted that he convinced lenders to agree to artificially low sale prices for the distressed property owners’ homes by directing other individuals to damage the properties prior to the short sales. Thereby, Hussain, or individuals or businesses associated with him, acquired the properties at reduced prices, and then flipped them to investors at much higher prices.  During his change of plea, Hussain admitted that these investors were defrauded of their funds, or good credit, or both when they agreed to purchase properties from Hussain.

Hussain further admitted that he assisted investors to acquire federally backed mortgages through fraudulent applications, ultimately resulting in losses to the lenders or the Federal Housing Administration.  Some of the tactics employed by Hussain as part of the scheme included misuse of identities and cutting and pasting signatures on property deeds and financial documents.

As part of his plea agreement, Hussain admitted that his scheme resulted in losses between $550,000 and $1.5 million dollars; that ten or more victims were harmed; and that at least some of his victims were particularly vulnerable, as a result of their personal situation.  The plea agreement also provided that the government would seek a leadership enhancement for Hussain given the extensive nature of the scheme and his role in it.

Hussain also pled guilty to aggravated identity theft in connection with the scheme.

At sentencing on January 8, 2018, Hussain faces up to 32 years in federal prison, 5 years of supervised release, and a fine of $1,250,000.

A co-defendant in this matter, Ricardo Abreu, who pled guilty earlier this year is scheduled to be sentenced on October 30, 2018.

Hussain’s guilty plea before U.S. District Court Judge John J. McConnell, Jr., is announced by United States Attorney Stephen G. Dambruch; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General; Brian Deck, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; Harold H. Shaw, Special Agent in Charge of the Boston Division of the FBI; and Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police.

The case is being prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and Richard B. Myrus.

Greisy Jimenez, 50, Methuen, Massachusetts, a real estate broker, was sentenced today in connection with a sweeping conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in Merrimack Valley, Massachusetts.

Three co-conspirators involved in the scheme have been sentenced after pleading guilty to conspiracy to commit bank fraud. In June 2018, Jasmin Polanco, 37, Methuen, Massachusetts, a real estate closing attorney, was sentenced to 15 months in prison, three years of supervised release and ordered to pay $1,224,489 in restitution. In May 2018, Vanessa Ricci, 41, Methuen, Massachusetts, a mortgage loan officer, was sentenced to six months in prison, three years of supervised release and ordered to pay restitution of $963,730. In March 2017, Hyacinth Bellerose, 51, Dunstable, Massachusetts, a real estate closing attorney, was sentenced to time served and one year of supervised release to be served in home detention. http://www.mortgagefraudblog.com/?s=Greisy+Jimenez

The charges arose out of a scheme to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen, Massachusetts in which the purported sellers remained in their homes with their debt substantially reduced. A short sale is a sale of real estate for less than the value of any existing mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender. Generally, the lender absorbs a loss on the loan and releases the borrower from the unpaid balance. By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.

The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater” with homes worth less than the mortgage debt they owed. As part of the scheme, Jimenez, Polanco, Ricci, Bellerose and others submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales, thereby releasing the purported sellers from their unpaid mortgage debts, while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in their homes, with their debt substantially reduced.

The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties; in fact, the buyers and sellers were frequently related, and the sellers retained control of (and frequently continued to live in) the properties after the sale. The conspirators also submitted phony earnings statements in support of loan applications that were submitted to banks in order to obtain new financing for the purported sales. In addition, the defendants submitted phony “HUD-1 Settlement Statements” to banks that did not accurately reflect the disbursement of funds in the transactions. HUD-1 Settlement Statements are standard forms that are used to document the flow of funds in real estate transactions. They are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.

Jimenez was sentenced by U.S. Senior District Court Judge Mark L. Wolf, to three years in prison, four years of supervised release, and ordered to pay a fine of $12,500. The court will determine issues of restitution and forfeiture on Aug. 29, 2018. In January 2018, Jimenez pleaded guilty to two counts of bank fraud and one count of conspiracy to commit bank fraud.

United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program, made the announcement. Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit, and Assistant U.S. Attorneys Sara Miron Bloom and Victor A. Wild, also of the Economic Crimes Unit, prosecuted the cases.

Jasmin Polanco, 37, Methuen, Massachusetts, a real estate attorney was sentenced today in connection with a sweeping conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in Merrimack Valley, Massachusetts.

Co-defendants Vanessa Ricci, 41, Methuen, Massachusetts , a  mortgage loan officer, pleaded guilty in March 2018 to one count of conspiracy to commit bank fraud and was sentenced to six months in prison, three years of supervised release and ordered to pay restitution of $963,730 http://www.mortgagefraudblog.com/?s=Jasmin+Polanco; Greisy Jimenez, 50, Methuen, Massachusetts , a real estate broker, pleaded guilty to two counts of bank fraud and one count of conspiracy to commit bank fraud and is awaiting sentencing; Hyacinth Bellerose, 51, Dunstable, Massachusetts,  a real estate closing attorney, was sentenced in March 2017 to time served and one year of supervised release to be served in home detention after pleading guilty to conspiracy to commit bank fraud.  Polanco was sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to 15 months in prison, three year of supervised release and ordered to pay $1,224,489 in restitution. In March 2018, Polanco pleaded guilty to one count of conspiracy to commit bank fraud.

The charges arose out of a scheme to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen, Massachusetts, in which the purported sellers remained in their homes with their debt substantially reduced. A short sale is a sale of real estate for less than the value of any existing mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender. Generally, the lender absorbs a loss on the loan and releases the borrower from the unpaid balance. By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.

The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater” with homes worth less than the mortgage debt they owed. As part of the scheme, Polanco, Jimenez, Ricci, Bellerose and others submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales, thereby releasing the purported sellers from their unpaid mortgage debts, while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in their homes, with their debt substantially reduced.

The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties; in fact, the buyers and sellers were frequently related, and the sellers retained control of (and frequently continued to live in) the properties after the sale. The conspirators also submitted phony earnings statements in support of loan applications that were submitted to banks in order to obtain new financing for the purported sales. In addition, the defendants submitted phony “HUD-1 Settlement Statements” to banks that did not accurately reflect the disbursement of funds in the transactions. (HUD-1 Settlement Statements are standard forms that are used to document the flow of funds in real estate transactions. They are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)

United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program, made the announcement. Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit, and Assistant U.S. Attorneys Sara Miron Bloom and Victor A. Wild, also of the Economic Crimes Unit, prosecuted the cases.

Robert Farrace, 54, Modesto, California was sentenced today to two years in prison for a fraudulent short-sale scheme.

On November 14, 2017, a jury found Farrace guilty of three counts of wire fraud in connection with the scheme. According to court documents, Farrace, an attorney specializing in real estate law and the former president of the Stanislaus County Bar Association, owned two properties in Modesto, California with substantial mortgage loans. By early 2010, Farrace was in default and received foreclosure notices for the two properties. In order to keep the properties and avoid foreclosure, Farrace formed an entity called “Dignitas LLC” to purchase the properties.

According to evidence presented at trial, Farrace controlled Dignitas, but listed a friend’s name on the paperwork as a nominal manager because he knew the bank would not sell the property to a related party. Farrace then submitted short sale offers to the bank that serviced the loans on both properties, listing Dignitas and the nominee manager as the purchaser. Farrace misrepresented his relationship to Dignitas to induce the bank to approve the short sale. Because the servicing bank did not know of the true relationship, it went forward and completed one of the short sales. The short sale on the second property was stopped after law enforcement informed the bank of Farrace’s scheme.

U.S. Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Housing Finance Agency–Office of Inspector General, the Federal Bureau of Investigation, and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorneys Michael G. Tierney and Shelley D. Weger prosecuted the case.

Vanessa Ricci, 41, Methuen, Massachusetts, a mortgage loan officer, was sentenced yesterday in federal court in connection with a sweeping conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in Merrimack Valley, Massachusetts.

Ricci was sentenced to six months in prison, three years of supervised release and ordered to pay restitution of $963,730. In March 2018, Ricci pleaded guilty to one count of conspiracy to commit bank fraud. http://www.mortgagefraudblog.com/?s=Vanessa+Ricci

Co-defendants Jasmin Polanco, 37, a real estate closing attorney, previously pleaded guilty to one count of conspiracy to commit bank fraud and is scheduled to be sentenced on June 21, 2018;  Greisy Jimenez, 50, pleaded guilty to two counts of bank fraud and one count of conspiracy to commit bank fraud and is scheduled to be sentenced on June 6, 2018; Hyacinth Bellerose, 51, a real estate closing attorney, was sentenced in March 2017 to time served and one year of supervised release to be served in home detention after pleading guilty to conspiracy to commit bank fraud.

The charges arose out of a scheme to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen, Massachusetts in which the purported sellers remained in their homes, with their debt substantially reduced. A short sale is a sale of real estate for less than the value of any existing mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender. Generally, the lender absorbs a loss on the loan and releases the borrower from the unpaid balance. By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.

The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater” with homes worth less than the mortgage debt they owed. As part of the scheme, Jimenez, Polanco, Ricci, Bellerose and others submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales, thereby releasing the purported sellers from their unpaid mortgage debts, while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in their homes, with their debt substantially reduced.

The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties; in fact, the buyers and sellers were frequently related, and the sellers retained control of (and frequently continued to live in) the properties after the sale. The conspirators also submitted phony earnings statements in support of loan applications that were submitted to banks in order to obtain new financing for the purported sales. In addition, the defendants submitted phony “HUD-1 Settlement Statements” to banks that did not accurately reflect the disbursement of funds in the transactions. (HUD-1 Settlement Statements are standard forms that are used to document the flow of funds in real estate transactions. They are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)

United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program, made the announcement.  Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit, and Assistant U.S. Attorneys Sara Miron Bloom and Victor A. Wild, also of the Economic Crimes Unit, prosecuted the cases.

Mark Migdal, 72, Portola Valley, California, was sentenced today for conspiracy to commit bank fraud and providing false statements to banks in connection with short sale and loan modification requests.

According to his guilty plea, between June 2009 and April 2016, Migdal, conspired to defraud two federally-insured banks, now Bank of America and EverBank.  Migdal admitted the conspirators sought the banks’ approval for a short sale of two condominiums owned by Migdal in Kihei, Maui.  Midgal conspired to convince the banks to allow the properties to be sold in short sales to an individual who was, in reality, deceased.  A short sale is a sale in which a lender allows a property to be sold at a price that is less than the amount owed on the loan.  Thereafter, Migdal controlled and rented the properties using the deceased person’s identity, and later transferred the properties back to himself. Migdal further admitted that, between June 2009 and January 2010, he provided false statements to another federally-insured bank, JP Morgan Chase Bank, in an attempt to obtain mortgage modifications on his residence in Portola Valley, California, and a condominium owned by him in Mountain View, California.

On April 27, 2017, a federal grand jury issued a superseding indictment charging Migdal with one count of conspiracy to commit bank fraud, in violation of 18 U.S. C. § 1349; two counts of bank fraud, in violation of 18 U.S.C. § 1344(1) and (2); one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A; and two counts of making false statements to a federally insured institution, in violation of 18 U.S.C. § 1014.  Pursuant to his guilty plea, Migdal pleaded guilty to the conspiracy count, and the two counts of making false statements to a federally insured institution.  The remaining counts were dismissed. http://www.mortgagefraudblog.com/?s=Mark+Migdal

In addition to the term of imprisonment, Honorable Vince Chhabria, U.S. District Judge ordered Migdal to serve three years of supervised release and to pay restitution in the following amounts:  $239,519 to Fannie Mae, successor to the deed of trust held by EverBank; $202,491 to Bank of America; and $18,205 to JP Morgan Chase.  In addition, Migdal was also ordered to pay a $1,000,000 fine and to forfeit substitute assets totaling $539,784.98.

The announcement was made by Acting United States Attorney Alex G. Tse, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.

The case is being prosecuted by Assistant United States Attorneys Colin Sampson and Erin Cornell.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.