Archives For Straw Buyer

Joseph DiValli, Jackson, New Jersey, was sentenced today to 18 months in prison for his role in a large-scale mortgage fraud scheme that used phony documents and straw buyers to acquire more than $6 million in loans.

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

From March 2011 through November 2012, DiValli and other conspirators agreed to fraudulently obtain mortgage loans for properties located in North Jersey, New Jersey. After recruiting “straw buyers” to purchase the properties, DiValli and others submitted false and fraudulent loan applications and supporting documents so the straw buyers could qualify for the loans. DiValli and others also used another conspirator, who worked at a bank, to create misleading certifications showing certain bank accounts held more money than they actually had. DiValli and other conspirators also submitted false appraisal reports, backdated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.

As a loan officer for a North Jersey mortgage lender, DiValli facilitated some of these fraudulent transactions, including a $244,855.26 mortgage on a property located on Smith Street, Elizabeth, New Jersey. Overall, the scheme induced lenders to issue more than $6 million in loans, resulting in several defaults and exposing lenders and the Federal Housing Administration (FHA) to more than $2 million in potential losses.

DiValli also admitted using a separate scheme to modify the mortgage on his personal residence. From March 2011 through June 2012, Divalli used false payroll ledgers and earnings statements to deceive a loan officer into believing that his net earnings were lower than his actual income level.

DiValli also admitted receiving income of more than $450,000 in 2012. In order to avoid taxes of $79,000, DiValli failed to file taxes for 2012 and cashed his paychecks at a check-cashing facility to conceal his income.

DiValli previously pleaded guilty before U.S. District Judge Susan D. Wigenton to a superseding information charging him with one count of conspiracy to commit wire fraud, one count of wire fraud and one count of tax evasion. Judge Wigenton imposed the sentence today in Newark federal court.

In addition to the prison term, Judge Wigenton sentenced DiValli to three years of supervised release and ordered to pay restitution of $2,322,045.

U.S. Attorney Craig Carpenito made the announcement and credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Goldsmith Romero; special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the National Security Unit, Andrew Kogan of the Cyber Unit, and Senior Litigation Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit.

Defense counsel: Michael A. Koribanics Esq. Clifton, New Jersey.

Kirk Lawrence Brannan, 64, Texas has entered a guilty plea to bank fraud for his role in a mortgage fraud scheme.  Brannan admitted to conspiring with others from 2005 to 2009 to execute a scheme to defraud Wells Fargo Bank and other lenders.

Brannan sold 10 beach homes in the Freeport/Surfside, Texas area to “straw buyers” at exorbitant prices. Other co-conspirators recruited straw buyers who created loan applications with misrepresentations that lenders relied upon in deciding to make the mortgage loans. The applications contained misrepresentations of the buyer’s address, employer, income and expenses. The applications also suggested the buyers were much better credit risks than they actually were. Brannan admitted he paid kickbacks to co-conspirators each time one of the beach homes was sold to a straw buyer.

The beach properties were sold at two to three times the appraised values. The mortgage lenders, including Wells Fargo Bank, were induced to lend the inflated amounts for the purchases through flawed or fraudulent appraisals which were based on comparisons Brannan manufactured to further the scheme.

Brannan created settlement statements that suggested he sold three of his properties to his children at exorbitant prices. Appraisers relied upon these “sales” as comparable sales in appraising Brannan’s remaining properties sold to straw buyers. As a result of the fraudulent appraisals, he and his co-conspirators were able to inflate the values for his properties and deceive the lenders into approving home loans at those exorbitant amounts.

All of the straw buyers defaulted on the mortgages, and all 10 of the beach properties ended up in foreclosure.

The fraudulent mortgage loan scheme resulted in a loss of $5,317,350 to Wells Fargo Bank and the other lenders. Brannan paid $2,401,368 to his co-conspirators as part of the scheme.

U.S. District Judge Lee Rosenthal accepted the plea and set sentencing for Aug. 29, 2018, at which time Brannan faces up to 30 years in federal prison and a possible $1 million maximum fine. He was permitted to remain on bond pending that hearing.

Co-conspirators Chucoboie Lanier, 41, Houston, Texas, David Lee Morris, 55, Houston, Texas, and Derwin Jerome Blackshear, 50, Houston, Texas, previously pleaded guilty for their roles in the scheme. They are set for sentencing Sept. 26, 2018.

U.S. Attorney Ryan K. Patrick made the announcement.

The Texas Department of Public Safety and the FBI conducted the investigation. Assistant U.S. Attorneys Robert Johnson and Michael Day are prosecuting the case.

Dirk Hall, 42, Queens, New York was sentenced today to 41 months’ imprisonment, to be followed by five years of supervised release, after having pleaded guilty to conspiracy to commit bank fraud and wire fraud in connection with a multi-million dollar mortgage fraud scheme.

According to court filings and facts presented at the sentencing hearing, between September 2008 and May 2011, Hall, together with others, caused mortgage loan applications with false information to be submitted to lending institutions in connection with the purchase of residential properties located within the Eastern District of New York.  These applications contained fraudulently inflated purchase prices, as well as false information about the assets and income of the purchasers of the properties, many of whom were being compensated as part of the scheme to act as straw purchasers.  The defendant and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and the other borrowers had made down payments in connection with the purchase of the properties, which was a condition of the lending institutions for issuing the mortgage loans.

To carry out their scheme, the defendant and his co-conspirators conducted simultaneous purchases and sales of the properties, sometimes called “flips,” in an effort to conceal their criminal involvement and to inflate the value of the properties.  To that end, the defendant and his co-conspirators, through the use of backdated and falsified documents, concealed from the lending institutions the fact that the purchase and sale had occurred on the same day and made it appear as if the transaction between the homeowner and the co-conspirator had occurred over 60 days prior to the sale from the co-conspirator to the straw purchaser.

As a result of the false applications and appraisals, the lending institutions were fraudulently induced to issue millions of dollars of mortgage loans secured by properties that had inflated appraisal values to individuals who had insufficient income and assets to qualify for the mortgage loans.  In many instances, the straw purchasers and the other borrowers failed to make required mortgage payments to the lending institutions, which caused the mortgage loans to be placed into default status.

The announcement was made by United States District Judge Eric N. Vitaliano.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentencing.  Mr. Donoghue thanked the Federal Bureau of Investigation (FBI); the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG); the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); and the New York State Department of Financial Services (DFS) for their hard work and dedication over the course of this multi-year investigation and prosecution.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David C. Pitluck, Mark E. Bini and Michael T. Keilty are in charge of the prosecution.

Geoffrey S. Walsh, a former vice president of the Bank of Oswego, Lake Oswego, Oregon, was sentenced today to 30 months in federal prison followed by a three-year term of supervised release. Walsh had previously pleaded guilty to one count each of conspiracy to make false entries in bank records, conspiracy to commit mail and wire fraud, and wire fraud on July 22, 2015.

Facts Related to Conspiracy to Make False Entries in Bank Records Conviction

From January 2009 to May 2012, Walsh served as the Bank of Oswego’s Vice President and Director of Mortgage Services and later as its Vice President of Business Development and Lending Services. As an institution insured and regulated by the Federal Deposit Insurance Corporation (FDIC), the bank was required to submit quarterly call reports detailing the financial condition of the bank.

From 2009 through 2010, the bank was in second position on a mortgage secured by real property located on A Avenue, Lake Oswego, Oregon. The borrower’s failure to make timely payments and her deteriorating financial condition were discussed weekly by Walsh and other members of the bank’s Internal Loan Committee (ILC), including the CEO, Dan Heine and CFO, Diana Yates. In October 2010, the first mortgagee declared the borrower in default and foreclosed on the property. In order to avoid a loss of nearly $100,000 and avoid reporting the loss to the FDIC and the board of directors, Walsh, Heine and Yates formulated a plan to acquire and sell the property to recover the remaining balance on the loan. Walsh was put in charge of obtaining the property for the bank.

Walsh initially attempted to purchase the property directly from Fannie Mae, but was told it could only be sold to an individual who planned to occupy the property, and could not be sold to an institution until the property had been on the market for 15 days. On behalf of the bank, Walsh arranged for another bank employee to serve as a straw buyer, purchasing the property in the employee’s name. To accomplish this, Walsh, Heine and Yates agreed to and submitted false information to Fannie Mae about the true buyer, the source of the funds to purchase the property and the buyer’s intent to remain in the home as an occupant. Records of the sale were purposefully not maintained by Walsh, Heine and Yates in order to conceal the transaction from the bank’s board of directors and the FDIC.

On November 28, 2017, a federal jury found Heine and Yates guilty of a conspiracy to deceive the bank’s board of directors, shareholders and regulators as well as 12 counts of making false entries in the bank’s records to the FDIC and the board of directors. The verdict was based, in part, on the A Avenue transaction. Heine and Yates will be sentenced on March 5, 2018.

Facts Related to Conspiracy to Commit Mail and Wire Fraud Conviction

According to court documents, Walsh worked with his brother Gregory Walsh, a former Vice President at Morgan Stanley, to persuade an Arizona woman into loaning him more than $764,000 for a real estate investment scheme. The woman, a recent widow and client of Greg Walsh’s, was told the money would be used to purchase two condominiums in the Palm Springs, California area that would be titled in her name and sold within one year.

Contrary to the promises made, Walsh titled each of the properties in the name of his business and never provided any loan or title documentation to his investor. Between May and July 2012, he sold the properties without the knowledge or permission of his investor and used the proceeds to satisfy personal financial obligations.

In January 2013, Walsh contacted his brother to gauge the same investor’s interest in loaning him an additional $2 million for a real estate development project in Oregon. Greg Walsh transferred the money from the investor’s Morgan Stanley account to his brother without the investor’s knowledge or approval. On March 5, 2013, the majority of these funds – over $1.7 million – were used to pay the balance of a line of credit at the bank. Walsh spent the remainder of the funds.

Greg Walsh has also pleaded guilty to conspiracy to commit wire fraud for these same transactions. His will be sentenced on February 6, 2018.

Facts Related to Wire Fraud Conviction

In May 2012, Walsh secured a commercial loan for $500,000 from an Oregon resident, using the first two Palm Springs, California properties as collateral. In securing the loan, he failed to disclose that the properties were already pledged as security for loans he had obtained from the Arizona investor and that he was already in negotiations to sell one of the properties. Soon after receiving the loan, Walsh sold both properties and used the proceeds for his own benefit.

Between November 2012 and July 2013, the Oregon resident was repeatedly in contact with Walsh in an attempt to obtain repayment. Walsh assured his lender that he would repay the loan in full with interest. In May 2013, the lender met with the FBI to discuss Walsh’s default on the loan. Walsh made a partial repayment of $300,000 after the lender met with the FBI.

Geoff Walsh intentionally and repeatedly perpetrated large financial crimes that cheated individual investors and deceived bank regulators and the Bank of Oswego’s Board of Directors,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “He achieved this largely while retaining a position of trust as a bank executive. The imposition of this sentence demonstrates that stealing from investors and lying to regulators about a bank’s financial condition are grave matters and subject to felony charges and a prison sentence. Today’s sentencing is many years’ in the making and a testament to the hard work and persistence of federal law enforcement.”

Today’s sentencing helps to shed light on the sophisticated world of complex financial fraud at a bank where certain executives were more committed to their personal interests than those of their customers,” said Steve Goldman, Assistant Special Agent in Charge of the FBI in Oregon. “Geoff Walsh’s deal-making during these long-running schemes damaged the bank itself and hurt the friends and clients who had entrusted him with their money.”

This case was investigated by the FBI and the FDIC Office of Inspector General (OIG-FDIC) and prosecuted by Claire M. Fay, Michelle Holman Kerin, and Quinn P. Harrington, Assistant U.S. Attorneys for the District of Oregon.

Sergio Roman Barrientos, 64, Poway, California pleaded guilty to conspiracy to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, from about September 2004 through February 2008, Barrientos and co-conspirators Zalathiel Aguila and Omar Anabo operated an entity named Capital Access LLC, in Vallejo, California. They preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the distressed homeowners’ properties was then used for operational expenses of the scheme and personal expenses of Barrientos and his coconspirators. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

Co-defendant Zalathiel Aguila remains out of custody awaiting trial. Omar Anabo, charged elsewhere, is set for sentencing on April 27.

Barrientos is scheduled to be sentenced by Judge Garland E. Burrell Jr. on April 6, 2018. Barrientos faces a maximum statutory penalty of 30 years in prison and a $1 million fine.

The guilty plea was announced by U.S. Attorney McGregor W. Scott. The case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

Surjit Singh, 71, Dublin, California and his son, Rajeshwar Singh, 43, Pleasanton, California were each found guilty of four counts of mail fraud, four counts of bank fraud, and four counts of false statements on loan and credit applications. Anita Sharma, 55, Gilroy, California was found guilty of two counts of mail fraud, two counts of bank fraud, and two counts of false statements on loan and credit applications. The three were convicted for crimes relating to their involvement in a mortgage fraud scheme.

According to court documents, in 2006 and 2007, Surjit Singh recruited individuals with good credit to act as straw buyers for residential properties owned by his family members and associates. Rajeshwar Singh, a licensed real estate agent, assisted in the scheme by submitting loan applications for the straw buyers. Anita Sharma, a dental assistant at the time, was one of the straw buyers. Because Sharma and the other straw buyers could not afford the homes based on their true incomes, the Singhs submitted fraudulent loan applications and supporting material to lending institutions that included false statements about the straw buyers’ income, employment, liabilities, and intent to occupy the homes as their primary residences.

At least 14 properties were involved in the scheme. Anita Sharma alone purchased five homes in San Jose, San Ramon, Elk Grove, Sacramento, and Modesto, California. Other straw buyers purchased or refinanced properties in Stockton, Modesto, Patterson, Lathrop and Tracy, California. All of these homes were ultimately either foreclosed upon or sold in a short sale where the bank lets homeowners sell their homes for less than is owed on the mortgage.

Sharma was paid for her involvement in the scheme. Rajeshwar Singh received financial benefits through broker commissions for the transactions and as the seller of seven of the properties. He also continued to occupy the San Ramon, California property at a time when Anita Sharma should have been living there. Surjit Singh benefited through payments out of escrow directed to shell companies, such as SJR Investments and BK Investments, associated with his daughter and significant other, whose initials are SJR and BK respectively. These payments were purportedly for contracting services, which did not occur. He also benefited through rental payments made to him and his significant other by the renters of the homes, as the straw buyers were not living in the homes. In addition, many of his family members received money by selling properties and had money directed to them out of escrow. According to court documents and evidence produced at trial, the defendants were responsible for the origination of more than $9.3 million in fraudulently procured residential mortgage loans.

The defendants are scheduled for sentencing on January 26, 2018. They face a maximum penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The court remanded Surjit Singh into custody.

U.S. Attorney Phillip A. Talbert made the announcement.

Today’s verdict is yet another step in the efforts taken by this office and our partners at the FBI to bring to account those whose fraudulent activities contributed to the financial decline which had such a tremendous impact on our communities,” said U.S. Attorney Talbert. “We are gratified by the verdict and thankful for the hard work and dedication of our investigative partners.”

One of the FBI’s top priorities is to combat major white-collar crimes such as mortgage fraud,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “Mortgage fraud has negatively impacted entire communities in our region by artificially influencing home values and threatening the investments of lawful buyers. To ensure a bright future for our region, identification and investigation of mortgage fraud schemes is imperative. We will continue to investigate such crimes to both deter would-be fraudsters from acting and ensure those who commit fraud face justice.”

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Lee S. Bickley and Kelli L. Taylor are prosecuting the case.

Victor Santos, a/k/a “Vitor Santos,” 57, Wachtung, New Jersey; Arsenio Santos, a/k/a “Gaspar Santos,” 50, Warren, New Jersey; Fausto Simoes, 64, Millington, New Jersey; and, Raquel Casalinho, 37, Union, New Jersey, were charged today with one count each of conspiracy to commit bank fraud for using “straw buyers” to fraudulently obtain mortgage loans from a bank.

According to the complaint:

From September 2007 through November 2008, Victor Santos, a real estate investor; Arsenio Santos, a builder and Victor’s cousin; Casalinho, a junior home mortgage consultant at the victim bank and Victor’s niece; and Simoes, a real estate settlement attorney, and others allegedly conspired to fraudulently obtain mortgage loans with a total value of more than $5 million.

Victor Santos, Arsenio Santos, and their conspirators allegedly recruited straw buyers to purchase properties in Newark, New Jersey and obtained their identifying information, including Social Security cards and drivers’ licenses. A “straw buyer” was an individual who purchased a property for another in order to conceal the identity of the actual purchaser, usually in exchange for a fee.

In exchange for the use of the straw buyers’ identity and credit history, Victor Santos, Arsenio Santos, and others allegedly agreed to pay each of the straw buyers a fee of approximately $5,000, provide the straw buyer’s down payment and cash required for closing, secure tenants to lease the purchased property and make the mortgage payments on each of the fraudulently obtained mortgages. These secret agreements were not disclosed to the bank.

In accordance with Victor Santos’ instructions, the straw buyers’ information was provided to Casalinho and was used to prepare fraudulent mortgage loan applications that contained a variety of false statements, including the identity of the actual buyer. For the two representative schemes highlighted in the complaint, Casalinho, Victor Santos, Arsenio Santos, and their conspirators prepared and submitted mortgage applications containing false information to the bank and obtained loans totaling more than $900,000. The conspirators allegedly arranged transactions for the Newark properties whereby the straw buyers would nominally purchase the properties for far more than the sellers had agreed to sell them, and the conspirators kept the difference between the contract price and the amounts the sellers received.

Simoes was the closing attorney on approximately 10 of the fraudulent transactions and signed and certified as true the final settlement statements. These statements falsely stated that the cash required for closing for each transaction came from the straw buyer. In fact, Victor Santos and his conspirators provided those funds to Simoes and the funds were deposited into Simoes’ attorney trust account. For certain transactions, a shell company – whose bank account was controlled by Victor Santos and a conspirator and to which funds from fraudulently obtained mortgage loans were disbursed – was the source of the cashier’s checks given to Simoes to fund the buyer’s cash required at closing. For other transactions, down payments came from an account owned and controlled by Arsenio Santos and Victor Santos, the proceeds of the mortgage loan itself after funding or closing, or from the proceeds of a previously obtained fraudulent loan.

The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or twice the gross loss to others whichever is greater.

Acting U.S. Attorney William E. Fitzpatrick made the announcement.

Acting U.S. Attorney Fitzpatrick credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher of the Newark office, with the investigation leading to today’s charges.

The government is represented by Special Assistant U.S. Attorneys Kevin DiGregory and Charlie Divine and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Angelo Louissaint, 42, West Babylon, New York, and Jennifer Johnson, 42, West Babylon, New York, were sentenced after having been convicted of conspiring to commit mail and wire fraud.  The convictions were for their role in a mortgage fraud scheme that victimized Flaherty Funding, a mortgage company located in Rochester, New York. Louissaint was sentenced to 30 months in prison. Johnson was sentenced to five years probation to include six months home detention.

Assistant U.S. Attorney John J. Field, who handled the case, stated that the defendants worked together to prepare false mortgage applications in the names of straw buyers and used fraudulent supporting documents. Louissaint and Johnson worked together with another individual, against whom charges remain pending, to concoct the scheme to obtain mortgage loans from Flaherty Funding using fraudulent information. As a result of the scam, the defendants successfully obtained approximately $1,200,000 in loans, and sought an additional $900,000 for loans that ultimately did not close.

Acting U.S. Attorney James P. Kennedy, Jr. announced today that The sentencings are the culmination of efforts by the United States Postal Inspection Service, Boston Division, under the direction of Inspector-in-Charge Shelly Binkowski; the United States Postal Inspection Service, New York Division; and the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent-in-Charge.

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.

Sergey Shchirskiy, 41, Sacramento, California, was sentenced to seven years and 10 months in prison for his participation in two mortgage fraud schemes and one tax fraud scheme.

According to court documents, Shchirskiy pleaded guilty to one count of wire fraud in each of the two mortgage fraud cases, as well as one count of conspiracy to defraud the United States and one count of aggravated identity theft in the third tax fraud case.

According to the plea agreement, Shchirskiy was a loan processor in one mortgage fraud scheme (2:11-cr-514). Between April 2007 and November 2007, the co-conspirators used straw buyers to buy properties and then take out Home Equity Lines of Credit on the houses using fraudulent documents and statements. Shchirskiy helped to create the fraudulent supporting documents. All of the properties were foreclosed on, resulting in at least $1.5 million in losses to lenders.

According to the plea agreement in the second mortgage fraud scheme (2:12-cr-060), in April 2007, Shchirskiy recruited straw buyers to purchase a houses based on fraudulent loan applications. The applications gave false information about the buyer’s employment, income, assets, and intention to occupy the properties. The properties were foreclosed upon and resulted in a loss of more than $1.2 million to lenders.

According to the plea agreement in the tax fraud scheme (2:14-cr-198), between March 2011 and April 2011, Shchirskiy conspired with others to obtain false tax refunds by submitting fraudulent claims using the identities of various individuals, at least eight of which were stolen. Shchirskiy claimed Earned Income Tax Credit based on false claims of employment from California’s In-Home Supportive Services program. Shchirskiy and his co-conspirators made approximately 80 attempts to file fraudulent tax returns, attempting to receive $661,286 in fraudulent returns from the Internal Revenue Service. The IRS ultimately issued approximately $88,728 in fraudulent refunds.

U.S. Attorney Phillip A. Talbert announced the sentenced and U.S. District Judge Troy L. Nunley presided.  The cases were the product of investigations by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Heiko Coppola and Michele Beckwith prosecuted the cases.