Archives For Tennessee

Cristina Montijo was the subject of a complaint and arrest warrant issued in the Southern District of New York on charges of conspiracy to commit wire fraud and bank fraud, wire fraud and bank fraud in connection with fraudulent emails.  She was arrested in the Southern District of California.

According to the complaint, sworn to by a Detective with the New York City Police Department for the purpose of demonstrating probable cause for the issuance of the arrest warrant, on or about June 21, 2016 Victim-1 who was in the process of purchasing a home, received an email that purported to be from Victim-1’s attorney.  The fraudulent email instructed Victim-1 to wire $190,000 to a bank account at a San Diego Credit Union to be held in escrow for the home purchase.  A copy of the residential purchase contract for the property that Victim-1 was purchasing was included in the email. Victim-1 wired the money and then called the real estate attorney to confirm receipt of the wire and was told that the attorney had not requested the wire.  Victim-1 realized that the email address on the email received differed from the real estate attorney’s true email address by one character.  Victim-1 recalled the wire.

Victim-1 later received another email from the incorrect email address.  The new fraudulent email supplied an additional bank account number for Victim-1 to deposit funds into because the prior wire of funds had not been received.

According to the complaint, based on review of bank records, the detective learned that the bank account number in the first fraudulent email to Victim-1 was registered to Montijo.  The account was opened about June 16, 2016 and closed about June 23, 2016 due to suspected fraud.

The complaint also states that in or about November 3, 2015, Victim-2, an individual in Tennessee, received a fraudulent email purportedly from Victim-2’s real estate agent directing Victim-2 to wire approximately $181,000 to a bank account.  Victim-2 later realized the email address was different by one character from that of the actual real estate agent.  Victim-2 became suspicious and, after contacting the real estate agent, did not wire the funds. That account was also registered to Montijo and was opened about October 3, 2015.

On about November 24, 2015, Victim-3, an individual in Hawaii, received emails purportedly from Victim-3’s escrow officer and real estate agent but which were different from the actual email addresses by one character.  Based on the directives in these fraudulent emails, Victim-3 wired approximately $331,000 to a bank account. That bank account, opened on November 13, 2015, was registered to Fountain Co-Cooperative LLC and was closed December 10, 2015 due to suspected fraud. Montijo was the sold registered agent of Fountain Co-Cooperative, LLC and was registered to an address on Chamoune Avenue in San Diego at which Montijo resided since at least 1993. In November 2015, Montijo wired approximately $181,500 from that account to an account in Malaysia and approximately $118,200 to an account in South Africa.

In about April 2016, Victim-4, an individual in San Francisco, California, received a fraudulent email purporting to be from the real estate agent involved in a real estate transaction for Victim-4 and instructing Victim-4 to wire approximately $127,791 to be held in escrow in an identified bank account.  Victim-4 wired the funds and later discovered the email address was one character different from that of the real estate agent. That bank account was opened about March 31, 2016 and closed April 5, 2016 and was registered to Fountain Co-Cooperative, LLC.

On about April 28, 2016, Victim-5 received a fraudulent email purportedly from Victim-5’s attorney. Victim-5 later learned the attorney’s email account had been compromised or hacked.  At the direction of the fraudulent emails, one of which referenced the sender’s “account secretary Christina Montijo who is a trustee to the trust account” (the fraudulent emails were later traced to an originating IP address in South Africa), Victim-5 wired approximately $250,000 to a bank account. That bank account, opened about March 31, 2016 and closed about May 6 due to fraudulent activity, was registered to Montijo and Fountain Co-Cooperative LLC.   On about May 4, 2016, Montijo attempted to wire funds to another bank account that was jointly registered to Montijo and Albert Montijo (believed to be the name of Montijo’s deceased husband.)   Montijo was informed by bank employees that the wire was potentially fraudulent and Montijo claimed that she had been owed the funds from Victim-5 from a real estate transaction from several years prior and that she had business partners abroad.

On about June 30, 2016, Victim-6, an individual in the Southern District of New York, received a fraudulent email purportedly from Victim-6’s attorney, later learning the attorney’s emails had been compromised or hacked.  Victim-6 wired approximately $240,000 to a bank account, again registered to Fountain Co-Cooperative, LLC. Montijo attempted to wire a portion of these funds to an entity called “Refunds LLC” purportedly for a “refund owed” but actually sent to an account in the name of “Reofunds LLC.”

Montijo registered a company called “All Cover LLC” in the state of California for the purpose of “buying/selling real estate” On about July 14, 2016, Montijo attempted to cash four checks made out to All Cover totaling approximately $46,500.  From discussions with representatives of the three companies that issued the checks, the detective states that he learned that the checks were fraudulent and not written out to All Cover.  The indictment details additional allegedly fraudulent checks that Montijo attempted to cash and which were made out to herself, Fountain Co-Cooperative LLC and a person believe to be Montijo’s mother-in-law.

Kirk Douglas West aka Kirk R. Leipzig was charged with two counts of bank fraud by Information in the United States District Court for the Middle District of Tennessee (Nashville Division.)  The Information alleges that Leipzig inflated his income and net worth on personal financial statements and/or loan application documents submitted to Reliant Bank and submitted fraudulent or forged documents to support the misrepresentations – including a consulting agreement purporting to guarantee income of approximately $300,000 a year for multiple years, W-2 forms, a pay stub, and income tax returns.  Based on these misrepresentations, Reliant Bank disbursed two loans, the first on December 4, 2008 for $610,000 secured by 9569 Hampton Reserve Drive, Brentwood Tennessee and the second on March 1, 2010 for $1,600,000 secured by 4303 Harding Place, Nashville, Tennessee.  The information also seeks forfeiture.

Leipzig’s real estate investment success was featured in the Forbes article “Flipping for Profit” on July 8, 2008.  According to the Nashville Post, Greg Sturgeon filed a complaint in the Davidson County Chancery Court in March 2013, which was dismissed with prejudice a short time later, alleging that Leipzig, the manager of Home Equity Asset Partners, promised him a return on investment for contributing $60,000 to an East Nashville house flip and, that while Leipzig sold the home for $457,000 after purchasing it for $135,000, he had quitclaimed the property to Home Equity Asset Partners without Sturgeon’s knowledge and only returned about $40,000 of Sturgeon’s initial investment. The article also refers to other lawsuits against Leipzig, including lawsuits by two banks which claimed Leipzig failed to repay loans in 2011 and 2012.  A May 2013 article in the Nashville Post states that the City of Belle Meade filed a lawsuit against a land trust that owns a dilapidated property – the trustee of the trust being listed as under the care of Leipzig – claiming the property’s condition violated numerous codes.

Leipzig and his trust were also the subject of involuntary bankruptcy filings by creditors in 2014.

Murray O. Wilhoite, Jr., 68, Franklin, Tennessee, was convicted of three felony charges following a trial before U.S. District Court Judge Aleta A. Trauger.  The jury convicted Wilhoite of making a false statement to a bank, making a false statement in a federal bankruptcy filing, and making a false statement under oath during a bankruptcy hearing.

Evidence presented during the trial demonstrated that Wilhoite obtained a $1.2 million loan in December 2007 by pledging, as collateral, a Franklin, Tennessee property that he did not own. During trial, testimony and exhibits proved that Wilhoite knowingly misrepresented to an FDIC-insured bank that he owned certain real property that he pledged as collateral. However, as trial evidence proved, the property was owned at all relevant times by his father.

In documents signed during the closing for this loan, Wilhoite falsely represented that he was the owner and titleholder of the property, and the bank relied on his statements in permitting him to obtain a loan using the Franklin property as collateral in lieu of a down payment.  Wilhoite subsequently lied during a 2011 bankruptcy filing, by again misrepresenting that he owned the Franklin property, and did so for the purpose of preventing the bank from foreclosing on this property after he defaulted on his loan. Wilhoite lied again at a 2013 hearing before the U.S. Bankruptcy Court for the Middle District of Tennessee, during which he perjured himself by falsely stating that he had not known that the Franklin property was designated as collateral for the loan. The evidence at trial proved that Wilhoite made the bankruptcy-related false statements knowingly and with the intent to deceive.

Wilhoite faces up to 30 years in prison and a fine of up to $1,000,000 on the false statement to a bank charge, and up to 5 years in prison and fines of up to $250,000 on the other charges. Wilhoite will be sentenced by Judge Trauger on September 23, 2016. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.

The conviction was announced by announced United States Attorney David Rivera.  The case was investigated by the Federal Bureau of Investigation and the Office of the United States Trustee. The case is being prosecuted by Assistant U.S. Attorneys Sandra G. Moses and William F. Abely.

Garry Christopher Forsythe, 42, Hendersonville, Tennessee, was sentenced to 33 months in prison to be followed by two years of supervised release and ordered to pay $2,249,294.80 in restitution and to forfeit the proceeds of his crime.

Forysthe pleaded guilty to one count of wire fraud in December 2015 in connection with a scheme involving escrow funds held by his real estate closing company, Forsythe Title and Escrow. During the sentencing hearing, evidence established that the company’s escrow accounts developed shortages of more than $2.2 million because Forsythe made inflated or unsupported transfers of funds from the escrow accounts to the company’s operating accounts. Testimony during the hearing also established that, contrary to Forsythe’s position, the escrow shortages were not inadvertently caused by the failure to deposit checks or by bank errors. The evidence demonstrated that, in one instance, funds were transferred from an escrow account at Forsythe Title & Escrow and used for the down payment on a boat purchased by Forsythe.  Evidence also demonstrated that the escrow shortages resulted in bounced checks, delays in scheduled real estate closings, and instances in which borrowers were left with two mortgages because Forsythe Title & Escrow failed to pay financial institutions with funds that had been provided for that purpose.

U.S. District Court Judge Aleta A. Trauger imposed the sentence and it was announced by David Rivera, U.S. Attorney for the Middle District of Tennessee.  The case was investigated by the FBI and the IRS-Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.

Ray M. Mubarak, 56, Knoxville, Tennessee, was sentenced to serve 57 months in prison for conducting a scheme to defraud financial institutions and engaging in an unlawful monetary transaction with fraudulently-obtained loan proceeds.  He was also ordered to pay $1,993,938.44 in restitution to three banks and a title insurance company that lost money as a result of the scheme.

Mubarak pleaded guilty in May 2015 to federal charges stemming from his scheme to defraud multiple banks into loaning him over $6 million. He submitted false tax returns and personal financial statements which grossly inflated his income and net worth in order to qualify for the loans. Mubarak also admitted to defrauding the banks by causing them to rely on a fraudulent title opinion letter and forged loan closing documents and deeds.

The trial for Mubarak’s co-defendants, Dianna Mubarak and Blythe Bond Sanders, III, is scheduled for March 1, 2016.

Marbarak was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge.  The investigation was conducted by the Internal Revenue Service – Criminal Investigation and Federal Bureau of Investigation.  The investigation and prosecution of Mubarak was coordinated with the Office of the District Attorney General, 6th Judicial District.  Matthew T. Morris, Assistant U.S. Attorney, represented the United States.

Clifford Elliot Ryan, 29, Chicago, Illinois, was charged in two separate indictments in Tennessee in connection with forgery to obtain a real estate license.  During the course of the investigation, agents from the Tennessee Bureau of Investigation developed information that on two different occasions, Ryan hired two different individuals to submit their fingerprints as his so he could obtain a Tennessee real estate license. The investigation additionally revealed Ryan believed prior arrests on his record would prevent him from passing the background check necessary for obtaining a license.

In January, the Wilson County Grand Jury returned indictments for Ryan, a former resident of Tennessee, charging him with one count of Criminal Simulation and one count of Forgery/Passing a Forged Instrument in Wilson County, Tennessee. In March, the Davidson County Grand Jury returned indictments, charging Ryan with one count of Fabrication of Evidence, one count of Attempted Fabrication of Evidence, and one count of Criminal Simulation.

Grady Wayne Fricks, 65, Nashville, Tennessee, pleaded guilty to conspiracy charges arising out of a scheme to defraud Cornerstone Community Bank, Dalton, Georgia, using false appraisals, settlement statements and misrepresentations to qualify for more than a million dollars in loans.

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Ray M. Mubarak, 55, Knoxville, Tennessee, pleaded guilty on May 18, 2015, in the U.S. District Court for the Eastern District of Tennessee, Knoxville, to conspiracy to commit bank fraud, bank fraud, and engaging in an unlawful monetary transaction with bank fraud proceeds.

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Ray M. Mubarak, 54, Knoxville, Tennessee, Dianna Mubarak, 52, Knoxville, and Blythe Bond Sanders, III, 35, Norris, Tennessee, were arrested by federal agents for allegedly participated in a bank fraud conspiracy involving fraudulent loans exceeding $6.7 million.

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Jayesh Dahyabhai Patel, 49, Knoxville, Tennessee, was sentenced on Jan. 15, 2015, by the Honorable Leon Jordan, U.S. District Court Judge, to serve 42 months in federal prison. Patel was also ordered to pay restitution of $2,806,438.20 to First Community Bank and serve five years of supervised release upon his release from prison.

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