Osvaldo A. Mercado, 54, Gainesville, Virginia, was sentenced to 24 months in prison, followed by three years of supervised release, for engaging in a mortgage fraud scheme that defrauded Virginia banks of nearly $2.4 million in fraudulent loans.
On February 24, 2012, Mercado pled guilty to conspiring to commit bank fraud. According to court records, Mercado operated a Manassas-based tax preparation business, Union Hispana Multiservices. Beginning in 2004, Mercado helped clients of complicit real estate agents to secure personal mortgage loans by creating fraudulent tax letters stating that the borrowers had self-employment income and owned their own businesses.
In fact, the borrowers often had low-wage jobs and could not afford the homes or qualify for the loans. As part of the scheme, Mercado‘s 10-person company also prepared fraudulent tax returns, knowing that they were never intended to be filed with the IRS.
Based in part upon the fraudulent tax letters prepared by Union Hispana, Virginia banks approved more $3.9 million in fraudulent loans to clients who were unemployed and lacked the ability to repay the loans. As a result, these lenders suffered losses of nearly $2.4 million.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation (FDIC); and John P. Torres, Special Agent in Charge for ICE’s, Homeland Security Investigations (HSI) in Washington, D.C., made the announcement after sentencing by United States District Judge T. S. Ellis, III.
This ongoing investigation is being conducted by the FBI’s Washington Field Office, the FDIC Office of Inspector General, and ICE-HSI. Assistant United States Attorney James P. Gillis and Special Assistant U.S. Attorney Jessica R.C. Malloy are prosecuting the case on behalf of the United States.