Edgar A. Reyes-Colón and Francisco Quintero-Peña were indicted on charges of with making false statements in loan applications in scheme to obtain money from mortgage lending institutions.. The investigation revealed that as part of the scheme and artifice to defraud, the defendants, through straw buyers, purchased a property by obtaining mortgage loans from a federally insured financial institution in amounts substantially exceeding the selling price of the property. The excess amount of the loan was kicked back to the defendants, and then they would default on payment of the monthly mortgage premiums. In order to ensure the approval of the loan, the participants created and submitted false supporting documentation along with the loan application including financial statements, bank statements, employment verification letters and tax returns.
The defendants made material false statements to Doral Bank for the purposes of obtaining mortgage loan numbers 3006810889 & 3006804465 for a total amount of $560,000.00 for the purchase of property located at 131 Fairway Street, Palmas Plantation Development, Humacao, Puerto Rico. The false statements included: (i) in the final Uniform Residential Loan Applications for both loans that an individual had a bank account at Santander Bank ending in 8132 with a balance of $33,892.11 (the bank account did not exist); (ii) in the final Uniform Residential Loan Application for both loans that the individual had a monthly base income of $18,818.00 from a business she owned called K’ricias Boutique; (iii) in the HUD-1 for loan #3006810889 that the individual paid closing costs of $4,114.57; and (iv) in the HUD-1 for loan #3006804465 that the individual paid the closing costs of $22,166.48.
The defendants also supplied false and fraudulent account statements, financial statements, and a letter indicating that the individual’s then existing primary residence was producing rental income.
This case is being prosecuted by Assistant US Attorney Nicholas Cannon. The maximum penalties for these offenses are 20 years of imprisonment, and fines up to $1 million. The charges were announced by Puerto Rico U.S. Attorney Rosa Emilia Rodríguez-Vélez. . The investigation was conducted by the Department of Homeland Security (HSI), with the collaboration of the Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) and the Housing and Urban Development-Office of Inspector General (HUD-OIG).