Two Charged in Millon Dollar Mortgage Fraud Scheme

admin —  December 7, 2009 — Leave a comment

Dwight Jenkins, 38, Dorchester, Massachusetts and Eric J. Archambault, 39, Wrentham, Massachusetts, were charged in an Indictment with multiple counts of wire fraud and money laundering in connection with a mortgage fraud scheme which generated more than $1 million in profits and sending nine properties into foreclosure.

The Indictment alleges that from about August 2006 through February 2007, Jenkins and his associates recruited “straw buyers” for the purchase of nine properties for which Archambault brokered the mortgages. The nine properties identified in the Indictment were individual units in triple-deckers at 77, 80 and 85 Draper Street, and 35 Harwood Street, all in Dorchester, Masschusetts. These properties had been converted to condominiums shortly before the sales to the straw buyers. It is alleged that, although the straw buyers took title to the properties and obtained mortgages to finance the purchases, none of the straw buyers actually intended to live in the condominiums they bought or intended to repay the loans. Instead, it is alleged that Jenkins and his associates promised the straw buyers that Jenkins, or his company, would pay the mortgages, maintain the properties, find tenants and then re-sell the properties. Jenkins and his associates allegedly promised most buyers they would be paid a fee for the use of their names and credit histories in securing the loans.

According to the Indictment, Jenkins and his associates referred the buyers to Archambault, who prepared fraudulent mortgage applications in the names of the straw buyers. It is alleged that these loan applications made false claims regarding the straw buyers’ employment, income and assets and also falsely represented that the straw buyers intended to occupy the premises as a primary residence. According to the Indictment, in some instances, the same straw buyer purchased two units in the same building on the same date and represented in loan applications prepared by Archambault that each buyer intended to make each unit his or her primary residence.

In some instances, according to the Indictment, Jenkins sold property he owned to the straw buyers and profited directly from the sale, and in other instances, Jenkins received $60,000 to $70,000 per closing through funds provided by the mortgage lenders. As a result of the transactions charged in the Indictment, Jenkins received a total of about $1.2 million. The Indictment also alleges that Archambault was paid various fees from the closings totaling about $80,817.40 and received an additional $75,000 from Jenkins from the proceeds of the loans Archambault brokered for the straw buyers.

Wire fraud carries a maximum penalty of up to 30 years’ imprisonment, to be followed by 5 years of supervised release and a $1,000,000 fine. Each count of money laundering is punishable by up to 10 years’ imprisonment, a $250,000 fine and 3 years of supervised release.

United States Attorney Carmen M. Ortiz, Steven Ricciardi, Special Agent in Charge of the United States Secret Service and Susan Dukes, Special Agent in Charge, of the Internal Revenue Service, Criminal Investigation – Boston Field Office, made the announcement.

The case was investigated by the Secret Service and the Internal Revenue Service. It is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.

The details contained in the Indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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