Lawrence Humphrey, 50, Brooklyn, New York, was sentenced today to five years in state prison for engaging in a fraudulent scheme in which he conspired with a woman to use bad checks to purchase three homes in New Jersey.

Humphrey was indicted in December 2016 along with his co-conspirator, Tara Stokes, 51, Flushing, New York, as the result of an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau. Stokes pleaded guilty to second-degree theft by deception and was sentenced on May 18, 2018 to four years in prison by Judge Smith. Humphrey was wanted as a fugitive in this case for two years.

The investigation revealed that Stokes and Humphrey presented checks drawn on a closed bank account to buy three homes in New Jersey. In each case, Stokes used the name “Tara Humphrey.” Two of the properties are located in Gloucester County, Greenwich Township and Monroe Township, and one is located in Winslow Township, Camden County, New Jersey. The closed bank account was in the name of a fictitious law firm, Law Offices of Tara Humphrey. Tara Stokes is not a lawyer.

Stokes and Humphrey wrote multiple bad checks for two of the properties, writing new checks when the first checks bounced. Three bad checks for $240,000 were written for the Monroe property, all from the account of the fictitious law firm. Bad checks for $296,639 and $299,139 were issued for the Greenwich property, with the second check being drawn on a different bank account, which was open but did not have sufficient funds. A bad check for $305,684 drawn on the law firm account was written for the Winslow property. Bad checks for $2,500 and $10,000 were also written from that account to pay deposits on the Greenwich and Winslow homes.

While titles for the three properties changed hands at the closings, in each case the fraud was quickly uncovered, and two of the deeds were not recorded. The state’s investigation began with a referral from a law firm representing the title company that handled the closing for the Monroe Township property.

Humphrey pleaded guilty on April 29, 2019 to a charge of second-degree theft by deception.

Attorney General Gurbir S. Grewal made the announcement.

Because of the large sums of money involved, real estate transactions and mortgage loans are a prime target for con artists, who impose major costs on the industry that are passed on to honest consumers,” said Attorney General Grewal. “By sending criminals like Humphrey and Stokes to prison, we deliver a strong deterrent message to others who might consider committing this type of fraud.

Financial fraud disrupts commerce and imposes major costs on individuals as well as businesses,” said Director Veronica Allende of the Division of Criminal Justice. “We are committed to fighting fraud by aggressively investigating and prosecuting white collar criminals like Humphrey and his co-conspirator, Stokes. I commend the attorneys, detectives, and staff in our Financial & Computer Crimes Bureau who ensured that both of these defendants received substantial prison sentences.”

Deputy Attorney General William N. Conlow was the lead prosecutor on the case, and Deputy Attorney General Derek Miller handled the sentencing for the Division of Criminal Justice Financial & Computer Crimes Bureau. Detective Richard Loufik was the lead detective for the Division of Criminal Justice.

Jacqueline Graham, 53, formerly of Levittown, Pennsylvania was convicted at trial on Wednesday, June 12, 2019, of participating in a conspiracy to commit bank fraud, wire fraud, and mail fraud in connection with a fraudulent debt-elimination scheme to defraud homeowners and banks.

According to the Indictment in the case and the evidence presented at trial:

From at least 2011 to at least 2012, Graham partnered with Bruce Lewis, 67, formerly of Alaska and Washington State and John Ruzza in operating the Valhalla, New York-based Terra Foundation (“Terra”) ,which was originally known as the Pillow Foundation, which held itself out as a business that would investigate and eliminate mortgage loans in exchange for fees, soliciting clients who were having difficulties making their mortgage payments.  In fact, however, Terra engaged in a wide-ranging scheme to defraud clients, county clerks’ offices, and banks.

The fraudulent scheme, which was created by Graham and Lewis, involved Terra performing “audits” of clients’ mortgages, sending pseudo-legal paperwork to the banks and/or lenders holding the mortgages, and ultimately filing purported mortgage discharges with the relevant county clerks’ offices, which discharges were signed by Lewis or other co-conspirators, claiming falsely to represent the banks and/or mortgage lenders.  As a result, anyone doing a title search for one of Terra’s clients would see that the client’s mortgage had been satisfied.  The mortgages had not, however, been discharged, and the mortgages were eventually reinstated, after the clients paid their fees.

In order to effectuate the scheme, Graham, Lewis, and Ruzza involved others, including Rocco Cermele, 56, Yonkers, New York , who was Terra’s director of operations and who recruited clients, among other duties; Paula Guadagno, who did real estate title work for, and filed discharges on behalf of, Terra; and Anthony Vigna, 61, Thornwood, New York,  a lawyer and CPA who worked in Terra’s offices.

To profit from their scheme, Graham and her co-conspirators charged various fees to Terra’s clients.

In total, Graham and her co-conspirators filed over 60 fraudulent discharges in Westchester and Putnam Counties in New York, and in Connecticut.  The fraudulent discharges claimed to discharge mortgages with a total loan principal of nearly $38 million.

Graham was convicted of one count of conspiracy to commit bank fraud, wire fraud, and mail fraud.  The count carries a maximum sentence of 30 years in prison.

Lewis pled guilty to one count of wire fraud relating to the Terra scheme, which carries a maximum sentence of 20 years in prison.

Vigna pled guilty to one count of participating in a conspiracy to commit bank fraud, wire fraud, and mail fraud relating to the Terra scheme, which carries a maximum sentence of five years in prison.

Cermele pled guilty to one count of participating in a conspiracy to commit mail, wire, and bank fraud, and one count of wire fraud, each relating to the Terra scheme, each of which carries a maximum potential sentence of 30 years in prison, and three additional counts of wire fraud relating to other crimes, each of which carries a maximum potential sentence of 20 years in prison.

Graham was found guilty of the one count she faced after a two-week trial before U.S. District Judge Nelson S. Román.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the court.

All defendants are awaiting sentencing.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, made the announcement.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Jacqueline Graham preyed on vulnerable homeowners who could not afford their mortgage payments during a time of crisis in the housing market.  Because of her greed, these homeowners ended up financially worse off than when they found her.  We will continue to work with our law enforcement partners to bring to justice those who victimize the vulnerable.”

Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Berman also thanked the Office of the Westchester County District Attorney’s Office and the Department of Housing and Urban Development for their assistance in the case.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys David Felton, Michael Maimin, and James McMahon are in charge of the prosecutions.

Yale Schiff, 44, Riverwoods, Illinois, a north suburban businessman has been indicted on Wednesday, on bank fraud and identity theft charges for allegedly fraudulently obtaining millions of dollars in mortgage and vehicle loans and using stolen identities to secure credit from financial institutions.

Schiff made false statements in loan applications to obtain mortgage loans secured by a variety of properties, according to an indictment returned in U.S. District Court in Chicago.  The charges allege that Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.

The identity theft charges pertain to Schiff’s alleged use of multiple fake and stolen identities to fraudulently obtain loans for vehicles, including a Jeep Grand Cherokee and a Lexus RX350.  The indictment accuses Schiff of submitting to the Recorder’s office fake letters from financial institutions and false releases of the vehicle liens, claiming that the loans were paid in full.  In reality, Schiff knew the letters were bogus and that the loans were not paid in full, the indictment states.  Schiff then allegedly sold the vehicles, keeping the proceeds without paying the loans.

Schiff also used stolen identities to obtain lines of credit and credit cards, including a charge card at Nordstrom department store that he used for personal use, the indictment states.  He then allegedly left large unpaid balances on the cards and the credit lines.

The charges allege that three of Schiff’s relatives and a business associate aided him in the schemes.  The indictment seeks forfeiture of a personal money judgment of approximately $4.7 million, as well as a property in Riverwoods.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory minimum sentence of two years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Steve Young Kang, a/k/a “Steven Young Kang and “Young Tae Kang,” 64, Ridgefield, New Jersey, and Young Jin Son, a/k/a “Joshua Son,” 49, Norwood, New Jersey, pleaded guilty today for their respective roles in a scheme to defraud financial institutions and others.

According to documents filed in these cases and statements made in court:

Kang, Son and others fraudulently induced mortgage lenders to participate in “short sale” transactions. In a typical short sale transactions, a financial institution agrees to allow a house owner in financial distress to sell his or her home for less than they owe on their mortgages. Such transactions are called short sales because the market value of the house is less than the amount owed by the house owner and the lender agrees to accept a payment “short” of the amount owed by the house owner.

Kang, a real estate broker and agent, admitted to a scheme in which, from June 2013 to January 2017, he sold his own properties and recruited others to sell properties in short sales to a co-schemer, Mehdi Kassai, who was able to obtain the properties for substantially less than the properties were actually worth through false documents, straw buyers, cosmetic damage to properties, and restricting the ability of others to bid on and buy those properties. Kassai then sold many of those properties to third-parties at a substantial profit. Kang defrauded financial institutions and others of $2.7 million in this manner.

Son, a real estate broker and agent, admitted recruiting others to sell properties in short sales to Kassai, who obtained the properties for substantially less than they were actually worth through false documents, straw buyers, cosmetic damage to properties, and restricting the ability of others to bid and buy those properties. Kassai sold many of those properties to third-parties at a substantial profit. Son defrauded financial institutions and others of $1.9 million in this manner.

The bank fraud and wire fraud charges each carry a maximum potential statutory penalties of 30 years in prison and a $1 million fine. Kang and Son have both agreed to forfeit the proceeds of the scheme. Sentencing for both defendants is scheduled for Oct. 1, 2019. Kassai previously pleaded guilty to his role in the scheme and is awaiting sentencing.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited the Bergen County Prosecutor’s Office, under the direction of Prosecutor Mark Musella; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge, Robert Manchak; and special agents of the U.S. Department of Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to the guilty pleas.

The government is represented by Senior Trial Counsel Andrew Leven of the Healthcare & Government Fraud Unit of the U.S. Attorney’s Office, District of New Jersey, and Special Assistant U.S. Attorneys Charlie Divine and Kevin Di Gregory of the Federal Housing Finance Agency, Office of Inspector General.

 

Robert Morgan, Frank Giacobbe, Todd Morgan, and Michael Tremiti, have been charged today in a 114-count superseding indictment charging them with conspiracy to commit wire fraud and bank fraud for their roles in a half billion dollar mortgage fraud scheme.

The defendants each face various additional charges such as wire and bank fraud, and money laundering. Todd Morgan and Robert Morgan are also charged with wire fraud conspiracy to defraud insurance companies. The charges carry a maximum penalty of 30 years in prison and a fine in the amount of double the loss caused by the crimes, which is currently estimated to exceed $25,000,000.

During the course of the conspiracy:

  • Robert Morgan was the managing member and chief executive officer of Morgan Management. In addition to his role with Morgan Management, he controlled and managed owned a substantial portfolio of real estate holdings;
    • Frank Giacobbe owned and operated Aurora Capital Advisors, identified himself as the Principal, and employed others to assist him in brokering, and attempting to broker real estate loans;
    • Todd Morgan was employed at Morgan Management, and worked as a Project Manager at the company; and
    • Michael Tremiti was employed at Morgan Management, and worked as Director of Finance for the company.

According to the superseding indictment, between 2007 and June 2017, the defendants conspired with Kevin Morgan, Patrick Ogiony, Scott Cresswell, and others to fraudulently obtain moneys, funds, credits, assets, securities, and other property from financial institutions such as Arbor Commercial Mortgage, LLC and Berkadia Commercial Mortgage, LLC, and government sponsored enterprises, including Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal National Mortgage Association (Fannie Mae).

The defendants provided false information to financial institutions and government sponsored enterprises overstating the incomes of properties owned by Morgan Management or certain principals of Morgan Management. The false information induced financial institutions to issue loans: (1) for greater values than the financial institutions would have authorized had they been provided with truthful information; and (2) that the financial institutions would not have issued at the time of issuance had they been provided with truthful information. These properties included:

  The Preserve at Autumn Ridge, Watertown, New York;
  The Eden Square Apartments, Cranberry Township, Pennsylvania;
  The Rochester Village Apartments at Park Place, Cranberry Township, Pennsylvania;
  The Reserve at Southpointe, Canonsburg, Pennsylvania;
  7100 South Shore Drive Apartments, Chicago, Illinois;
  The Avon Commons Apartments, Avon, New York;
  The Morgan Bay Apartments, Houston, Texas;
  Brookwood on the Green, Syracuse, New York;
  The Creek Hill Apartments, Rochester, New York;
  Hickory Hollow, Rochester, New York;
  The Knollwood Manor Apartments, Rochester, New York;
  The Links at Centerpointe, Canandaigua, New York;
  The Nineteen North Apartments, Pittsburgh, Pennsylvania;
  The Overlook at Golden Hills, Lexington, South Carolina;
  The Penbrooke Meadows Apartments, Rochester, New York;
  The Trails of North Hills Apartments, Raleigh, North Carolina;
  The Rivers Pointe Apartments, Syracuse, New York;
  The Union Square Apartments, Rochester, New York;
  The View at MacKenzi, York, Pennsylvania; and
  The Villas of Victor, Rochester, New York.

To facilitate the conspiracy:

  • Morgan Management provided property management, accounting, and financial reporting services for the properties owned by limited liability companies controlled by defendant Robert Morgan.
    • The defendants conspired to manipulate income and expenses for properties to meet debt service coverage ratios (“DSCRs”) required by lending institutions. The manipulation included, among other things, removing expenses from information reported to lenders and keeping two sets of books for at least 70 properties, with one set of books containing true and accurate figures and a second set of books containing manipulated figures to be provided to lenders in connection with servicing and re-financing loans.
    • The defendants conspired to present lending institutions with false and fraudulent inflated construction contracts and invoices that falsely reported to the lending institution that the contractor constructing a property was being paid more than the contractor was actually being paid.
    • The defendants provided false information to financial institutions and government sponsored enterprises that overstated net incomes of properties and thereby induced financial institutions to: (1) issue loans (a) for greater values than financial institutions would have authorized had they been provided with truthful information; and (b) that the financial institutions would not have issued at the time of issuance had they been provided with truthful information; and (2) forgo contractual rights that would have inured to the financial institutions had the defendants and Morgan Management presented accurate financial information to the financial institutions.
    • The defendants employed various mechanisms to mislead inspectors, appraisers, financial institutions and government sponsored enterprises with respect to the occupancy of properties.
    • The defendants falsely inflated the amounts owed on properties, by among other things, (1) providing false documentation of obligations purportedly associated with the properties, (2) misrepresenting the actual purchase prices of properties by providing false contracts and contract prices, and (3), as set forth above, presenting false construction contracts and invoices.

In the wire fraud conspiracy to defraud insurers, Todd Morgan and Robert Morgan are accused of conspiring with Kevin Morgan and Scott Cresswell to present false and inflated contracts and invoices for repairs to insurers after damages to properties in Robert Morgan’s real estate portfolio. These properties include the Summerwood Apartments, Merrillville, Indiana; the Eden Square Apartments, Cranberry Township, Pennsylvania; and at thirty-four properties in the Rochester, New York area after a March 2017 windstorm in that area.

The defendants are also charged with money laundering conspiracy for engaging in monetary transactions in excess of $10,000 using the proceeds of wire fraud and bank fraud.

The total loss sustained by financial institutions and government sponsored enterprises throughout the mortgage fraud scheme is currently estimated to exceed $25,000,000. The loss resulting from the insurance fraud scheme is currently estimated at approximately $3,000,000.

The defendants made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and were released on conditions.
U.S. Attorney James P. Kennedy, Jr. made the announcement.

The charges announced today reflect this Office’s commitment to ensuring that those who do business with the mortgage, banking, and insurance industries act with honesty and integrity,” stated U.S. Attorney Kennedy. “The scope of the dishonesty and deceit alleged here—both in a geographic sense as well as in terms of the dollar value of the mortgages and properties involved—was expansive. This type of fraud strikes at the very heart of those industries, and I commend the FBI and the FHFA-OIG for the significant resources they devoted to this investigation in order to reveal the full scope of the illegal conduct alleged in this superseding indictment.

Today’s charges allege Robert Morgan-and the men he surrounded himself with in business-worked hard with a desire to creatively subvert the integrity of the financial industry,” said FBI Buffalo Special Agent-in-Charge Gary Loeffert. “In response, we worked just as hard and creatively to put a stop to it. We hope the indictment returned in this case helps to educate and protect the tens of thousands of investors who own mortgage-backed securities.”

Richard Parker, Acting Deputy Inspector General for Investigations for the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), said, “the financing of multifamily loans is a significant segment of Fannie Mae’s and Freddie Mac’s portfolio.  As these charges demonstrate, FHFA-OIG will work with our partners in law enforcement to investigate and hold accountable those who seek to victimize the entities regulated by FHFA.”

Defendants Kevin Morgan and Patrick Ogiony were previously convicted of conspiracy to commit bank fraud, and defendant Scott Cresswell was previously convicted of conspiracy to commit wire fraud for their roles in the multi-million dollar fraud scheme. All three defendants are awaiting sentencing.

The superseding indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Federal Housing Finance Agency, Office of Inspector

General, under the direction of Special Agent-in-Charge Robert Manchak, Northeast Region.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

 

Ramjit Jaikaran, a.k.a. A.J. Jaikaran, 55, South Ozone Park, Queens; Colin Hill, 41, Jamaica, Queens; Kaso Rampersad, 51,  Orlando, Florida, and Justin Codrington, 29,  New Rochelle, New York were arraigned today on an indictment in which they are variously charged with grand larceny, money laundering, identity theft, and other charges for allegedly conspiring to sell a vacant Canarsie, Brooklyn house to the victims, using forged documents to conceal the fact that the homeowner was deceased, and then stealing the $276,000 that the couple paid for the property.

According to the investigation, in July 2017, a married Guyanese couple who wanted to invest in Brooklyn real estate were allegedly fraudulently induced by the defendants to pay $276,000 to purchase a residential property located on East 94th Street, Canarsie, Brooklyn, which the couple believed the defendants were authorized to sell. The property was actually owned by Ruth Adelman, who died in 1993 without a will.

It is alleged that defendant Jaikaran showed the house to the couple and claimed that it was for sale. Defendant Rampersad allegedly pretended to represent Adelman’s heir – falsely claiming that she had a son who inherited the property and was willing to sell it. Ms. Adelman did not have any children, and the person identified by the defendants as her “son” was in fact the victim of identity theft.

It is alleged that defendant Hill agreed to act as the couple’s attorney at the closing for the property on July 31, 2017. Hill is not an attorney and is not admitted to practice law in New York State.

While at the closing, it is alleged, Hill falsely claimed that Adelman’s “son” had earlier signed the contract of sale, the deed and other documents, transferring ownership of the property to the couple’s family corporation. Hill even presented them with a fraudulent death certificate for Adelman which identified her supposed son, and a fraudulent birth certificate for the “son.”

To complete the sale, the couple paid the defendants $250,000, using two bank checks for $150,000 and $125,000, along with $1,000 in cash for Hill’s “legal” fee. According to the indictment, defendant Codrington cashed the check for $150,000 using an account controlled by his company; other funds were disbursed to a company controlled by Jaikaran’s wife.

In November 2017, the couple’s family corporation was sued by Valley Capital Partners LLC, which alleged that it purchased the property from Adelman’s true heirs. One of the victims confronted defendants Jaikaran and Rampersad, in separate conversations, stating that he believed that he may have been defrauded, and, it is alleged, both defendants urged him not to report it to law enforcement.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “These defendants allegedly engaged in an elaborate scam to steal the savings of an innocent couple. I am committed to protecting homeowners and home purchasers in Brooklyn and will now seek to hold the defendants accountable for this alleged scheme. As property values continue to rise in Brooklyn, protecting residents from fraudulent real estate schemes is a top priority.”

The District Attorney identified the defendants as Defendants Jaikaran and Hill were arraigned before Brooklyn Supreme Court Justice Joanne Quinones on April 16, 2019; defendants Rampersad and Codrington were arraigned before Justice Danny Chun on April 17, 2019 and yesterday, May 21, 2019, respectively. The defendants are variously charged, in the 20-count indictment with one count of conspiracy, one count of second-degree grand larceny, two counts of first-degree identity theft, seven counts of second-degree criminal possession of a forged instrument, one count of fourth-degree conspiracy, and five counts of first-degree falsifying business records. Hill is charged with one count of practicing and appearing as an attorney at law without being admitted and registered, and Codrington is charged with one count of criminal possession of stolen property and two counts of second-degree money laundering. They face up to 15 years in prison if convicted of the top count. Codrington is being held on $30,000 bail. The other defendants were released without bail. All of the defendants were ordered to return to court on June 26, 2019.

The District Attorney thanked the New York City Sheriff’s Office for its assistance in the investigation.

The case was investigated by Detective Investigators assigned to the District Attorney’s Investigations Bureau. Detective Sergeant Teresa Russo of the New York City Sheriff’s Office, Bureau of Criminal Investigation, provided valuable assistance in the investigation.

The case is being prosecuted by Senior Assistant District Attorney Elizabeth Kurtz, of the District Attorney’s Frauds Bureau, under the supervision of Assistant District Attorney Richard Farrell, Chief of the Real Estate Fraud Unit, Assistant District Attorney Michel Spanakos, Deputy Chief of the District Attorney’s Investigations Division and the overall supervision of Assistant District Attorney Patricia McNeill, Chief.

Craig Hecht, 51, Mount Sinai, New York, has been arraigned today on an indictment in which he is charged with grand larceny and money laundering for allegedly stealing a vacant brownstone worth over $1 million in a deed fraud scheme targeting an 80-year-old Bedford-Stuyvesant homeowner.

According to the indictment, Hecht and a codefendant (who remains unapprehended) allegedly stole the deed to 260 Clifton Place, a two-story Bedford-Stuyvesant, New York, brownstone owned by an 80-year-old woman. The victim and her family lived in the residence for over three decades. In 2010, the family vacated the property after a fire made the building uninhabitable.

Hecht allegedly formed an entity called Ernestina Thomas LLC that he filed with the New York State Department of State on April 20, 2015. Ten days later, the codefendant allegedly opened a bank account called Ernestina Thomas LLC (ET). The victim did not know about or consent to any of this.

On September 18, 2015, according to the investigation, Hecht set up a closing where 260 Clifton Place was transferred to an entity called TDA Development. A deed with the victim’s forged signature, which transferred the property from her to TDA, was filed and recorded with the City Register. The bulk of the proceeds of the sale went into an ET account which the codefendant controlled.

Shortly thereafter, Hecht offered 260 Clifton Place to a prospective buyer. It is alleged that on November 5, 2015, the codefendant opened a bank account for TDA and the following day the property was transferred from TDA to the buyer at a closing for $850,000, with most of the proceeds of that sale going into the codefendant’s TDA account. From the funds allegedly stolen out of the two closings, the codefendant wired $190,000 to an account he had in Athens, Greece, withdrew another $120,000 in a series of cash withdrawals and transferred over $250,000 to an account held by Hecht’s wife.

The victim was notified of the alleged theft when a neighbor called to tell her that someone was working on the house and introduced himself as the new property owner. She then notified the District Attorney’s Office.

The defendant was arraigned yesterday before Brooklyn Supreme Court Justice Danny Chun on an indictment in which he is charged with two counts of second-degree grand larceny and two counts of second-degree money laundering. The defendant was ordered held on $150,000 bond or $75,000 cash bail and to return to court on August 14, 2019. He faces up to 15 years in prison if convicted of the top count.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “This defendant allegedly thought he could take advantage of an elderly homeowner’s absence to steal her house and sell it before she or anyone else noticed. Brooklyn’s robust real estate market continues to be an attractive target for theft and fraud. I remain vigilant in my commitment to protecting homeowners and encourage them to protect themselves by registering with the Automated City Register Information System (ACRIS) so that they are automatically informed of changes made to documents associated with their property.”

The case was investigated by Detective Investigators assigned to the KCDA Investigations Bureau. Supervising Financial Investigator Vincent Jones assisted in the investigation, as did Investigative Analyst Megan Carroll, both of the District Attorney’s Investigations Division.

The case is being prosecuted by Senior Assistant District Attorney Linda Hristova, of the District Attorney’s Frauds Bureau, with assistance from Senior Assistant District Attorney Patrick Cappock, under the supervision of Assistant District Attorney Richard Farrell, Chief of the District Attorney’s Real Estate Fraud Unit and Assistant District Attorney Michel Spanakos, Deputy Chief of the District Attorney’s Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the District Attorney’s Investigations Division.

Andrew Valles was sentenced today for operating a $2 million mortgage fraud scheme throughout Southern California.

The scheme occurred between 2012 and 2017. The defendants conspired using a fake insurance company, “SafeCare,” which promised to provide home loan services at a low monthly price to primarily Latino and African American families. During this time, the defendants would delay foreclosures and eviction actions by filing false bankruptcy and other court documents under fictitious names. They would instruct victims to deposit illegal advance fees and other large payments into a bank account controlled by the defendants. When the promised loan did not come through, they would proceed with the fabricated filings. The scheme took place in San Diego, Riverside, Orange, Los Angeles, and San Bernardino Counties in California. http://www.mortgagefraudblog.com/?s=Andrew+Valles

Today, Mr. Valles was sentenced to 13 years in state prison. Restitution was ordered in the amount of $2,342,957. Co-defendant Arnold Millman was previously sentenced to a state prison term of three years and four months.

California Attorney General Xavier Becerra made the announcement.

These con artists stole the life savings of decent Californians who thought they were making a smart decision for their homes and their families,” said Attorney General Becerra. “These actions will not be tolerated. My office will continue to identify, investigate, and prosecute those who prey on hardworking Californians to line their own pockets.

The sentencing and guilty pleas are the product of a joint investigation by the California Department of Justice, the California Department of Insurance, and the Federal Housing Finance Agency Office of the Inspector General (FHFA-OIG). A third codefendant, Jemal Lilly, pled guilty and is scheduled to be sentenced on September 4, 2019.

Richard Earl Jeffcoat, 52, Pelion, South Carolina was sentenced today to six months in federal prison and six months of home confinement after pleading guilty to Conspiring to Commit Bank Fraud.

Facts presented in court established that Jeffcoat is an accountant who was producing false documentation in support of loan applications and giving that information to an Arthur State Bank loan officer.  The officer than facilitated approvals for mortgages and other loans using the fake documents.  Some of the loans were for Jeffcoat’s family members.

Jeffcoat was involved in a total of six loans valued at $529,000.  Several are still current.  The value of the loss-to-date is approximately $45,000.

Senior United States District Court Judge Terry L. Wooten of Columbia imposed the sentence and ordered Jeffcoat to pay over $45,000 in restitution to the victim, Arthur State Bank.

United States Attorney Sherri A. Lydon made the announcement.

The United States Secret Service investigated the case.  Assistant United States Attorney Winston D. Holliday, Jr., of the Columbia office prosecuted the case.

Michael “Mickey” Henschel, 70, Van Nuys, California, a career con man pleaded guilty today in a federal fraud case stemming from a real estate scam that targeted distressed homeowners, many of whom were elderly individuals who were scammed out of their homes, losing significant equity in the properties accumulated over the course of their lifetimes and sometimes over the course of generations of home ownership.

Henschel, pleaded guilty to mail fraud in relation to the scheme that generated more than $17 million in profits and caused homeowners to suffer approximately $10 million in losses when they lost title to their homes and when they were defrauded into giving Henschel and his co-conspirators money as part of the scam. Henschel’s fraudulent conduct also caused losses to mortgage lenders and purchasers of foreclosed properties.

With another defendant pleading guilty today, a total of seven conspirators linked to Henschel’s Van Nuys-based businesses have now pleaded guilty in the scheme that used fraudulent deeds to steal properties from homeowners, and also charged homeowners illegal fees to delay foreclosure and eviction actions.

According to court documents, Henschel, who used various aliases, including “Frank Winston,” “Steve Lopez” and “Ron Berman”, and his co-conspirators tricked distressed homeowners into signing fraudulent deeds on their properties with false promises that the deeds would help homeowners protect their properties from creditors. The fraudulent deeds allowed Henschel and the others to fraudulently file documents on the titles to the targeted homeowners’ properties. For example, they filed fraudulent grant deeds that purported to convey an interest in the properties to entities that Henschel controlled. They also filed fraudulent trust deeds based on fictional loans supposedly guaranteed by the targeted homeowners and fraudulent liens that recorded an interest in the properties based on fictional debts.

Henschel and his co-conspirators benefited from the fraudulent filings in a variety of ways, including through outright theft of the properties, mortgages that co-conspirators obtained on the properties, and rental payments that they obtained from tenants living in the properties. The schemers also made money by demanding payments from the targeted homeowners to clear up the title, and from fraudulent state court civil actions that Henschel and his co-conspirators used to leverage settlement payments.

Four other defendants who worked for Henschel’s various companies recently pleaded guilty to conspiracy to commit mail fraud and bankruptcy fraud. They are:

  • Camerino “Mino” Islas, 42, North Hollywood, California;
  • Claudia “Jessica” Islas, 43, Reseda, California;
  • Juan Carlos Velasquez, 44, Sylmar, California; and
  • Eugene “Gene” Fulmer, 84, Encino, California who pleaded guilty today.

Two other individuals, Shara Surabi, 35, Burbank, California, and Lidia Alvarez, 55, Bell Gardens, California, pleaded guilty in late 2017 to federal charges related to this scheme.

The real estate fraud scheme had two parts, one involving property theft and litigation extortion, and the other involving illegal foreclosure and eviction delay.

In relation to the first aspect of the scheme, Henschel and his co-conspirators identified distressed homeowners who were in default on mortgages or were experiencing financial troubles, even though some had large amounts of equity in their properties. These homeowners were falsely told that Henschel was a sophisticated real estate investor and attorney who would purchase their properties on fair market terms, or he could help protect the homes from creditors. Henschel and the others promised distressed homeowners that they could refinance mortgages or restructure real estate holdings to insulate the properties from creditors, and that Henschel and other co-conspirators could manage the properties on an ongoing basis.

Henschel and the others convinced homeowners to sign fraudulent documents that were recorded on the titles to their homes. In some cases, these fraudulent filings were used to steal properties outright. In other cases, the conspirators exploited the fraudulent filings by initiating foreclosure proceedings and demanding money from homeowners before the properties could be sold. Henschel and his co-conspirators also leveraged the high cost of bringing and defending civil actions to extort settlement payments from homeowners, relying on the fact that it would often be less expensive for homeowners to pay money than to fight them in court.

In the foreclosure rescue part of the scheme, Henschel and his co-conspirators used fraudulent filings to charge homeowners fees to delay foreclosure and eviction actions. Henschel and the others had homeowners sign fraudulent deeds that transferred interests to debtors in bankruptcy cases – but the bankruptcies were fraudulent and used solely as part of the fraudulent scheme, not as part of any genuine effort to restructure or eliminate debts. Many of the fraudulent bankruptcies were filed in the names of fictional people and entities, and some involved stolen identities. Henschel and his co-conspirators sent fake deeds and fraudulent bankruptcy petitions to trustees to stop foreclosure sales, and they delayed evictions in a similar way, mainly by sending bogus documents to various county sheriff’s offices.

As a result of his guilty plea today, Henschel is facing a statutory maximum sentence of 20 years in federal prison. The other six defendants each face up to five years’ imprisonment. Henschel is scheduled to be sentenced by United States District Judge Virginia A. Phillips on August 12, 2019 and the four other conspirators who recently pleaded guilty are scheduled to be sentenced on August 26, 2019. Surabi and Alvarez are expected to be sentenced later this year.

As part of his plea agreement, Henschel agreed to forfeit money and property that represent proceeds of the fraudulent scheme, including more than $100,000 in cash seized from a bank account and various residential properties in the San Fernando Valley, Glendale and Pasadena.

The case against Henschel and the others are the result of an investigation by the Federal Bureau of Investigation, and the Federal Housing Finance Agency – Office of Inspector General. The United States Trustee’s Office for the Central District of California initially referred the matter for investigation and has provided substantial assistance. Also providing assistance during the investigation were the Alameda County District Attorney’s Office, the Los Angeles County Recorder’s Office, the Alameda County Recorder’s Office, and the San Diego County Recorder’s Office.

This case is being prosecuted by Assistant United States Attorneys Kerry L. Quinn and Eddie A. Jauregui of the Major Frauds Section. The forfeiture part of the case is being handled by Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture Section.