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Attorney Sentenced to Prison for Fraud

Stephanie Abbott —  May 25, 2022 — Leave a comment

Tiffany Dawn Russell, North Carolina was sentenced to 63 months today for her role in an extensive multi-year fraud conspiracy and was sentenced to 36 months for filing a false tax return.

Russell was originally indicted in November 2020 for conspiracy to commit bank fraud, bank fraud, access device fraud, and misuse of a social security number. According to the Indictment, Russell and her co-conspirators applied for loans and credit cards with social security numbers that were not issued to them by the Social Security Administration.  By doing so, they created new credit profiles or synthetic identities for themselves to open financial accounts and make purchases from retailers without any intention of paying for the items and services obtained.  Russell was charged with using a synthetic identity to purchase a BMW and to obtain a credit card which she used to pay for her 2016 butt augmentation surgery.

Russell also provided fabricated documents when applying for mortgages to purchase three properties, including an oceanfront residence in Nags Head, North Carolina.  Russell gave doctored bank statements and inflated pay stubs to make it appear she had substantial liquid assets and the ability to pay the loans.

In addition to using synthetic identities, Russell also embarked on a scheme of credit washing to remove legitimate debt accounts from her credit history by falsely claiming she was the victim of identity theft and had not opened those accounts.  Once the credit reporting agencies removed those accounts, her credit score improved, enabling her to obtain credit.

Finally, between March 30, 2020 and June 29, 2020, Russell and others fraudulently obtained more than $1 million in loans under the CARES Act, which was enacted by Congress to provide emergency financial assistance to millions of Americans suffering from the COVID-19 pandemic.  The ten loan applications, including two for her law firm, contained false representations relating to the number of employees, monthly payroll, revenue, and expenses.

Russell used these illegally-obtained proceeds to make the down payment on her Nags Head property and purchase five other properties in North Carolina, Maryland and Alabama.  Russell also used these ill-gotten gains to pay outstanding personal debt, unrelated to any business entity.

These sentences will be served concurrently. Earlier this year, Russell pled guilty to charges relating to her efforts to obtain more than $2.5 million from at least 12 financial institutions and the United States Small Business Administration.  In addition to her prison sentences, Russell was ordered to forfeit more than $2 million in fraud proceeds.

Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III.  The Federal Bureau of Investigation and the Internal Revenue Service investigated the case and Assistant U.S. Attorney Susan B. Menzer was the prosecutor.

“This defendant spent years defrauding banks and the federal government, and now she’ll be spending years behind bars,” said U.S. Attorney Michael Easley. “As Judge Dever noted at sentencing, this was more than a one-off mistake, it was a multitude of bad decisions by an attorney who knew better. This fraud scheme is even more egregious because the defendant falsely obtained more than $1 million in COVID-relief funds intended to help legitimate, hard-working business owners weather the pandemic. Money intended to keep businesses afloat was instead used to purchase beach homes and support the defendant’s personal interests. I commend the many law enforcement partners on our EDNC Covid Fraud Task Force who helped to ensure that attorney Tiffany Russell faced justice.”

On May 17, 2021, the United States Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. The Eastern District of North Carolina’s COVID Task Force is a part of this effort to coordinate fraud-related investigations and prosecutions in Eastern North Carolina. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-cr-00505-D-3.

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A.G.’s Office Collects Restitution from Defendant in Mortgage Fraud Scheme

Stephanie Abbott —  May 24, 2022 — Leave a comment

The Financial Litigation Program (FLP) of the U.S. Attorney’s Office for the Northern District of Ohio collected $333,549.82 in restitution from a defendant convicted of participating in a $40 million mortgage fraud scheme.

According to court records, a notice of judgment satisfaction was approved for Defendant John J. Dubay on Monday, May 23, 2022.  In 2014, Dubay was convicted by a jury of bank fraud and conspiracy to commit bank fraud.  Dubay and others were part of a mortgage fraud conspiracy involving dozens of properties along Florida’s Gulf Coast.  As part of the scheme, Dubay and others acted as straw buyers who made false statements, misrepresentations and other omissions in the mortgage loan application process.

As a result of the scheme, Dubay and others obtained numerous home mortgage loans under false and fraudulent pretenses with a total face value of approximately $40 million, many of which ended up in default and foreclosure.

Dubay was sentenced to prison in September 2015 and ordered to pay $333,549.82 in restitution for his role in the conspiracy.

Acting U.S. Attorney Michelle M. Baeppler made the announcement.

This case was investigated by the FBI.  The financial litigation was handled by Assistant U.S. Attorney Suzana K. Koch.  This case was criminally prosecuted by Assistant U.S. Attorneys Robert J. Patton and Om Kakani.

The U.S. Attorney’s Office is responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.

While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

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Mortgage Loan Officer Charged With Bank Fraud and Aggravated Identity Theft

Stephanie Abbott —  May 23, 2022 — Leave a comment

Evelisse Hernandez, 40, Kissimmee, Florida has been charged with four counts of bank fraud and four counts of aggravated identity theft.

According to the indictment, Hernandez, in her capacity as a licensed mortgage loan officer, created and executed a mortgage fraud scheme targeting the financial institution where she worked. To ensure that otherwise unqualified borrowers were approved for mortgage loans, Hernandez falsified the borrower’s income through completely fabricated or inflated monthly child support payments on mortgage loan applications that she signed and certified to the financial institution’s underwriting department. In furtherance of her scheme, Hernandez created fictitious Final Judgments of Dissolution of Marriage showing the borrowers were entitled to receive non-existent monthly child support payments. Hernandez then used the names of Judges from the Circuit Court of the Ninth District of Florida and forged their signatures on the fabricated Final Judgments of Dissolution of Marriage. Hernandez then created bogus Florida Department of Revenue Statements showing the party purportedly paying monthly child support payments to the borrowers and manufactured phony prepaid debit card statements showing the borrowers purportedly withdrawing the non-existent monthly child support payments. In most cases, the borrowers did not have the children listed or had never been married. Hernandez submitted bogus paperwork to the financial institution to support the false monthly income on the loan applications. Based on Hernandez’s misrepresentations, the financial institution approved and funded the mortgage loans.

If convicted, she faces up to 30 years in federal prison on each bank fraud count and a mandatory consecutive 2 years’ imprisonment on the aggravated identity theft counts. The indictment also notifies Hernandez that the United States is seeking an order of forfeiture in the amount of $130,000, representing the proceeds of the charged criminal conduct.

United States Attorney Roger B. Handberg made the announcement.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, U.S. Department of Housing and Urban Development – Office of Inspector General and the Florida Office of Financial Regulation. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

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Business Owner Pleads Guilty to Conspiracy to Commit Wire Fraud re: the Sale of Two Baltimore Properties

Stephanie Abbott —  May 20, 2022 — Leave a comment

Philip Abramowitz, 50, Pikesville, Maryland, pleaded guilty yesterday to conspiracy to commit wire fraud in relation to the sale of two Baltimore properties.

According to his guilty plea, from May 2016 to April 2017, Abramowitz and others conspired to defraud two financial institutions by fraudulently obtaining Federal Housing Administration (FHA) loans and property under false pretenses.  Specifically, Abramowitz used his company 163 N. Potomac St., LLC., to facilitate the fraudulent sales of his Potomac Street, Baltimore, Maryland properties.

For example, in May 2016, Abramowitz sold one of his Potomac Street properties (Property 1) to a family member (Relative 1) and entered into an agreement with Relative 1 to purchase the property using an FHA-insured loan.  The FHA is part of the U.S. Department of Housing and Urban Development (HUD) and provides mortgage insurance on loans made by FHA-approved lenders.  To qualify for the FHA-insured loans, the buyer must use the residence as their primary residence, disclose any familial or business relationship between the seller and buyer, and disclose the source of the money the buyer intends to use for the down payment and closing costs.

As stated in his guilty plea, Relative 1 applied for and received a $294,566 FHA-insured loan with a mortgage company (Mortgage Company 1) by falsely representing Abramowitz’s bank account records as his own.  Relative 1 and Abramowitz also concealed their familial relation from Mortgage Company 1 by submitting false company filings during the loan application process, having Abramowitz’s property manager (Property Manager 1) pose as the sole seller and manager of 163 N. Potomac St., LLC and arranging Property Manager 1 to sign the FHA-loan contact as the official seller of the property.  Abramowitz’s ownership of 163 N, Potomac St., LLC. or involvement in the sale was never disclosed.

To meet the requirements of the loan procurement process, Abramowitz gave Relative 1 $10,500 to pay for the closing costs for Property 1 as Relative 1 did not have the financial means to make the purchase.   Based on the fraudulent financial information presented during the loan application process, Mortgage Company 1 loaned Relative 1 $294,566 for the purchase of Property 1.  The majority of the loan proceeds were subsequently deposited into Abramowitz’s bank account.  Ultimately, Relative 1 never used Property 1 as a primary residence and rented the property to tenants for a year before ceasing mortgage payments and allowing the property to fall into foreclosure.

Further, Abramowitz arranged the sale of his second Potomac Street property (Property 2) in March 2017 to another family member (Relative 2) using an FHA-insured loan.  To facilitate the sale of Property 2, Relative 2 applied for an FHA-insured loan with another mortgage company (Mortgage Company 2).  Using the same manner to defraud Mortgage Company 1, Abramowitz concealed his familial relation to Relative 2, falsely listed his property manager as the sole seller and owner of Property 2 and submitted multiple fraudulent documents to Mortgage Company 2, including an LLC affidavit of title asserting that no other person or entity had ownership in Property 2.

In a similar manner as the sale of Property 1, Abramowitz violated FHA-loan requirements by providing Relative 2 $8,750 for the closing costs of the sale, misrepresented his own bank account information as Relative 2’s in the FHA-loan procurement process, and received the majority of the loan proceeds to his personal bank account.  Relative 2 never used Property 2 as a primary residence or paid monthly mortgage payments to Mortgage Company 2 which caused the property to fall into foreclosure.

Abramowitz faces a maximum of 30 years in prison followed up by 5 years of supervised release for conspiracy to commit wire fraud.  U.S. District Judge Richard D. Bennett has scheduled sentencing for August 9, 2022, at 2:30 p.m.

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Agent in Charge Shawn A. Rice of the U.S. Department of Housing and Urban Development Office of Inspector General.

As part of his guilty plea, Abramowitz will be ordered to pay $373,684 in restitution.

United States Attorney Erek L. Barron commended HUD-OIG for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the federal case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

 

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Former Head of Chamber of Commerce Named in Complaint Alleging False Statements on Loan Application

Stephanie Abbott —  May 17, 2022 — Leave a comment

Todd Ament, 57, Orange, California, the former president and CEO of the Anaheim Chamber of Commerce is expected to appear this afternoon in federal court after being charged with lying to a mortgage lender about his assets while seeking a loan for a $1.5 million home in the San Bernardino Mountains.

Ament was charged in a 99-page criminal complaint filed Monday afternoon in United States District Court with making false statements to a financial institution while seeking funding in late 2020 to purchase a second home, a five-bedroom residence in Big Bear City, California.

The affidavit in support of the criminal complaint outlines a plot in which Ament – with the assistance of a political consultant who was a partner at a national public relations firm – devised a scheme to launder proceeds intended for the Chamber through the PR firm into Ament’s bank account. This infusion of cash – which appears to have been a loan from the PR firm engineered by the political consultant – allegedly influenced the lender’s decision to fund the mortgage.

The scheme led to a series of wire transfers from the PR firm that ultimately gave Ament $205,000 and made it appear he had enough cash on hand to secure the home loan, according to the affidavit. Ament allegedly used some of that money for the down payment, and some was used to make an out-of-escrow payment to the seller. The affidavit states that Ament made a $200,000 payment directly to the seller in an apparent effort to reduce the sale price of the house, thus reducing property taxes and lowering the commission to the seller’s real estate agent, the affidavit states.

An investigation outlined in the affidavit revealed that Ament and the political consultant had a close relationship for several years, one that included leading a small group of Anaheim public officials, consultants and business leaders. That group –described by Ament and the political consultant as a “family” and a “cabal” – met regularly at “retreats” to allegedly exert influence over government operations in Anaheim, according to the affidavit.

Ament and the political consultant also allegedly devised a scheme to divert proceeds intended for the Chamber through the PR firm and into Ament’s personal bank account. The affidavit alleges that Ament and the political consultant schemed to defraud a cannabis company that had retained the political consultant to lobby for favorable cannabis-related legislation in Anaheim. The cannabis company paid $225,000 to the Chamber with the understanding that it would have access to a task force that crafted such legislation, but at least $31,000 of that money was paid directly to Ament without those payments being disclosed to the client, the affidavit alleges.

The charge of making false statements to a financial institution carries a statutory maximum sentence of 30 years in federal prison.

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The FBI and IRS Criminal Investigation are conducting the investigation in this matter.

Assistant United States Attorneys Daniel H. Ahn, Daniel S. Lim and Melissa S. Rabbani of the Santa Ana Branch Office are prosecuting this case.

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Man Sentenced to Prison for Quitclaim Deed Fraud

Stephanie Abbott —  May 10, 2022 — Leave a comment

Alireza Zamanizadeh, aka Ali Zamani, 63, Portland, Oregon was sentenced today to 18 months in federal prison and five years’ supervised release for using a residential property he did not own as collateral for obtaining a bank loan worth more than $316,000.

According to court documents, on or about February 17, 2017, Zamanizadeh filed a quitclaim deed in Deschutes County, Oregon transferring a residential property in Bend, Oregon to his business for one dollar without the property owner’s consent. A quitclaim deed is a document used to quickly transfer the ownership of real property from one party to another.

Zamanizadeh then used the property as collateral for obtaining a loan worth $316,092 from a mortgage lender and forged the property owner’s signature on a statement verifying the property transfer. Based on his false representations, the mortgage company approved the loan and transferred the funds to Zamanizadeh’s bank account. After Zamanizadeh defaulted on the loan, the true owner of the property purchased the property out of foreclosure for $400,000.

On June 14, 2021, Zamanizadeh was charged by criminal information with bank fraud and aggravated identity theft. On September 14, 2021, he pleaded guilty to bank fraud.

The court also ordered Zamanizadeh to pay $400,000 in restitution to the owner of the property.

U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.

This case was investigated by IRS-Criminal Investigation with assistance from the FBI. It was prosecuted by Katherine A. Rykken, Assistant U.S. Attorney for the District of Oregon.

 

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Leader of Mortgage Fraud Scheme Sentenced to Prison

Stephanie Abbott —  May 10, 2022 — Leave a comment

James Christopher Castle, 57, formerly of Petaluma, California was sentenced today to 15 years in prison for a bank fraud scheme that sought to fraudulently eliminate home mortgages and then profit on the subsequent home sales.

According to evidence at trial, in May 2020, Castle was extradited to the United States from Australia. Castle had fled to New Zealand and then Australia in 2011 when it became clear that his scheme was unraveling. After a three-year extradition process, Castle was transported back to the United States by the U.S. Marshals Service to stand trial in the United States.

Between April 22, 2010, and November 18, 2011, Castle was the leader of a conspiracy that ran a “mortgage elimination program” that purported to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of title on residential properties, sold the properties, and received the sales proceeds.

As a requirement for participation in the “mortgage elimination program,” the conspirators enrolled homeowners as members in a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity Pillow Foundation. The conspirators told the homeowners that these entities would offer protection against the banks.

Castle directed other co-conspirators in all aspects of the mortgage elimination program, including recruiting homeowners into the scheme, marshaling the necessary recorded documents, and guiding the homes through sale. Once the homeowner enrolled with Shon-te-East-a or Pillow Foundation, Castle would cause a sham deed of trust to be created and recorded, giving the impression that the homeowner had refinanced the mortgage loan with a new lender. In reality, the new lender was a fake entity controlled by the conspirators, and the homeowner owed no money to the purported new lender.

The next step in the process was also a recorded document. The conspirators caused a fake deed of reconveyance to be recorded, giving the appearance that the true mortgage loan had been discharged and that the true lienholder no longer had a security interest in the home.

With title appearing to be clear, the conspirators caused the sale of the home and split the proceeds between the co-conspirators and the homeowners.

In total, 37 properties were sold through the Shon-te-East-a conspiracy. The conspirators recorded fraudulent documents on an additional approximately 100 homes but were unable to sell these before the scheme unraveled.

On Aug. 2, 2021, a jury found Castle guilty of 35 counts of bank fraud.

U.S. Attorney Phillip A. Talbert made the announcement.

Three other co-defendants have previously entered guilty pleas. On April 21, 2017, Remus A. Kirkpatrick, 65, formerly of Oceanside, California pleaded guilty to one count of falsely making writings of lending associations and was sentenced to six years in prison. On May 26, 2017, Michael Romano, 75, Benicia, California pleaded guilty to conspiracy and was sentenced to three years in prison. On July 14, 2017, Laura Pezzi, Roseville, California pleaded guilty to falsely making writings of lending associations and was sentenced to time served.

In related cases, on September 4, 2015, Tisha Trites and Todd Smith, both of San Diego, California pleaded guilty to related charges. Trites is scheduled to be sentenced on June 14, 2022, and Smith was sentenced to two years in prison.

Two other co-defendants, George B. Larsen, 60, San Rafael, California and Larry Todt, 70, Malibu, California were convicted of conspiracy and bank fraud following a jury trial in December 2017. Larsen was sentenced to 10 years in prison, and Todt was sentenced to 7 years and three months in prison.

Co-defendant John Michael DiChiara passed away on August 24, 2019, while awaiting trial.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Audrey B. Hemesath is prosecuting the case.

 

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Man Pleads Guilty in a Real Estate Scam Involving Fake Open Houses at Not-for-Sale Homes

Stephanie Abbott —  May 2, 2022 — Leave a comment

Adolfo Schoneke, 44, Torrance, California  pleaded guilty today to a federal criminal charge for participating with his sister in a $6 million real estate scam that involved listing homes without the owners’ consent and collecting money from multiple would-be buyers for each of the not-for-sale homes.

On April 4, 2020, Schoneke’s sister, Bianca Gonzalez, 39, a.k.a. Blanca Schoneke, pleaded guilty to the same criminal charge.

According to court papers, from November 2013 to December 2016, Schoneke and Gonzalez, along with co-conspirators, operated real estate and escrow companies based in Cerritos, La Palma and Long Beach, California under a variety of names, including MCR and West Coast Realty Services. Schoneke, Gonzalez and other co-conspirators found properties that they would list for sale – even though they did not intend to sell them to anyone.

The properties were listed on real estate websites such as the Multiple Listing Service (MLS) and were marketed as below-market short sales opportunities. In some cases, the homes were marketed through open houses arranged by tricking homeowners into allowing their homes to be used.

Multiple offers were accepted for each of the not-for-sale properties, but the co-conspirators hid this fact from the victims and instead led each victim to believe that his or her offer was the only one accepted. The co-conspirators strung victims along – sometimes for years – by telling them closings were being delayed because lenders needed to approve the purported short sales.

At the co-conspirators’ direction, office workers opened bank accounts to hide the co-conspirators’ involvement in the fraud. Those accounts were used to receive down payments on the homes and other payments from victims who were convinced to transfer the full “purchase price” after receiving forged short sale approval letters. The co-conspirators directed the office workers to withdraw large amounts of cash from these accounts, which made the proceeds harder to trace.

Investigators estimate that several hundred victims collectively lost more than $6 million during the scheme.

A co-conspirator, Mario Gonzalez, 50, was charged in a related case and pleaded guilty in January 2019 to conspiracy to commit wire fraud. His sentencing is scheduled for October 3, 2022.

Adolfo Schoneke pleaded guilty to one count of conspiracy to commit wire fraud and Bianca Gonzalez’s sentencing hearing is scheduled for October 3, 2022.

United States District Judge R. Gary Klausner has scheduled an August 8,2022 sentencing hearing, at which time Schoneke will face a statutory maximum sentence of 20 years in federal prison.

The FBI and the Federal Deposit Insurance Corporation, Office of Inspector General investigated this matter. The investigation was initiated by numerous complaints to the Long Beach Police Department and the Los Angeles County Sheriff’s Department, both of which provided substantial assistance during the federal investigation.

Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section is prosecuting this case.

 

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