Archives For November 30, 1999

Guilty Plea in Mortgage Fraud Case

Stephanie Abbott —  September 16, 2019 — Leave a comment

Theodore Kurz, 70, New Orleans, Louisiana, pled guilty on September 12, 2019 to mortgage fraud.

According to court documents, Kurz obtained mortgages for three properties through the State of Louisiana, Division of Administration, Office of Community Development.  He then forged mortgage cancellations that he filed with the Orleans Parish Clerk of Court to falsely make it appear that the loans had been satisfied.  Kurz then obtained mortgages through a different lender, falsely claiming that there were no outstanding mortgages or liens on the properties.

Kurz faces 30 years of imprisonment, 5 years of supervised release and a $1,000,000 fine. Sentencing has been set for December 12, 2019.

The announcement was made by U.S. Attorney Peter G. Strasser.

U.S. Attorney Strasser praised the work of the Office of Inspector General for the U.S. Department of Housing and Urban Development in investigating this matter.  The prosecution of this case is being handled by Assistant U. S. Attorney G. Dall Kammer, Supervisor of General Crimes.

 

In Mortgage Fraud , ,
 permalink

Pair Indicted for Stealing Homes and Property Using Fraudulent Deeds

Stephanie Abbott —  September 16, 2019 — 1 Comment

Neill Reed and Jeric Goodrum, North Little Rock, Arkansas have been indicted for violations of the Arkansas Deceptive Trade Practices Act. Reed and Goodrum tried to manipulate Arkansas’s tax-delinquent property sale procedures by illegally filing forged deeds in order to steal property from rightful owners and then sell the property to unsuspecting consumers.

Defendants Reed and Goodrum begin the scam by locating publicly-listed tax-delinquent properties that were soon to be auctioned by the Commissioner of State Lands. Once they identify a particular tax-delinquent piece of property they want to acquire, and without the true owner’s knowledge or consent, they forge a quitclaim deed that indicates that the record owner of the property transferred their interests to Defendants. Defendants record the forged document in a county’s property records and then sell the stolen property for a price that may be thousands of dollars below the property’s actual value to unsuspecting third parties. The scam often goes unnoticed until the true owner tries to pay the taxes and reclaim the property.

Arkansas Attorney General Leslie Rutledge filed the charges.

“These fraudulent actions are costly for their victims, and in some circumstances rob children, grandchildren and families of property that should be their rightful inheritance,” said Attorney General Rutledge. “These scams hurt hard-working Arkansans, and these fraudsters must be stopped.”

The investigation was assisted by staff for the Commissioner of State Lands, Tommy Land. The suit seeks an injunction; an order imposing civil penalties; restitution for affected consumers; the suspension or forfeiture of franchises, corporate charters, licenses, permits and authorizations to do business in Arkansas and other relief against Reed and Goodrum.

Attorney General Rutledge is requesting restitution, civil penalties, and injunctive relief and demands a jury trial. Victims of these business practices should file a consumer complaint on ArkansasAG.gov or call (800) 482-8982.

In Mortgage Fraud ,
 permalink

A.G. Denounces Predatory Mortgage Loans

Stephanie Abbott —  September 12, 2019 — Leave a comment

An amicus brief has been filed today in support of a lawsuit brought by the City of Oakland against Wells Fargo. The City alleges that the bank engaged in predatory mortgage lending targeting minority communities.

The brief urged the court to affirm the district court’s denial of Wells Fargo’s motion to dismiss the lawsuit and highlighted the harmful effects of discriminatory lending practices in California.

In 2015, the City of Oakland filed a lawsuit alleging that, in violation of the federal Fair Housing Act and the California Fair Employment and Housing Act, Wells Fargo harmed the city through a pattern of illegal and discriminatory mortgage lending, heavily impacting minority community members. In particular, Oakland alleged that Wells Fargo steered minority borrowers there to loans with higher costs and risks, and refused to allow those borrowers to refinance, or would only refinance on less favorable terms compared to other similar loans, when they were no longer able to meet the terms of their original agreements. According to the first amended complaint, African-American and Latino borrowers were more than twice as likely to receive a high-cost or high-risk loan from Wells Fargo than similarly situated white customers. As a result, the city alleged, among other things, that these discriminatory practices suppressed property values in minority communities in Oakland, reduced property tax revenues, and increased the costs of providing municipal services. Wells Fargo’s motion to dismiss the case was largely denied and the bank is currently seeking review before the U.S. Court of Appeals for the Ninth Circuit.

California Attorney General Xavier Becerra made the announcement.

“Equal access to housing starts with equal and fair access to our financial institutions,” said Attorney General Becerra. “For many African-Americans and Latinos, the hardships of the mortgage crisis haven’t stopped. Our fight for economic justice continues and I’m proud to stand with the City of Oakland in this effort to combat predatory lending in our state.”

“Wells Fargo’s racially discriminatory mortgage lending practices against African-Americans and Hispanics have devastated individuals, families, and communities in Oakland, throughout California, and across the country where Wells Fargo operates, dramatically increasing foreclosures and decreasing the Black and Latino middle class,” said Oakland City Attorney Barbara J. Parker. “Evidence shows that Wells Fargo systematically provided more expensive and higher risk loans to African-American and Hispanic borrowers in Oakland and other cities who qualified for the more favorable loans that the bank offered to white borrowers. We applaud Attorney General Becerra for standing with Oakland to hold Wells Fargo accountable and stop these racially discriminatory practices.”

Attorney General Becerra is committed to tackling housing inequity in the state and throughout the country. In March and October of 2018, the California Department of Justice submitted Attorney General Becerra is committed to tackling housing inequity in the state and throughout the country. In March and October of 2018, the California Department of Justice submitted comments opposing changes proposed by the Trump Administration that would revoke key tools used to overcome entrenched patterns of residential segregation and foster inclusive communities. In July of 2019, Attorney General Becerra urged the U.S. Department of Housing and Urban Development to withdraw a proposed rule on housing assistance eligibility, which would risk eviction for tens of thousands of Californians. Attorney General Becerra also joined a coalition of attorneys general seeking to protect federal rules allowing equal and consistent access to shelters for transgender and gender nonconforming individuals.

A copy of the brief is available here.

 

In Mortgage Fraud , ,
 permalink

Man Sentenced for Transferring Deed to Himself After Forging Notary’s Signature

Stephanie Abbott —  September 11, 2019 — Leave a comment

Jordan Horsford, 29, East New York, Brooklyn was sentenced today to five months in jail and five years’ probation for stealing and attempting to sell the home of his 85-year-old neighbor, a diabetic man for whom the defendant was a part-time caretaker.

According to the investigation, in August 2016 the defendant, who was known to do odd jobs in the neighborhood, began helping the victim as needed, including carrying his wheelchair up steps and helping him get in and out of vehicles; he was paid for each task by the victim’s family.

In April 2017, the victim’s family began paying the defendant $400 a week to accept Meals on Wheels deliveries and set them out for the victim, to make sure he took his medicine and to check in on him at night.

Between June 19, 2017 and November 1, 2017, the defendant convinced the victim to sign away the deed to his home on Barbey Street, East New York, Brooklyn. The defendant told the victim he risked losing his home if he did not sign a document, and had the document notarized by a notary. The defendant then realized he needed another document notarized, but the notary refused so the defendant cut and pasted her original signature. He then recorded the deed, which had been signed over to him.

Finally, the defendant attempted to sell the house almost immediately after securing the deed, but a title company suspected foul play and refused to insure the home. The would-be purchaser then reached out to the 85-year-old victim’s family. At around the same time, the victim’s daughter, while going through her father’s mail, found a letter from the Department of Finance notifying them about documents filed relating to the property. The daughter pursued the matter with the DOF and the case was ultimately referred to the Brooklyn District Attorney’s Office for further investigation and prosecution.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “With today’s sentencing this defendant is being held accountable for preying on his elderly neighbor and abusing his trust. I urge seniors and their family members to protect their homes, especially as property values continue to rise in Brooklyn, by taking care not to sign any documents pertaining to their properties without the advice of a reputable attorney. I remain committed to prosecuting deed thefts like this and assisting all homeowners whenever possible.”

The defendant pleaded guilty to third-degree grand larceny in June and consented to an order nullifying the fraudulent recorded deed. https://www.mortgagefraudblog.com/?s=Jordan+Horsford

The case was prosecuted by Senior Assistant District Attorney Karen Turner of the District Attorney’s Frauds Bureau, under the supervision of Assistant District Attorney Gavin Miles, Counsel to the Frauds Bureau, and the overall supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the District Attorney’s Investigations Division.

 

In Mortgage Fraud , ,
 permalink

Five Defendants Indicted in Short Sale Fraud Scheme

Stephanie Abbott —  September 10, 2019 — Leave a comment

Iskyo Aronov (also known as “Isaac Aronov”), 32, Miami, Florida, Michael Konstantinovskiy (also known as “Michael Kay”), 33, Rego Park, Queens, Tomer Dafna, 48, Great Neck, New York, Avraham Tarshish, 40, Queens Village, New York and Michael Herskowitz, 40, Brooklyn, New York have been indicted for conspiracy to commit wire fraud and bank fraud, and related wire fraud counts, in connection with a scheme to defraud mortgage lenders, including the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and borrowers.

According to the indictment, between December 2012 and January 2019, the defendants conspired to defraud mortgage lenders, misleading them into approving short sale transactions at fraudulently depressed prices.  In a short sale, with the approval of the mortgage lender or servicer, a mortgage loan borrower sells his or her property for less than the outstanding balance of the mortgage loan.  The proceeds from the short sale, less approved closing costs, are applied to the outstanding mortgage loan balance owed to the lender, who typically agrees to forgive the borrower’s remaining mortgage loan balance.  Here, the defendants fraudulently manipulated the short sale process by transferring properties for prices well above the short sale prices, and failing to disclose this to the mortgage lenders and servicers.  The defendants also took steps to preclude other prospective purchasers from making higher offers for properties by failing to market properties as required by the lenders, and by filing fraudulent liens on properties.

As a further part of the scheme, the defendants provided the mortgage lenders and servicers with false and misleading information in transaction documents and failed to disclose either payments made to the borrower and others related to short sale or contemporaneous agreements to transfer the properties at inflated prices.  Many of the affected mortgage loans were insured by the Federal Housing Administration, or owned or guaranteed by Fannie Mae or Freddie Mac.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Robert Manchak, Special Agent-in-Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region (FHFA-OIG), and Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Region (HUD-OIG), announced the charges.

“As alleged, the defendants defrauded mortgage loan holders out of millions of dollars, with taxpayers saddled with much of the loss,” stated United States Attorney Donoghue.  “This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of the financial institutions and government programs that insure or guarantee the loans.”  Mr. Donoghue thanked the United States Department of Homeland Security, Homeland Security Investigations, New York Field Office (HSI), the HSI El Dorado Financial Crimes Task Force and the Internal Revenue Service, Criminal Investigation, New York, for their assistance in the ongoing investigation.

“Together with our partners in law enforcement, we have disrupted a scheme to defraud Fannie Mae and Freddie Mac. As demonstrated by this indictment, FHFA-OIG will investigate and hold accountable those who seek to victimize the government-sponsored entities supervised and regulated by FHFA,” stated FHFA-OIG Special Agent-in-Charge Manchak.

“These five individuals allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, borrowers, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners,” stated HUD-OIG Special Agent-in-Charge Scaringi.  “What makes their alleged crimes even more egregious was their artificial devaluation of properties that, when resold or ‘flipped,’ resulted in large profits.  Many of these homes were located in economically challenged areas of New York where affordable housing is at a premium.”

Konstantinovskiy, Dafna, Tarshish and Herskowitz were arrested this morning in New York, and will be arraigned this afternoon before United States Magistrate Judge Lois Bloom.  Aronov was arrested in Florida, and will appear this afternoon for a removal hearing at the federal courthouse in Miami.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face a maximum of 30 years’ imprisonment and a $1 million fine.

The case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Shannon C. Jones is in charge of the prosecution.  Assistant United States Attorney Tanisha Payne of the Office’s Civil Division is handling forfeiture matters.

In Mortgage Fraud , ,
 permalink