Archives For Stephanie Abbott

Conviction for Mortgage Fraud And Money Laundering Scheme

Stephanie Abbott —  June 13, 2019 — Leave a comment

John F. Iacono (also known under the alias Vito Yodice), 46, and Shpresa Gjekovic (also known under the aliases Hope Gjekovic, Hope Iacono, Hope Yodice, and Shpresa Hadzovic), 32 , were sentenced today for defrauding banks throughout New York State and laundering those criminal proceeds to further their scheme.

The co defendants were convicted for mortgage fraud, money laundering and scheme to defraud after a joint investigation by the Office of the Attorney General and the New York State Police revealed that the couple utilized shell companies, forged cashier’s checks, and provided fake bank statements, W2s, paystubs, and tax returns in order to solicit over $1.3 million in loans from multiple upstate New York banks.

According to the indictment and statements made by the prosecutor in court, between April 2016 and March 2017, Iacono and Gjekovic applied for mortgages, a construction loan, personal lines of credit, personal loans, a commercial loan, a debt consolidation loan, and a Home Equity Line of Credit with fraudulent documentation that overstated their income, assets, and source of funds. The couple also created fake entities, including but not limited to JF Iacono, LLC and Iacono, LLC, and purported to have worked for them for years. In reality, these companies were created just days prior to their submissions of applications for hundreds of thousands of dollars in bank funds.

The investigation also revealed that Iacono and Gjekovic supplied over $125,000 in counterfeit cashier’s checks to financial institutions, law firms, title companies, and the sellers of a Schoharie County, New York property in order to secure financing and establish residency in the area. The couple allegedly intended to turn the Schoharie County property into a swingers club, but instead rented it out as a hunting cabin while pretending to raise money for children in need. Utilizing online postings, including on Facebook and Airbnb, they advertised the rental property.

The defendants also created a false personal financial statement showing net worth in excess of $1.1 million, with cash on hand of $400,000, while their actual account balances were in the negative. The balances on these statements were grossly inflated, as the couple never had more than a few thousand dollars in the accounts – the vast majority of which was from other loans. To support their claims, Iacono and Gjekovic also supplied fake bank statements showing counterfeit assets.

In addition, Iacono and Gjekovic concealed outstanding judgments against them totaling in excess of $1.4 million from the financial institutions from which they tried to secure loans. Moreover, the couple laundered the fraudulently-obtained loan proceeds to fund real estate transactions, utilizing at least five financial institutions during the course of the year-long scheme. In total, the couple stole over $460,000 from three financial institutions, and attempted to steal over $860,000 in additional proceeds from five financial institutions.

In December 2018, both defendants were arrested on a 19-count indictment charging Residential Mortgage Fraud in the Second Degree, Grand Larceny in the Second and Third Degrees, Money Laundering in the Third Degree, Criminal Possession of a Forged Instrument, Falsifying Business Records in the First Degree, and Scheme to Defraud in the First Degree, among other charges.

On March 29, 2019, Iacono and Gjekovic pleaded guilty before Schoharie County Court Judge George R. Bartlett, III to Residential Mortgage Fraud in the Second Degree (a class C felony), Money Laundering in the Third Degree (a class D felony), and Scheme to Defraud in the First Degree (a class E felony). Iacono and Gjekovic’s pleas resolve additional alleged crimes of money laundering, grand larceny, forgery, and identity theft for which the defendants could have been charged in Albany, Delaware, Greene, Kings, Otsego, Queens, and Rensselaer Counties.

Attorney General Letitia James and State Police Superintendent Keith M. Corlett made the announcement.

“Iacono and Gjekovic falsified document after document in order to pad their own pockets,” said Attorney General Letitia James. “Let this serve as a warning to all of those who try to carry out such deliberate schemes: There is no place in this state for individuals who try to cash in at the expense of hardworking New Yorkers. I thank the State Police for their bringing accountability and justice to this elaborate and deceitful plot.”

“This couple knowingly defrauded financial institutions and businesses, and preyed on the public’s philanthropy, all to fill their pockets and satisfy their greed,” said New York State Police Superintendent Keith M. Corlett. “This sentencing brings justice and should remind those thinking of carrying out these types of schemes, that you will be held accountable. Thank you to the Attorney General’s Office, our State Police Financial Crimes Unit and other law enforcement partners for their hard work in exposing this plot.”

The case is being prosecuted as part of Attorney General James’ Combatting Upstate Financial Frauds and Schemes (“CUFFS”) Initiative, led by Assistant Attorney General Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative was created to assist local law enforcement and District Attorney’s Offices in the investigation and prosecution of complex financial crimes and money laundering cases such as this one.

Attorney General James thanks the New York State Police Financial Crimes Unit and State Police Bureau of Criminal Investigations, as well as Schoharie County District Attorney Susan J. Mallery for their valuable assistance on this investigation.

This case is being prosecuted by Assistant Attorney General Philip V. Apruzzese, with the assistance of Legal Support Analysts Kira M. Russom, Caitlin Carmody and Samantha Wintner and Supervising Analyst Paul Strocko. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo. The Criminal Division is led by Chief Deputy Attorney General José Maldonado.

The OAG investigation was conducted by Investigator Mark J. Terra, under the supervision of Supervising Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by First Deputy Chief Investigator John Reidy.

 

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Businessman Indicted for Bank Fraud and Identity Theft

Stephanie Abbott —  June 6, 2019 — 1 Comment

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.

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A.G. Announces Payments To Borrowers From Settlement With PHH Mortgage Corporation

Stephanie Abbott —  June 3, 2019 — 8 Comments

A settlement agreement was reached today with 800 New Yorkers for a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation.

The settlement agreement reached by 49 states, the District of Columbia and 45 state mortgage regulators resolves allegations that PHH, the nation’s ninth largest non-bank residential mortgage servicer, improperly serviced mortgage loans from January 1, 2009 through December 31, 2012. The $45 million settlement includes $30.4 million in payments to borrowers, and additional payments to states and mortgage regulators for costs and fees related to the investigation.

Over 800 New York borrowers applied for payments. Rust Consulting, the settlement administrator, issued checks to claimants on Friday, May 31, 2019. Borrowers who lost their homes to foreclosure during the eligible period will receive approximately $1,500, and borrowers referred (but did not ultimately lose their home) to foreclosure will receive approximately $540. Total payments to New York State borrowers exceeds $666,000.

The settlement agreement also requires PHH to adhere to comprehensive mortgage servicing standards, conduct audits, and provide audit results to a committee of states. The settlement does not release PHH from liability for conduct that occurred beginning in 2013.

Attorney General Letitia James made the announcement.

“Today, homeowners who were unfairly and unwittingly victimized receive a piece of justice that they deserve,” said Attorney General Letitia James. “It is unfortunate that New York homeowners were victimized by improper mortgage servicing in the first place, but are at least now receiving the financial compensation owed to them. We will continue to use every resource at our disposal to reverse the damaging practices that helped to create the foreclosure crisis, and hold bad-acting mortgage companies accountable.”

“Empire Justice Center applauds Attorney General Letitia James for representing New York homeowners in the recent multi-state settlement with PHH Mortgage Corporation,” said Kirsten Keefe, Senior Attorney and Program Director for HOPP Anchor Partner Program at the Empire Justice Center. “The settlement requires PHH to clean-up its mortgage servicing practices so that they help, rather than harm homeowners. In addition, over 800 New Yorkers will share in a total of cash payments of more than $660,000. Fortunately in New York State, many homeowners who might have otherwise lost their homes because of the misconduct of PHH, received assistance from housing counseling and legal service providers funded through the Attorney General’s Homeowner Protection Program (HOPP) and so remain in their homes. We are very fortunate to have an Attorney General who is continuing to press for the rights of New York’s homeowners and communities.”

“We commend the Attorney General’s office for holding mortgage servicer’s accountable for their actions to protect New Yorker’s homes, which is their largest and most important asset,” said Susan Boss, Executive Director of The Housing Council at PathStone. “Along with the A.G’s office, we will continue to advocate for all New York homeowners.”

“We are thankful to Attorney General James for her dedicated support of New York homeowners,” said Christie Peale, CEO and Executive Director of the Center for NYC Neighborhoods. “This settlement provides direct compensation to hundreds of families, some of whom lost their homes to foreclosure during the financial crisis. Just as importantly, it shows that New York State will hold other mortgage lenders and servicers accountable for fully complying with all servicing regulations, and treating homeowners equitably.”

The case was handled Deputy Bureau Chief Laura J. Levine under the supervision of Bureau Chief Jane M. Azia in the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General of Economic Justice Christopher D’Angelo.

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Two Men Admit Roles in Fraud Scheme

Stephanie Abbott —  May 31, 2019 — Leave a comment

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.

 

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Four Indicted In Mortgage Fraud Scheme

Stephanie Abbott —  May 22, 2019 — 2 Comments

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.

 

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4 Indicted for Stealing $276,000 From Couple Who Thought They Were Buying a House

Stephanie Abbott —  May 22, 2019 — 1 Comment

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.

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Man Indicted for Forging Deed

Stephanie Abbott —  May 22, 2019 — Leave a comment

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.

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A. G. Announces Sentencing in $2 Million Mortgage Fraud Scheme

Stephanie Abbott —  May 16, 2019 — Leave a comment

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.

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Man Pleads Guilty To Homeowner Relief Fraud

Stephanie Abbott —  May 7, 2019 — Leave a comment

Eliseo Delgado Jr., 40, Corona, California plead guilty on Monday to federal charges for fraudulently obtaining tens of thousands of dollars in mortgage assistance benefits under the portion of the Troubled Asset Relief Program (TARP) intended for homeowners hardest hit by the 2007-09 economic downturn.

Delgado made the first known guilty plea by an individual to fraud charges regarding TARP’s mortgage assistance program.

According to court documents, in November 2014, Delgado knowingly submitted a false application for homeowner relief benefits under the Unemployment Mortgage Assistance Program (UMA).

Delgado’s November 2014 application for homeowner relief benefits fraudulently stated that Delgado’s income had been reduced because of unemployment. In a “hardship letter” in support of his application for UMA benefits, Delgado wrote, “I have lost my job…I fell behind on my mortgage payments in 01/01/2014, earlier this year due to lack of income.” In fact, from 2009 to 2016, Delgado was self-employed at various businesses he had founded, and at no point was he unemployed. In total, Delgado fraudulently received $52,373 in UMA benefits from January 2015 until June 2016 – 18 months, the maximum length of time permissible under the program, according to court documents.

UMA was a federally funded program under TARP that was administered in California by the California Housing Finance Authority’s Mortgage Assistance Corporation under the name “Keep Your Home California.” The program was designed to help homeowners by providing temporary mortgage assistance to eligible low-to moderate-income homeowners who became unemployed. Congress passed TARP to stabilize the nation’s financial system during the financial crisis of 2008. In 2010, using TARP money, Congress established the Hardest Hit Fund (HHF), to provide targeted aid to families in states hit hard by the economic and housing market downturn.

United States District Judge Jesus G. Bernal has scheduled an October 28, 2019 sentencing hearing, where Delgado faces a statutory maximum sentence of five years in federal prison.

This case was investigated by SIGTARP and is being prosecuted by Assistant United States Attorney Benjamin Weir of the Riverside Branch Office.

About SIGTARP

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) is a federal law enforcement agency that targets crime at financial institutions or in TARP housing programs and is an independent watchdog protecting the interests of the America people. SIGTARP investigations have resulted in the recovery of $10 billion and 278 defendants sentenced to prison.

To report a suspected crime related to TARP, call SIGTARP’s Crime Tip Hotline: 1-877-744-2009. To receive alerts about reports, audits, media releases, and other SIGTARP news, sign up at

www.SIGTARP.gov. Follow SIGTARP on Twitter @SIGTARP.

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