Archives For Mortgage Fraud

Antoni Moszczynski, 67, Madison, New Jersey, an attorney has been arraigned today on an indictment in which he is charged with grand larceny for allegedly stealing approximately $239,500 in funds he received, and was not entitled to, while representing a client in the sale of her deceased sister’s estate.

According to the investigation, in December 2019, the defendant, an attorney who is currently licensed to practice law in New York, represented the victim in the sale of her property at 584 Leonard Street, Brooklyn, New York. The victim, who was appointed executrix of her deceased sister’s estate, entered contract of sale for $2.395 million.

It is alleged that on December 2, 2019, the defendant received a wired down payment from the buyer into his escrow account in the amount of $239,500. Furthermore, it is alleged that, within a week, the defendant transferred $210,000 into his personal bank account with Wells Fargo, and within three months had withdrawn or spent the remainder of the down payment.

The victim retained a different attorney to represent the estate at the closing, which took place on June 30, 2020. The defendant was allegedly not present at the closing and has not answered calls from the victim or her attorney. To date, the defendant has not given the victim or the estate the down payment he allegedly stole.

Moszczynski was arraigned in front of Brooklyn Supreme Court Justice Danny Chun on an indictment in which he is charged with second-degree grand larceny. He was released without bail and ordered to return to court on June 29, 2021.

Brooklyn District Attorney Eric Gonzalez today made the announcement.

District Attorney Gonzalez said, “This defendant allegedly abused his power and betrayed his client to steal hundreds of thousands of dollars to which he was not entitled and has not returned despite the victim’s repeated attempts to contact him. We will now seek to hold him accountable for this flagrant and brazen theft.

If you believe that you or someone you know is the victim of fraud or theft perpetrated by the defendant, please call the District Attorney’s Action Center at (718) 250-2340.

This case is being prosecuted by Senior Assistant District Attorney Sara Walshe of the District Attorney’s Public Integrity Bureau, under the supervision of Assistant District Attorney Laura Neubauer, Chief of the Public Integrity Bureau, and Assistant District Attorney Michel Spanakos, Deputy Chief of the Investigations Division, and the overall supervision of Assistant District Attorney Patricia McNeill, Chief of the Investigations Division.

An indictment is an accusatory instrument and not proof of a defendant’s guilt

 

Pilar Rose, 58, Fresno, California was charged today with bank fraud, tax evasion, obstructing an IRS tax audit, and aggravated identity theft.

According to court documents, Rose, who managed her husband’s orthodontics practice, committed bank fraud by submitting false financial information to obtain a $1.4 million home refinance and a loan for a BMW. She committed aggravated identity theft by using an acquaintance’s Social Security number for the latter loan.

Rose evaded over $400,000 in taxes in 2014 and 2015. She then altered and produced financial records to the IRS during an audit to make personal expenses appear to be deductible business expenses.

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

This case is the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorney Joseph Barton is prosecuting the case.

If convicted of evading taxes, Rose faces a maximum penalty of five years in prison and a fine of up to $250,000. If convicted of obstructing an IRS audit, she faces a maximum penalty of three years in prison and a fine of up to $250,000. If convicted of bank fraud, she faces a maximum penalty of 30 years in prison and a fine of up to $1 million. If convicted of aggravated identity theft, she faces a penalty of two years in prison consecutive to any other sentence she may receive and a fine of up to $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Seth Andrew, 42 has been charged with wire fraud, money laundering, and making false statements to a financial institution, in connection with a scheme in which Andrew stole $218,005 from a charter school network that he founded.

As alleged in the Complaint unsealed today[1]:

In 2005, Seth Andrew helped create “School Network-1,” a series of public charter schools then based in New York City, New York.  In the Spring of 2013, Andrew left School Network-1 and accepted a job in the United States Department of Education and, thereafter, as a senior adviser in the Office of Educational Technology at the White House.  While employed at the Department of Education, and at the White House, Andrew was paid by School Network-1.  In November 2016, Andrew left his role in the White House and, shortly thereafter, in January 2017, Andrew officially severed his relationship with School Network-1.

School Network-1 comprises several charter schools throughout United States including several in New York City.  Pursuant to an agreement with the New York State Board of Regents, School Network-1’s New York-based charter schools must maintain an “escrow account” that may be accessed only if the school dissolves.  Three such escrow accounts, for three New York City-based School Network-1 schools, were opened by Andrew and other School Network-1 employees at  “Bank-1” in 2009, 2011, and 2013.  As to each of those three accounts – Escrow Account-1, Escrow Account-2, and Escrow Account-3 – Andrew was a signatory and had access to the funds in them.  However, pursuant to the charter agreement, the funds in the Escrow Accounts were reserved in case the school dissolved, and the funds could not be moved by Andrew, or anyone, without proper authorization.

After he severed his relationship with School Network-1, on March 28, 2019, Andrew entered a Bank-1 branch in New York City and closed both Escrow Account-1 and Escrow Account-2.  Bank-1 provided Andrew a bank check in the amount of $71,881.23 made payable to “[School Network-1] Charter School” (“Check-1”) and a second bank check in the amount of $70,642.98 to “[School Network-1] Harlem Charter” (“Check-2”).  Check-1 and Check-2 represented the funds that were in Escrow Account-1 and Escrow Account-2, respectively.

The same day that Andrew closed Escrow Account-1 and Escrow Account-2, Andrew entered a Manhattan branch of a different FDIC-insured bank (“Bank-2”) and opened a business bank account in the name of “[School Network-1] Charter School” (“Fraud Account‑1”).  To open that account, Andrew represented to a Bank-2 employee that he was a “Key Executive with Control of” School Network-1 Charter School, which was a lie.  Andrew then deposited Check-1 into the account but, that day, Andrew did not deposit Check-2.

Five days later, on April 2, 2019, Andrew used an ATM machine in Baltimore, Maryland, to deposit Check-2 into Fraud Account-1.  It appears Andrew waited to deposit Check-2 because it was made payable to “School Network-1 Harlem Charter” and not “School Network-1 Charter School.”  Had he tried to deposit Check-2 when he opened Fraud Account-1 it would not have been honored by Bank-2.

At the time Andrew deposited Check-1 and Check-2 into a Bank-2 bank account, Andrew was contemplating obtaining a mortgage from Bank-2 to purchase a residential property.  At that time, Bank-2 offered certain customers, as a promotion, more favorable mortgage interest rates if those customers maintained a certain amount of funds in Bank-2 accounts.  Specifically, for every $250,000 on deposit, up to a total of $1 million, Bank-2 would lower that qualifying customer’s mortgage interest rate by 0.125%.  Thus, in total, if a qualifying customer maintained $1 million or more of his/her funds in Bank-2 accounts that customer would receive a 0.5% interest rate deduction on a Bank-2 mortgage.  But to take advantage of the interest rate deduction promotion, Bank-2 required that the funds a customer deposited be funds owned by the customer or, in some instances, a business the customer owned, controlled or was lawfully associated with.  Bank-2 did not permit a customer to utilize money owned by someone else to gain the benefit of the interest rate deduction promotion.

By April 2019, because of the $142,524 Andrew deposited in Bank-2, using the money he stole from two charter schools, Andrew deposited a total of approximately $1,007,716 with Bank-2, and therefore became eligible to receive a 0.5% interest rate deduction – the largest deduction a customer could receive from Bank-2’s promotion.  Without the $142,524 deposited stolen funds, Andrew would have been eligible for only a 0.375% interest rate deduction.  On August 21, 2019, Andrew purchased a residential property located in New York, New York, for approximately $2,368,000.  To effectuate that purchase, Andrew, and his spouse, obtained a mortgage from Bank-2 in the amount of $1,776,000 with an interest rate of 2.5% –  taking full advantage of the promotion Bank-2 offered.

On October 17, 2019, Andrew closed out Escrow Account-3 and received a check (“Check-3”) made payable to “[School Network-1] Endurance” in the amount of $75,481.10.

On October 21, 2019, Andrew deposited Check-3 into an account that he opened at a third bank (“Fraud Account-2”).  Approximately one month later, Andrew obtained a check from Bank-2 for $144,473.29, which constituted the funds stolen from Escrow Account-1 and Escrow Account-2, and Andrew ultimately deposited those funds into Fraud Account-2.  Five days later, Andrew rolled the funds in Fraud Account-2 into a certificate of deposit.  That certificate of deposit matured on May 20, 2020, which earned Andrew $2,083.52 in interest.  Andrew then transferred the funds from the certificate of deposit – including the funds stolen from the Escrow Accounts – into a bank account held in the name of a particular civic organization that Andrew currently controls, thereby concealing the money’s association with School Network-1, and depositing the stolen money into an account under Andrew’s complete control.

Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), made the announcement today

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Seth Andrew abused his position as a founder of a charter school network to steal from the very same schools he helped create.  Andrew is not only alleged to have stolen the schools’ money but also to have used the stolen funds to obtain a savings on a mortgage for a multimillion-dollar Manhattan apartment.  Thanks to the FBI’s diligent work, Andrew now faces federal charges for his alleged scheme.”

FBI Assistant Director William F. Sweeney Jr. said:  “Locking into the lowest interest rate when applying for a loan is certainly the objective of every home buyer, but when you don’t have the necessary funds to put down, and you steal the money from your former employer to make up the difference, saving money in interest is likely to be the least of your concerns. We allege today that Andrew did just that, and since the employer he stole from was a charter school organization, the money he took belonged to an institution serving school-aged children. Today Andrew himself is learning one of life’s most basic lessons – what doesn’t belong to you is not yours for the taking.”

Andrew is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, one count of money laundering, which carries a maximum sentence of 20 years in prison, and one count of making a false statement to a bank, which carries a maximum sentence of 30 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of the FBI.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Ryan B. Finkel is in charge of the prosecution.

The charges in the Complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

 

Joseph A. Gonzalez, 46, Henderson, Nevada was sentenced today for his role in a scheme to use bogus information and simultaneous loan applications at multiple banks – known as “shot-gunning” – to attempt to obtain home equity lines of credit (HELOCs).

According to documents filed in the case and statements made in court:

From 2010 through 2018, Jorge Flores and Simon Curanaj, a real estate broker in the Bronx who has previously pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.

Gonzalez and Flores used a property in Jersey City, New Jersey, as part of the scheme. Gonzalez had been allowed by the owner of the property to live there in exchange for management services, but neither he nor Flores owned the property. Gonzalez also recruited an individual with good credit to act as a straw buyer (Individual 1). Unbeknownst to the owner of the property, a “quitclaim” deed – which contains no warranties of title – was prepared transferring the property to Individual 1. The signatures on the deed were forged.

Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City property as collateral in Individual 1’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Individual 1’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the property was less than the amount of the HELOC loans for which Gonzalez and Flores applied.

The victim banks eventually issued loans to Individual 1 in excess of $500,000. After the victim banks funded the HELOCs and deposited money into Individual 1’s bank account, Individual 1 disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Individual 1 eventually defaulted on both HELOC loans.

Gonzalez previously pleaded guilty before U.S. District Judge John Michael Vazquez to Count One of an indictment charging him with one count of conspiracy to commit bank fraud. Judge Vazquez imposed the sentence today by videoconference. Gonzalez is the sixth person to plead guilty as part of the scheme.

In addition to the prison term, Judge Vazquez sentenced Gonzalez to three years of supervised release and ordered him to pay restitution of $512,500.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited 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 FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

The government is represented by Jason S. Gould, Acting Chief of the Violent Crimes Unit, and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

 

Nathanael Zimmerman, 40, Wyckoff, New Jersey, was arrested today on charges of engaging in mortgage fraud, fraudulently obtaining an SBA loan, and stealing another person’s identity

According to the complaint:

From August 2013 through January 2014, Zimmerman orchestrated a scheme to engage in mortgage fraud concerning Federal Housing Administration (FHA)-insured loans. Zimmerman aided individuals in applying for FHA-insured loans and caused fraudulent representations to be made to the lenders, including submitting false bank statements. Zimmerman received a portion of the loan proceeds. Later, these unqualified individuals defaulted on their loans, causing losses to the U.S. Department of Housing and Urban Development of more than $300,000.

In 2020 Zimmerman used his deceased brother’s identity to obtain a U.S. Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL). Zimmerman received more than $150,000 by applying for EIDL funds in his brother’s name and using his brother’s personal identification information.

The charges of wire fraud affecting a financial institution and bank fraud are each punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gross profits or twice the gross loss suffered by the victims, whichever is greater. The charge of aggravated identity theft is punishable by a mandatory consecutive term of imprisonment of two years in prison and a fine of $250,000, twice the gross profits or twice the gross loss suffered by the victims, whichever is greater.

Acting U.S. Attorney Rachael A. Honig made the announcement.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Sammi Malek and Andrew Kogan of the U.S. Attorney’s Office Criminal Division in Newark.

The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.

 

Stephen Sharkey, 51, Swedesboro, New Jersey, was sentenced to four years and one month in prison, three years of supervised release, for stealing down payments for homes from two different families.

In September 2020, the defendant pleaded guilty to two counts of conspiracy to commit wire fraud, eight counts of wire fraud, one count of aggravated identity theft and, one count of money laundering in connection with three brazen and predatory frauds which greatly harmed innocent victims and netted the defendant more than $385,000. Sharkey engaged in two mortgage-closing schemes to defraud potential home buyers – stealing money that the victims had intended to use to purchase residences for themselves and their families. In the third scheme, the defendant stole all of the proceeds of the sale of a house by secretly going to closing without telling the seller.

Sharkey and his associate, Antonio Ambrosio, convinced their victims to provide Sharkey with the down payment funds in advance of the dates set for the real estate closings, with the promise that Sharkey would provide full financing for the purchases. Rather than finance the deals, Sharkey and Ambrosio simply stole the down payment money supplied by the victims and made excuses when the deals did not close. As part of the scam, Sharkey and Ambrosio even defrauded Ambrosio’s own brother-in-law out of $208,000. After receiving this money, Sharkey immediately cut checks to ARMM Investments, LLC, a company owned by George Borgesi. Borgesi and Sharkey were both convicted in United States v. Merlino, et al., 99 CR 363, an early 2000s RICO case in which the Philadelphia La Cosa Nostra was named as the enterprise. Borgesi was named as a capo of the Philadelphia LCN in that Indictment, and Sharkey was identified as a bookmaker for the mob.

After Sharkey and Ambrosio stole the down payment from Ambrosio’s brother-in-law, they proceeded to lure a second victim to use Sharkey to finance his mortgage, and the victim wired Sharkey $100,000, which Sharkey promptly converted to his own use. The deal for this property fell through, but Sharkey and Ambrosio induced the victim to send the seller an extra $25,000 to hold the deal open, claiming Sharkey would get the deal done. The victim sent the seller the $25,000, but Sharkey had already disposed of the earlier $100,000 and the deal never closed.

Finally, in the real estate fraud perpetrated on the seller victim, Sharkey promised the victim that Sharkey would sell the house belonging to the estate of the victim’s deceased parents and, after going to a closing the victim knew nothing about, Sharkey deposited all of the proceeds of the sale into his own bank account, stealing over $52,000 from the victim in the process.

Sharkey was ordered to pay $296,000 restitution and to forfeit the same amount of money.

Acting United States Attorney Jennifer Arbittier Williams made the announcement.

Sharkey’s greed impacted the lives and security of multiple families, and his shameful actions had severe consequences for these innocent people,” said Acting U.S. Attorney Williams. “Not only did he and his associate steal mortgage down payments, but he also sold a different family’s house right out from underneath them and pocketed all of the cash. For his actions, he will now spend years in prison.

Real estate fraud was just the latest racket for Stephen Sharkey,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He blatantly preyed on innocent victims here, destroying two families’ plans of buying homes and stealing a third person’s inherited property. A chunk of these fraudulent proceeds was diverted to a longtime Philadelphia mob figure, underscoring Sharkey’s continued association with organized crime. The FBI and our partners are going to keep investigating and locking up those committed to making money through illicit means.”     

This investigation once again reveals how members and associates of the Philadelphia La Cosa Nostra Organized Crime Family are constantly looking to make illicit financial gains by infiltrating legitimate business or exploiting regulatory rules as well as federal and state laws,” said Brandon Corby, Eastern Organized Crime Task Force Commander, Pennsylvania State Police. “The Pennsylvania State Police with our FBI partners are committed to eradicating this type of criminal behavior and hold those engaged in such activities accountable.”

The case was investigated by the Federal Bureau of Investigation’s Organized Crime Task Force and the Pennsylvania State Police, and is being prosecuted by Assistant United States Attorney Michael T

 

David Litman, 41, the village of Foosland, Illinois, has been ordered to report to federal prison to begin serving a two-year sentence for conspiracy to commit bank fraud and bank fraud in connection with a real estate short-sale scheme.

On Dec. 17, 2019, Litman pleaded guilty to conspiring with others, between 2008 and 2010, to defraud lending institutions in a series of short-sale transactions. Specifically, Litman caused false broker price opinions undervaluing residential properties to be submitted to financial institutions holding the mortgages of the properties, which he intended to purchase via a short sale. Litman submitted additional false documents to the financial institutions to induce them to approve requested short sales, including falsified listing agreements and proof-of-funds letters. The financial institutions, relying on the false broker price opinions, false real estate commission expenses, false listing agreements, and other false documentation, approved short sales of properties to Litman for payments that were less than they otherwise would have been likely to receive.

In addition, Litman caused the recording of false expenses, including false real estate commissions, on HUD-1 settlement statements documenting the short sales into which he entered. Litman also attempted to conceal certain of these false real estate commission expenses through the late issuance of commission checks.

Following the March 10, 2021, sentencing, U.S. District Judge James E. Shadid further ordered Litman to pay $279,900 in restitution and to serve two years on supervised release upon completion of his prison term.

The defendant’s repeated acts of fraud over several years caused lending institutions to lose a significant amount of money,” stated Acting U.S. Attorney Doug Quivey. “The defendant’s participation in the scheme thwarted the lenders’ ability to accurately value the homes involved and prevented them from recouping a greater portion of their losses on the homeowners’ mortgages. Fraud in any part of the mortgage industry ultimately costs both lenders and borrowers and can’t be tolerated.”

Assistant U.S. Attorneys Katherine V. Boyle and Eugene L. Miller represented the government in the prosecution. The charges were investigated by the Department of Housing and Urban Development’s Office of the Inspector General and the Federal Bureau of Investigation.

 

Gerald Douglas, 52, East Flatbush, Brooklyn, New York was arraigned today on an indictment in which he is charged with second-degree grand larceny for allegedly stealing the down payment toward the purchase of a Brownsville, New York home whose seller he represented.

According to the investigation, the defendant represented a 76-year-old woman in the sale of her Brownsville house, negotiating the contract for her in September 2018. A down payment of $71,700 was allegedly deposited into the defendant’s escrow account. The closing occurred in August 2019, by which time the defendant had allegedly stopped returning his client’s phone calls and she was forced to retain new counsel to close the transaction. The client received the sale proceeds at the closing, but not the down payment despite repeated requests to the defendant.

It is further alleged that in June and July 2018, the defendant asked the same client if she would loan him money, first $6,000 and then $8,000. He allegedly told her he was expecting a rental payment for a property he owned in Flatbush, Brooklyn, though in fact the property had gone into foreclosure five years earlier and he was no longer the owner.

Douglas was released without bail and ordered to return to court on May 12, 2021.

The defendant was disbarred by the Appellate Division Second Department in 2019.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said “The victim in this case was allegedly defrauded of a large sum of money by her own attorney, who had a legal duty to protect her interests. I would like to thank my Public Integrity Bureau for its hard work in seeking to hold the defendant accountable for his alleged criminal act and betrayal of trust.”

The case is being prosecuted by Senior Assistant District Attorney Adam Libove of the District Attorney’s Public Integrity Bureau, under the supervision of Assistant District Attorney Laura Neubauer, Bureau Chief, 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 Investigations Division.

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

 

Adolfo Schoneke, 43, Torrance, California and his sister, Bianca Gonzalez, a.k.a. Blanca Schoneke, 38, Walnut, California, a brother-and-sister team were arrested today on federal charges alleging they orchestrated a $6 million real estate fraud scam in which they listed homes without the owners’ consent and collected money from multiple would-be buyers for each of the not-for-sale homes.

According to the indictment, Schoneke and Gonzalez, with the help of 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. The indictment alleges Schoneke and Gonzalez found properties that they would list for sale – even though many, in fact, were not for sale, and they did not have authority to list them for sale – and they then marketed the properties as short sales providing opportunities for purchases at below-market prices.

Using other people’s broker’s licenses, Schoneke and Gonzalez allegedly listed the properties on real estate websites such as the Multiple Listing Service (MLS). In some cases, the indictment alleges, the homes were marketed through open houses that co-conspirators were able to host after tricking homeowners into allowing their homes to be used.

As part of the alleged scheme, the co-conspirators accepted multiple offers for each of the not-for-sale properties, hiding this fact from the victims and instead leading each of the victims to believe that his or her offer was the only one accepted. The co-conspirators allegedly were able to string along the victims – sometimes for years – by telling them closings were being delayed because lenders needed to approve the purported short sales.

The indictment also alleges that Schoneke and Gonzalez directed office workers to open bank accounts in the office workers’ names. 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” to these bank accounts after receiving forged short sale approval letters. Schoneke and Gonzalez also allegedly directed the office workers to withdraw large amounts of cash from these accounts and give it to them – a procedure that allowed Schoneke and Gonzalez to take possession of the fraud proceeds while hiding their involvement in the scheme.

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

Each pleaded not guilty this afternoon to nine charges contained in an indictment unsealed after their arrests. The indictment charges Schoneke and Gonzalez with one count of conspiracy, seven counts of wire fraud, and one count of aggravated identity theft.

During the arraignments this afternoon, a trial was scheduled for June 1, 2021. Both defendants will remain in custody at least until detention hearings scheduled for Friday for Schoneke and April 13, 2021 for Gonzalez.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

If convicted of all charges, Schoneke and Gonzalez each would face a statutory maximum sentence of 162 years in federal prison.

This matter was investigated by the FBI and the Federal Deposit Insurance Corporation, Office of Inspector General. 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.

This case is being prosecuted by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.

Juliana Martins, 52, North Providence, Rhode Island, has been indicted for allegedly making false statements related to her incarceration and the court-ordered requirement that she pay back the stolen money when she applied for a U.S. Federal Housing Administration-backed home mortgage.

Martins in June 2019, while serving a term of federal supervised release for having conspired to use the stolen personal identity information of numerous individuals to steal nearly $400,000 from the United States Treasury, falsely represented on a home loan application, and in July 2019 on a closing document, that there were no outstanding judgements against her, when in fact she is under court order to pay restitution to the government totaling $385,533.58.

According to the indictment, when responding to requirements to truthfully disclose to the bank her credit report, assets, liabilities, and income, Martins falsely stated to the bank that “the reason I have a job gap in my employment was because I was away on a family emergency for over two years,” when in fact during that time she was incarcerated in federal prison. Additionally, it is alleged, Martins provided a false explanation for an inquiry from the Department of Justice on her credit report.

In March 2014, Martins pleaded guilty to conspiracy to embezzle United States Treasury checks, theft of government property, and aggravated identity theft, admitting that she was a leader of a criminal enterprise that possessed hundreds of people’s personal identifying information that was used to open bank accounts into which fraudulently obtained government checks were deposited. Martins was sentenced in September 2014 to serve 48 months in federal prison to be followed by three years of federal supervised release.

On Friday, a federal grand jury returned an indictment charging Martins with making false statements on bank loan applications, announced Acting United States Attorney Richard B. Myrus and Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development – Office of Inspector General.

The indictment requires, upon conviction, that Martin forfeit to the government her interest in her North Providence house and property.

A federal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.

Martins is scheduled to appear before U.S. District Court Magistrate Judge Patricia A Sullivan on Tuesday for a supervised release violation hearing.

The case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert.