Archives For Mortgage Fraud

Aron Puretz, 53, New Jersey, pleaded guilty today to engaging in an extensive, multi-year conspiracy to fraudulently obtain over $54.7 million in loans and to fraudulently acquire multifamily and commercial properties.

According to court documents, between 2016 and 2022, Puretz conspired with others to deceive lenders into issuing multifamily and commercial mortgage loans. Puretz and his conspirators provided the lenders with fictitious documents, including purchase contracts with inflated purchase prices, fake financial statements, and other fraudulent documents. Puretz was an employee of Apex Equity Group, a real estate investment and advisory firm, and one of the owners of Maple Lawn in Eureka, Illinois, and Big Country Chateau in Little Rock, Arkansas, both multifamily properties, and Troy Technology Park in Troy, Michigan, a commercial property.

In February 2017, Maple Lawn was acquired for $4.1 million. However, Puretz and his conspirators from Apex Equity Group utilized the identity of a conspirator to present a lender and Freddie Mac with a purchase and sale contract for $5.8 million and other fraudulent documents. On Feb. 17, 2017, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $4.1 million sales price and another for the fraudulent $5.8 million sales price presented to the lender. Part of the conspiracy was to create a nonprofit entity, JPC Charities, for the purpose of receiving tax-exempt status for the properties owned by Puretz and co-conspirators. Puretz and his conspirators provided false statements to the city of Eureka, Illinois, to receive a property tax exception.

In July 2019, Puretz and his conspirators acquired Big Country Chateau. However, Puretz knew the lender and Freddie Mac would not approve him as an owner, and used the identity of an associate instead of his own. Puretz hid his ownership and involvement with the property management company from the Department of Housing and Urban Development and other federal and state agencies.

In September 2020, Troy Technology Park was acquired for $42.7 million. However, Puretz and his co-conspirators presented the lender with a fraudulent purchase and sale contract for $70 million. To support the inflated purchase price, Puretz and his conspirators submitted to the lender and appraiser a fraudulent letter of intent to purchase the property from another party for $68 million and other fraudulent documents. To conceal the fraudulent nature of the transaction, Puretz and his conspirators arranged for a short-term $30 million loan, which was used to make it appear that they had the funds needed to close on the loan. On Sept. 25, 2020, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $42.7 million sales price and another for the fraudulent $70 million sales price presented to the lender.

Puretz pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution. He is scheduled to be sentenced on Oct. 30, 2024, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Philip R. Sellinger for the District of New Jersey; Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Inspector General Brian M. Tomney of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); and Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.

FHFA-OIG and USPIS are investigating the case.

Assistant U.S. Attorney Martha Nye for the District of New Jersey and Trial Attorney Siji Moore of the Criminal Division’s Fraud Section are prosecuting the case.

 

Marilyn J. Mosby, 44, Baltimore, Maryland was sentenced today to twelve months of home confinement as part of thirty-six months of supervised release, for making a false mortgage application and two counts of perjury.

During the first twelve months of her supervised release Mosby was ordered to remain on home confinement, with electronic monitoring and forfeiture of 90% of the property purchased with the fraudulently obtained mortgage, including any appreciation.

On February 6, 2024, Mosby was convicted on the federal charge of making a false mortgage application when she was Baltimore City State’s Attorney, relating to the purchase of a condominium in Long Boat Key, Florida. Previously, on November 9, 2023, Mosby was convicted on two counts of perjury, relating to the withdrawal of funds from the City of Baltimore’s Deferred Compensation Plan claiming that she suffered adverse financial consequences during the COVID-19 pandemic while she was the Baltimore City State’s Attorney. 

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge William J. DelBagno of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.

U.S. Attorney Erek L. Barron commended the FBI and IRS-CI agents for their work in the investigation and thanked the Baltimore City Office of the Inspector General for its assistance and invaluable public service. Mr. Barron thanked Assistant U.S. Attorneys Sean R. Delaney and Aaron S.J. Zelinsky, who prosecuted the federal cases.

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.

German Antonio Lopez-Velasquez, 55, Modesto, California, pleaded guilty today to conspiring to commit bank fraud.

According to court documents, German Antonio Lopez-Velasquez, a real estate agent, worked with Lisa Santos, 48, Long Beach, California, a mortgage loan officer, and Marko Antonio Lopez, 27, Modesto, California, a real estate agent and notary public, to obtain fraudulent mortgage loans for properties based in Stanislaus, San Joaquin, and Santa Clara Counties in California, and elsewhere. The three defendants used false documents, fictional companies, and fictional individuals to obtain mortgage loans for borrowers who were not qualified to receive loans.

Santos pleaded guilty on May 13, 2024, to conspiring to commit bank fraud, and is scheduled to be sentenced on Sept. 30, 2024. Marko Antonio Lopez previously pleaded guilty and was sentenced on April 1, 2024.

Lopez-Velasquez is scheduled to be sentenced on Sept. 9, 2024, by U.S. District Judge Jennifer L. Thurston. Lopez-Velasquez faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will 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.

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

The integrity of the FHA loan program is essential to helping hard working citizens realize the American dream of homeownership,” said Special Agent-in-Charge Mark Kaminsky with the U.S. Department of Housing and Urban Development, Office of Inspector General. “HUD OIG will continue to work with its prosecutorial and law enforcement partners to vigorously pursue those who seek to jeopardize this program and the health and stability of our nation’s housing market.”

This case is the product of an investigation by the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), the U.S. Department of Housing and Urban Development – Office of Inspector General (HUD-OIG) and the U.S. Postal Inspection Service (USPIS). Assistant U.S. Attorney Jeffrey A. Spivak is prosecuting the case.

 

Mark Steven Diamond, 67, Chicago, Illinois, pleaded guilty today to a federal fraud charge for bilking elderly homeowners in a home repair and reverse mortgage scheme.

Diamond schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform.  Diamond and the co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication.  In some instances, Diamond concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work, when, in fact, the documents that Diamond caused them to sign were related to applying for the loan.  After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs.

Diamond pleaded guilty to a federal charge of wire fraud affecting a financial institution, which is punishable by up to 30 years in federal prison.  Diamond acknowledged in a plea agreement that he victimized at least 18 Chicago-area homeowners by fraudulently obtaining approximately $929,000 from financial institutions in the form of reverse mortgage loan proceeds.  It will be the government’s position at sentencing that there were at least 80 victims and that Diamond’s actions caused at least approximately $6 million in losses.  U.S. District Judge Franklin U. Valderrama set Diamond’s sentencing for Sept. 4, 2024.

The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  Substantial Assistance was provided by the Illinois Attorney General’s Office.  The government is represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.

All four co-schemers charged in the investigation – loan originators Gary Bohn, Hoffman Estates, Illinois., and Matthew Fefferman, Munster, Indiana., Diamond’s employee Cynthia Wallace, Sauk Village, Illinois., and title agency owner Forrest C. Fawcett, Fort Lauderdale, Florida. – previously pleaded guilty and admitted their roles in the fraud.  They are awaiting sentencing.

Diamond plea agreement

Christopher J. Gallo, 44, Old Tappan, New Jersey, and Mehmet A. Elmas, 32, a U.S. citizen who resides in Turkey, are charged by complaint with one count of conspiracy to commit bank fraud, in connection with their roles in a large-scale mortgage fraud scheme.

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

Gallo and Elmas were previously employed by a New Jersey-based, privately owned licensed residential mortgage lending business. Gallo was employed as a senior loan officer and Elmas was a mortgage loan officer and Gallo’s assistant. From 2018 through October 2023, Gallo and Elmas used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans. Gallo and Elmas routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates. Gallo and Elmas often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties.

By fraudulently misleading lenders about the true intended use of the properties, Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates.  The conspiracy also included falsifying property records, including building safety and financial information of prospective borrowers to facilitate mortgage loan approval. Between 2018 through October 2023, Gallo originated more than $1.4 billion in loans.

They appeared today before U.S. Magistrate Judge André M. Espinosa in Newark federal court and were each released $200,000 unsecured bond.

U.S. Attorney Philip R. Sellinger made the announcement.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s arrests.

The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic Crimes Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

Jason Trador, 46, Scott Depot, West Virginia, was convicted on April 10, 2024, of making a false statement to federal agents, willfully overvaluing property on a loan application, and three counts of making a false statement to the United States Department of Housing and Urban Development (HUD).

Evidence at trial proved that Trador fraudulently obtained a $223,870 home mortgage insured by the Federal Housing Administration (FHA) from his then-employer, Victorian Finance LLC, a mortgage lending business. At the time he applied for the FHA loan in August 2018, Trador was delinquent on paying his federal taxes for a prior tax year. Because of the tax debt, Trador was not eligible for an FHA loan under existing FHA program rules. Trador deceived Victorian Finance into approving the application and the FHA into insuring the mortgage by providing a series of falsified documents including a falsified Internal Revenue Service (IRS) tax transcript purporting to show a payoff of the delinquent $8,151 tax debt.

Trador also submitted three heavily edited bank statements to Victorian Finance. Each falsified bank statement substantially inflated the balances in Trador’s bank accounts. Two of the falsified statements reported balances of approximately $27,000 and $15,000 for Trador’s personal bank account when in fact the account had negative balances. Line items, such as for insufficient funds fees, were removed from the falsified bank statements and a line item was added to deceive Victorian Finance into believing that he had paid off the delinquent $8,151 tax debt. Evidence at trial proved the purported payoff never occurred and that Trador was still delinquent on the federal tax debt as of March 2024.

On September 4, 2018, Trador willfully overvalued his assets on a loan application when he signed a Uniform Residential Loan Application that included the false balances from the falsified bank statements.

On May 6, 2022, Trador lied to investigators with HUD’s Office of Inspector General (OIG) and the Federal Bureau of Investigation (FBI) when they interviewed Trador at his Scott Depot residence about his application for the FHA-insured mortgage. Trador denied submitting false bank statements with his loan application, and blamed his fellow employees of the mortgage lending business for the inclusion of the false bank statements in the FHA loan file.

Trador is scheduled to be sentenced on July 29, 2024, and faces a maximum penalty of 41 years in prison.

Loan officers are supposed to be gatekeepers who protect the integrity of the FHA program. Mr. Trador abused his position of trust as a loan officer and used his knowledge of FHA requirements to obtain a mortgage he knew he did not qualify for, and then lied in an attempt to conceal his scheme,” said United States Attorney Will Thompson. “I commend HUD OIG and the FBI for their investigative work in this case, and Assistant United States Attorneys Andrew J. Tessman, Jonathan T. Storage and Erik S. Goes and our trial team for prosecuting the case and securing guilty verdicts on all five counts.

The integrity of the FHA loan program is essential to helping hard working citizens realize the American dream of homeownership,” said Special Agent-in-Charge Shawn Rice with the U.S. Department of Housing and Urban Development Office of Inspector General.  “This case demonstrates HUD OIG’s enduring commitment to working with U.S. Attorney’s Office for the Southern District of West Virginia and the FBI to investigate and hold accountable those who seek to jeopardize this program and the health and stability of the nation’s housing market.  I’d like to sincerely thank the U.S. Attorney’s Office and the entire investigative team, led by U.S. Attorney Thompson, for its tireless efforts to bring this matter to a just conclusion.”

United States District Judge Robert C. Chambers presided over the jury trial.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:23-cr-117.

Zina Thomas, 60, Detroit, Michigan, was charged in a criminal complaint filed in United States District Court for her role orchestrating a fraud scheme that stole houses from dozens of Detroit residents.

The complaint charges Thomas with conspiracy to commit wire fraud, wire fraud, money laundering, and aggravated identity theft. Thomas was arrested today.

According to the complaint, Thomas, while serving as the Director of Homeownership Programs for the United Community Housing Coalition (UCHC), conspired with other individuals to steal over 30 properties across Wayne County, predominately located in the City of Detroit.  The complaint alleges that Thomas and others perpetrated a scheme to defraud by filing multiple fraudulent quitclaim deeds, frequently transferring the target properties from the victim-owners to non-existent “interim owners” before ultimately selling the properties to unwitting third parties.  It is also alleged that these fraudulent deeds were falsely notarized by Thomas or another person, which made them appear legitimate and thus enabled them to be filed with the Register of Deeds. The complaint also alleges that Thomas emailed a Wayne County Treasurer’s Office employee fake driver’s licenses and other documents, which were then uploaded into the Treasurer’s Property Tax Administration system to halt pending foreclosures.  According to the complaint, Thomas received payment for at least some of the properties via wire transfer into a bank account in the name of her realty company, and Thomas then transferred proceeds from that account to her personal bank account. And the scheme targeted low-income individuals who were facing potential tax foreclosure. According to the complaint, Thomas currently resides in one of the properties involved in the scheme.

The United Community Housing Coalition (UCHC), is a 501(c)(3) nonprofit organization providing housing assistance to Detroit’s low-income residents.  The UCHC and its executive leadership cooperated with the investigation.

United States Attorney Dawn N. Ison made the announcement.

Ison was joined in the announcement by Special Agent-in-Charge Cheyvoryea Gibson, Federal Bureau of Investigation; Special Agent-in-Charge Machelle L. Jindra, Department of Housing and Urban Development Office of Inspector General; Detroit Police Chief James E. White; and Wayne County Register of Deeds Bernard J. Youngblood.

United States Attorney Ison stated, “This scheme targeted some of our most financially vulnerable citizens and was perpetrated by an individual whose job it was to help those very people avoid losing their homes to foreclosure. This arrest is the result of a multi-agency, cooperative investigation involving both federal and state law enforcement, and is reflective of our ongoing efforts to identify and disrupt fraud schemes like this as quickly as possible.”

While working in a capacity to provide assistance to residents experiencing financial hardships, Ms. Thomas allegedly exploited individuals in the process of losing their homes,” said Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan. “The FBI and its law enforcement partners will continue to investigate these reprehensible acts of fraud.

Thomas allegedly abused her position to help fraudulently sell properties facing tax foreclosure for her own personal gain,” said Special Agent-in-Charge Machelle Jindra with the U.S. Department of Housing and Urban Development Office of Inspector General.  “HUD OIG will continue to work with its law enforcement partners to bring bad actors to justice and protect the integrity of HUD housing programs.”

I want to thank U.S. Attorney Dawn N. Ison for her continued collaboration to ensure that those who victimize Detroit residents face the fullest consequences of the law,” said Detroit Police Chief James E. White. “The DPD remains committed to addressing all aspects of crime and working with our partners across law enforcement to keep Detroiters safe.”

A rash of incoming complaints to my Deed Fraud Task Force, followed with methodical investigative teamwork, culminated in today’s announcement,” said Wayne County Register of Deeds Bernard J. Youngblood.  “Wayne County is the national leader in combating this new crimewave and we are proud to partner with local, state and federal law enforcement to protect the property rights of our citizens.”

A complaint is only a charge and is not evidence of guilt. Trial cannot be held on felony charges in a complaint. When the investigation is completed, a determination will be made whether to seek a felony indictment.

This case was investigated by the Federal Bureau of Investigation, the Department of Housing and Urban Development Office of the Inspector General, and the Detroit Police Department.  Significant investigative assistance was provided by the Wayne County Register of Deeds’ Mortgage & Deed Fraud Unit.  The case is being prosecuted by Assistant United States Attorney Ryan A. Particka.

 

Roscoe Copeland, 49, Detroit, Michigan, was sentenced yesterday to six years in prison for fraudulently conspiring to obtain over $650,000 in advance fees from borrowers seeking real estate loans.

According to court documents, Copeland, was the founder and CEO of Alexis Realty Solutions LLC (ARS), which purported to be an alternative funding source for prospective borrowers seeking loans for real estate purchases. ARS catered to customers who had poor credit ratings or were otherwise unable to qualify for a loan from retail banks or other traditional funding sources. ARS offered unrealistically competitive interest rates to their customers, including as low as 1% for a traditional 30-year fixed mortgage.

Copeland and his co-defendant, Dawnn Long, ARS’s chief operating officer, claimed that ARS was a private lender with no “middleman,” and that the company had access to specialized bond funding at discounted rates. As part of the fraudulent scheme, prospective borrowers paid ARS an upfront fee, typically 3% of the loan amount, to purportedly secure a bond necessary to obtain the loan. Copeland and Long also recruited individuals known as “consultants,” many of whom were real estate brokers or agents, to find prospective borrowers and direct them to ARS. Consultants were told that ARS would pay them a percentage of ARS’s proceeds after the loans were funded.

During the conspiracy, which lasted from approximately January 2017 to January 2018, Copeland and Long knowingly made repeated false statements to both prospective borrowers and consultants. These misrepresentations included that: (1) the advance fees paid by customers would be held in escrow; (2) the customers’ advance fees would be repaid in full if their loans did not fund within a set period; and (3) ARS was a private lender with no middleman.

In fact, not a single customer of ARS received a loan. Twenty-six prospective borrowers sent Copeland and Long over $650,000 in advance fees, the vast majority of which Copeland and Long spent on lavish personal expenses. Many of the victims suffered substantial financial hardship, including filing for bankruptcy, periods of homelessness, or delaying retirement, as a result of Copeland’s fraud scheme.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and David J. Scott, Special Agent in Charge of the FBI Washington Field Office Criminal Division, made the announcement after sentencing by Senior U.S. District Judge John A. Gibney, Jr.

Assistant U.S. Attorneys Brian Hood and Kenneth R. Simon, Jr. prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:22-cr-152.

Jeffrey M. Young-Bey, 67, Washington, D.C was found guilty today on twelve federal charges stemming from a scheme in which he used a fake notary stamp, forged signatures, and fraudulent property deeds to steal residential real estate property. The scheme generated more than $850,000 in fraudulent loans obtained through mortgages taken out against the value of the stolen real estate.

According to the government’s evidence, beginning in November 2019, Young-Bey conspired to steal a residential townhome located in LeDroit Park in order to obtain mortgage financing against the stolen property. Specifically, Young-Bey identified a target property owned free and clear by an elderly homeowner located in the District. Young-Bey then prepared a fraudulent property deed, including forged signatures of the true owners and used a fake notary stamp to make the deed appear legitimate. Young-Bey filed the deed with the District of Columbia Recorder of Deeds, transferring the title from the true owners to a corporate entity. Young-Bey passed a check to the D.C. Recorder of Deeds to pay for the transfer taxes but put a stop payment order on the check before the D.C. government could cash the check.  Young-Bey caused the fake deed to be recorded with the D.C. Recorder of Deeds and then falsely told a mortgage services business that another individual had inherited the property and wanted to take a large loan against the value of the home. Young-Bey created a fake rental lease on Rocketlawyer.com and sent the lease to the mortgage company to convince them that his associate owned the home and rented the property for profit. The mortgage company was deceived into loaning Young-Bey’s associate approximately $360,000 against the value of the home they did not own, which was split evenly between the two. Young-Bey used his half of the proceeds to buy a BMW 3-Series valued at approximately $23,000.

After succeeding on the first scam, Young-Bey executed a second fraudulent scheme on a Shephard Park property in the District, forging the names of the two owners, using the fake notary stamp, and recording the deed at the D.C. Recorder of Deeds Office. Young-Bey again put a stop payment order on the transfer tax check before it could be cashed. Young-Bey used the recorded deed to obtain a construction loan in excess of $500,000 against the value of the house.  Young-Bey took a portion of the loan and purchased a BMW 7-Series worth approximately $120,000. He promptly sold the home to a legitimate real estate company for an additional $42,000 in profit. The fraud was discovered when the real estate company began performing renovations on the home and the rightful owners were alerted to the construction and demolition by their neighbors.

The jury verdict, in U.S. District Court for the District of Columbia, was announced by U.S. Attorney Matthew M. Graves and FBI Special Agent in Charge David J. Scott of the FBI Washington Field Office’s Criminal and Cyber Division.

Young-Bey was found guilty before the Honorable Colleen Kollar-Kotelly on one count of conspiracy to commit mail fraud and bank fraud, two counts of bank fraud, two counts of mail fraud, two counts of money laundering, and five counts of aggravated identity theft. A sentencing date is pending. Young-Bey’s conspiracy and fraud convictions carry a maximum sentence of 20 years in prison. The money laundering counts carry a maximum sentence of 10 years. The aggravated identity theft charges call for a mandatory sentence of two years in prison.

This case was investigated by the FBI’s Washington Field Office with assistance from the Metropolitan Police Department. It was prosecuted by Assistant U.S. Attorneys Christopher R. Howland and Kevin L. Rosenberg of the Fraud, Public Corruption, and Civil Rights Section with the assistance of Paralegal Specialist Gina Torres. Valuable assistance was provided by Assistant U.S. Attorney Joshua S. Rothstein, former Assistant U.S. Attorney Virginia Cheatham, former Special Assistant U.S. Attorney Viviana Vasiu, and Paralegal Specialist Lisa Abbe who investigated the case. The prosecution team was also assisted by Tonya Jones from the Victim Witness Assistance Unit and Assistant U.S. Attorney Daniel Lenerz from the Appellate Section.

Marat Lerner, 41, Brooklyn, New York, the former president of a debt relief services business, pleaded guilty today to one count of wire fraud conspiracy and one count of committing wire fraud while he was on pre-trial release.  Lerner admitted that he lied to his victims and that he stole money that the victims had intended to use to pay off their home mortgages.  

According to court documents and facts presented at the guilty plea proceeding, Lerner was the owner of the “Lerner Group,” a business that claimed to provide debt relief services, including mortgage modifications, principally to the Eastern European immigrant community in Brooklyn.  Many of the victims that the defendant defrauded were already experiencing financial hardship and had specifically sought Lerner’s assistance to help reduce their monthly mortgage payments.  Lerner, in turn, promised that he could help them lower their monthly mortgage payments by working with their mortgage lenders to secure a mortgage loan modification or federal homeowner assistance.  To carry out his fraud, Lerner instructed the victims that he needed access to their bank accounts so that he could directly transmit payments to the mortgage banks on the victims’ behalf, and that the payments would be addressed to either an escrow agent that would hold the funds until their mortgages had been modified, or to entities affiliated with their mortgage lenders.  Lerner further instructed the victims not to contact their mortgage lenders directly and that he would serve as the liaison between the victims and the victims’ lenders.    

In reality, Lerner stole over $2.5 million from the victims – money that the victims had intended to use to pay their mortgages.  Once Lerner gained access to the victims’ bank accounts, Lerner transmitted funds from their accounts to companies and/or bank accounts that he himself controlled.  Lerner kept the majority of the victims’ money, spending it on personal and business expenses, including a BMW, luxury goods, and expensive meals.  To conceal his fraud, Lerner told the victims to disregard notifications from their mortgage lenders regarding delinquent payments and past due balances.  

In January 2023, Lerner was indicted by a federal grand jury in the Eastern District of New York and arrested in connection with the above fraud.  Pursuant to an order of the United States District Court for the Eastern District of New York, Lerner was released on bail and instructed, among other things, not to commit additional crimes.  However, Lerner continued to steal from his victims even after being arrested for the same conduct.  After his arrest in this case, between January 2023 and May 2023, Lerner stole at least $10,000 from his victims.  Lerner’s bail was subsequently revoked. 

As a result of Lerner’s years-long fraud, mortgage lenders have initiated foreclosure proceedings against several of the victims.  As part of his guilty plea, Lerner has agreed to pay approximately $2,554,217.11 in restitution to the victims. 

The proceeding was held before United States District Judge Nicholas G. Garaufis.  When sentenced, Lerner faces a maximum sentence of 50 years’ imprisonment.  Lerner has also agreed to pay $2,554,217.11 in restitution.   He was indicted in January 2023.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, New York Field Office (FBI), and Thomas Fattorusso, Special Agent-in-Charge, New York Field Office, Internal Revenue Service – Criminal Investigations (IRS CI), announced the guilty plea.

As he admitted today, Marat Lerner turned the victims’ American dreams into a nightmare by promising mortgage and debt relief, and instead preyed on their hard-earned life savings for his own personal gain,” stated United States Attorney Peace. “My Office will continue to protect immigrant communities against those who choose to use their positions of trust to defraud and steal from them.

Marat Lerner operated as an underground broker in his local community; but instead of completing his end of the bargain by paying their mortgages, he pocketed the money of his unsuspecting victims to live a life of luxury. This wasn’t just a money scam, this fraud affected his own community’s homes and families.  Those who fell prey to Lerner’s deceit defaulted on their mortgage payments, and some fell into foreclosure.  Today’s guilty plea and agreed restitution is just one step towards his victims getting justice, and his sentencing is the next,” stated IRS CI Special Agent-in-Charge Fattorusso.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.   Assistant United States Attorneys Nicholas Axelrod and Genny Ngai are prosecuting the case with assistance from Paralegal Specialist Jacob Menz.