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10 Indicted for Timeshare Mortgage Fraud Scam

Allison Tussey —  January 25, 2013 — 3 Comments

10 individuals have been indicted on 44-counts for their alleged roles in a mail and wire fraud conspiracy involving timeshare mortgages.

The six indicted defendants from New Jersey include: Adam Lacerda, 28, and his wife, Ashley R. Lacerda, 32, Egg Harbor Township; Ian Resnick, 37, Absecon; Steven Cox, 48, Ventnor City; Francis Santore, 52, Northfield; and Joseph Diventi, 32, Somers Point.

Also indicted are Alfred Giordano, 32, Hurry County, South Carolina; Brian Corley, 27, Little River, South Carolina; Joseph Saxon, 38, St. Thomas, Virgin Islands; and Genevieve Manzoni, 46, Lake Worth, Florida. The indictment was returned by a federal grand jury on January 23, 2013.

Ian Resnick, Joseph Saxon, and Genevieve Manzoni previously were charged by criminal complaint. Adam Lacerda, Ashley R. Lacerda, Steven Cox, Alfred Giordano, Francis Santore, Brian Corley, and Joseph Diventi previously were indicted on the same charges by a federal grand jury sitting in Trenton on May 3, 2012.

The defendants are expected to be arraigned before U.S. District Judge Noel L. Hillman in Camden, New Jersey, federal court in the coming weeks.

According to the superseding indictment and the Complaints previously filed:

In July 2010, law enforcement officers commenced an investigation into The Vacation Ownership Group, a/k/a VO Group LLC. The investigation revealed that beginning at least from March 2009 and continuing to September 1, 2011, the defendants, through the VO Group, participated in a fraudulent scheme in which representatives of the VO Group called owners of timeshare vacation properties purchased from Flagship Resort Development, Wyndham Vacation Resorts Inc., and other timeshare developers and convinced the owners to submit money to the VO Group, purportedly to pay off their “mortgages” on their timeshares. The VO Group claimed that the timeshare owner could pay off the mortgage balance at a substantially reduced amount—often by as much as 50 percent of the amount of the owner’s original mortgage—by mailing payment to the VO Group at a P.O. Box in Pleasantville, New Jersey. The VO Group representatives also persuaded timeshare owners to send the VO Group money purportedly to have timeshares cancelled or sold. Rather than paying off the timeshare owner’s mortgage, cancelling the owner’s timeshare, or selling the timeshare, the conspirators kept the timeshare owner’s money for their personal use.

The investigation also revealed that in an attempt to cover up the scheme, the conspirators in most cases engaged in a “bait and switch” tactic by purchasing an additional timeshare in the victim’s name without the victim’s knowledge. The victim purportedly had assented to the purchase based on documents the VO Group previously e-mailed to the victim for signature even though the victim had been led to believe that the victim was simply paying off the victim’s original timeshare mortgage.

According to the complaint, during the course of the investigation, law enforcement officers interviewed approximately 225 victims of the conspirators’ scheme identified to date. Many of the victims are elderly, causing them to be more vulnerable to the scheme. The indictment states that law enforcement has determined that the conspirators defrauded the victims of more than $3 million.

The mail and wire fraud conspiracy charge—with which all defendants named in the superseding indictment are charged—is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Each additional, substantive charge of mail fraud or wire fraud carries an additional, maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit money laundering charge subjects defendants Adam and Ashley Lacerda to an additional, maximum potential penalty of 20 years in prison and a $500,000 fine. Defendants Adam and Ashley Lacerda also face an additional, maximum potential penalty of 10 years in prison for each substantive money laundering count in which they are charged.

U.S. Attorney Paul J. Fishman announced the indictment.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for the investigation leading to today’s indictment. He also thanked the New Jersey Department of Labor, Benefit Payment Control Unit, for its assistance.

The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

The charges and allegations contained in the superseding indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Anyone who believes they are a victim of the fraud should contact the FBI’s Atlantic City Resident Agency at 609-677-6400.

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Homeowners Warned About Mortgage Ploy

Allison Tussey —  January 11, 2013 — Leave a comment

Homeowners should be on the lookout for a mailing that appears to be a legal document, but may be a ploy against mortgage consumers. 

The mailing comes in an envelope that appears to be an official legal or government document, but there is no company name or return address on the envelope or the letter itself. A call to the toll-free number in the letter reveals the company as Fresh Start, based in New York.

The letter informs homeowners that they may be eligible to join a national lawsuit or make a potential legal claim against a mortgage lender. The pitch from Fresh Start is that the homeowner must first pay $2,700 for the company to do “research” and then another $2,500 to retain a lawyer. Such up-front fees are a violation of federal regulations and Arizona consumer fraud laws.

Arizona Attorney General Tom Horne issued the warning.

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3 Indicted for Scam Involving Inflated Mortgages

Allison Tussey —  January 2, 2013 — Leave a comment

Kimberly Eileen McMillian, a/k/a Kimberly Simmons and Kimberly Simmons McMillian, 45, Baltimore, Maryland; Olutoyin Oladosu, a/k/a Tony Oladosu, 53, Lanham, Maryland; and Glenroy Emanuel Day, Sr., 73, Baltimore, have been indicted on charges of conspiracy to commit and committing wire fraud affecting a financial institution, in connection with a million dollar mortgage fraud scheme. The indictment was returned on December 19, 2012, and unsealed upon the arrest of McMillian.

According to the nine count indictment, from September 1 to December 31, 2007, McMillian and Oladosu, assisted by Day, carried out a scheme to fraudulently obtain inflated home mortgages and then diverted a substantial portion of the proceeds resulting from the sale of four homes to themselves. Specifically, McMillian, who identified herself as a real estate agent, consultant and investor and as a mortgage loan broker, arranged to purchase three homes in the Reservoir Hill neighborhood of Baltimore in the names of others, after she told the owner of the company that owned the homes that she had a clients from New York City who were eager to buy residential properties in Baltimore.

McMillian then contacted a loan officer and advised him that she was working as a mortgage loan broker and wanted to submit several loan application packages to his bank for financing, because her own company would not be able to get the loans approved in time to meet the currently scheduled closing dates for the four Baltimore properties. The loan officer agreed to review the packages, each of which consisted of a loan application identifying the purchaser of the house and detailing their employment history, earnings, assets, and debts, along with supporting documentation such as pay stubs or vouchers and bank account statements.

According to the indictment, virtually all of the information submitted by McMillian in connection with the loan applications was false. The names and other personal information of the purported borrowers consisted of either stolen or fictitious identities, or were of persons who never intended to live in the houses or make the mortgage payments. The telephone numbers of the purported employers actually belonged to co-conspirators or others who had agreed to falsely verify the borrowers’ employment. McMillian also arranged for Day to prepare misleading and fraudulent real estate appraisal reports on the three Reservoir Hill properties and a fourth property owned by McMillian herself, which McMillian then submitted to the bank in support of the loan applications. Based on the information provided in the loan applications, the false employment verifications, and fraudulent appraisals, the bank agreed to extend financing on each of the four properties, totaling $1.094 million.

At each of the four settlements, McMillian directed the settlement agent to transfer a substantial portion of the loan proceeds to her or to businesses associated with Oladosu, either pursuant to an assignment contract or to pay for purported renovations to the property. In fact, no repairs or renovations were carried out on any of the properties. The mortgage on each property soon went into default with mortgage payments either not made at all, or only one or two payments being made

The defendants each face a maximum sentence of 30 years in prison for the conspiracy and for each of eight counts of wire fraud affecting a financial institution. McMillian and Day had their initial appearance and were released under the supervision of U.S. Pretrial Services. Oladosu is a fugitive.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Robert Jasinski of the United States Secret Service – Baltimore Field Office.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.

The announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

United States Attorney Rod J. Rosenstein praised the FBI and U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Jefferson M. Gray, who is prosecuting the case.

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Owner of Foreclosure Remediation Business Found Guilty

Allison Tussey —  October 31, 2012 — Leave a comment

Andrew Bartok, 66, Clifton, New Jersey, a former owner of the foreclosure remediation business Revelations Consulting, which was located in New Jersey and Connecticut, was found guilty in White Plains< new York, federal court of charges related to a scheme to defraud distressed homeowners, commit witness tampering and obstruct federal court proceedings. Bartok was convicted after a 15-day jury trial presided over by U.S. District Judge Cathy Seibel. He was remanded into the custody of the U.S. Marshals following his conviction.

As previously reported by Mortgage Fraud Blog, and according to the Superseding Indictment filed in White Plains federal court, other court documents, and the proof at trial:

From 2000 through February 2011, Bartok owned Revelations, a company which also operated under the name “Foreclosure Club of America.” Bartok and his co-conspirators at Revelations and Foreclosure Club of America solicited individuals in New York, New Jersey, Connecticut, Pennsylvania, Georgia and Florida who were facing foreclosure proceedings on their homes. Bartok promised those homeowners that – in exchange for fees paid to Revelations – they would be able to stay in their homes and later repurchase their homes at foreclosure auctions for a fraction of the dollar amount of their mortgage obligations.

In reality, Bartok and his co-conspirators defrauded hundreds of homeowners of millions of dollars. None of Bartok‘s clients ever bought their homes back using the methods he advocated. Instead, Bartok and his co-conspirators filed fraudulent bankruptcy petitions and other false documents with U.S. Bankruptcy Courts, primarily in Poughkeepsie, New York, and Newark, New Jersey. Bartok and his employees forged the names of Revelations‘ clients on fraudulent filings under penalty of perjury, subjecting these clients to potential arrest and imprisonment.

Bartok and his co-conspirators also routinely instructed clients not to attend court proceedings, and not to mention Revelations if contacted by court personnel. As a result of following this advice, at least two of Revelations‘ clients were arrested by U.S. Marshals and brought before a U.S. Bankruptcy Judge in Poughkeepsie to explain false documents that Bartok filed in their names. These clients of Revelations were released after they explained Bartok‘s role in these filings.

The fraudulent documents were filed by Bartok and his co-conspirators in U.S. Bankruptcy Courts for the improper purpose of using the bankruptcy laws to forestall the foreclosure of the clients’ homes as long as possible while Revelations continued to collect its monthly fees. Ultimately, the bankruptcy cases were dismissed and Revelations‘ clients – who already had paid significant sums of money to Revelations – were evicted from their homes.

Throughout the fraud, Bartok collected millions of dollars in fees from his victims. These criminal proceeds funded a lavish lifestyle for Bartok and his family – including a $130,000 Mercedes-Benz automobile, numerous trips to Hawaii and Aruba, and high-stakes gambling at casinos in Atlantic City.

Bartok was convicted of one count of conspiracy to commit mail and wire fraud, one count of mail fraud, one count of conspiracy to commit bankruptcy fraud and obstruction of justice, one count of bankruptcy fraud, one count of conspiracy to commit witness tampering, one count of making false statements to United States Bankruptcy Judge Cecelia Morris and one count of obstruction of justice. Bartok was acquitted of one count of obstruction of justice and still faces trial in connection with acts committed during the course of his federal criminal case – including filing a perjurious affidavit and contempt of court. He faces a total maximum sentence of 95 years in prison and is scheduled to be sentenced by Judge Seibel on February 6, 2013.

Preet Bharara, the United States Attorney for the Southern District of New York, announced the jury’s verdict.

Mr. Bharara praised the United States Postal Inspection Service for its work on this case.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys John P. Collins, Jr. and Jeffrey Alberts are in charge of this prosecution.

Manhattan U.S. Attorney Preet Bharara said: “Andrew Bartok dangled false promises of relief to desperate homeowners who were trying to keep their homes, but instead, he victimized them by stealing their money and forcing many of them into involuntary bankruptcy. While Andrew Bartok vacationed in tropical locales and spent his hours in casinos gambling away his clients’ hard-earned money, his clients were losing their most treasured possessions – their homes. He will now face justice for the fraud that he committed against vulnerable and needy homeowners up and down the East Coast.”

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Attorney Indicted for Operating Loan Modification Scam

Allison Tussey —  October 3, 2012 — 1 Comment

Dean G. Chandler, an attorney, and Shelveen Singh, a telemarketing salesman, were arraigned in federal court in San Diego, California, on a 50-count indictment charging them with defrauding thousands of homeowners in an $11 million “loan modification” fraud scheme.

According to the indictment, these defendants (and two others previously arraigned) used Chandler‘s Oceanside-based law firm, 1st American Law Center (“1ALC“), to persuade victims to pay thousands of dollars each by deceptively touting 1ALC‘s purported success and legal resources, and falsely promising that 1ALC would successfully modify their residential mortgage loans.

As alleged in the indictment, the defendants and their co-conspirators used high-pressure sales tactics and outright lies to prey on homeowners located across the country who were struggling to make their monthly mortgage payments and were at risk of losing their homes to foreclosure. Among other alleged lies, the conspirators falsely promised to have a team of attorneys pre-screen client applications ““ claiming that these attorneys only approved 30% of those seeking to use 1ALC‘s services — and boasted of having a 98% success rate in obtaining loan modifications. 1ALC‘s telemarketers were encouraged (using call “scripts” and other training) to say virtually anything to customers in order to close the deal.

The indictment alleges that among other ruses, employees pretended that that they had helped “thousands” of happy homeowners save their homes, that 1ALC had been in business for 20 years, that clients’ fees would be deposited into a client-trust account and remain untouched until the client was satisfied, and that there was a money-back guarantee. Conspirators even persuaded financially strapped homeowners to pay 1ALC‘s fees, instead of the clients’ monthly mortgage payment.

According to the indictment, lead defendant Dean G. Chandler was the Oceanside attorney at the head of 1ALC. He appeared in television commercials and on the company’s websites as the attorney in charge of the company, soliciting customers throughout the United States. Chandler is charged along with telemarketers Shelveen Singh, Anthony Calandriello, and call center manager Michael Eccles, with conspiring to commit the offenses of mail fraud and wire fraud through the operation of 1ALC. Defendant Chandler is also charged with money laundering because he conducted financial transactions with the proceeds of the fraudulent conspiracy.

Defendants Chandler and Singh have been released on bond and will next appear in federal court before District Judge Roger T. Benitez on November 13, 2012 at 2:00 p.m. to set future dates for a motion hearing and trial. Defendant Calandriello was taken into custody in New York, and will appear in San Diego on October 17, 2012 at 10:30 am to set further dates. Defendant Eccles is in custody in San Diego, pending release on bond.

Nine other participants in 1ALC‘s telemarketing scheme have already entered guilty pleas in federal court for their roles in the criminal enterprise and the subsequent cover-up. On December 16, 2011, 1ALC‘s Director of Marketing Gary Bobel pled guilty to conspiracy and tax charges, and telemarketers Scott Thomas Spencer, Mark Andrew Spencer, and Travis Iverson each pled guilty to conspiracy charges in relation to their conduct at 1ALC. These four defendants are next scheduled to appear before Judge Benitez for sentencing on December 3, 2012.

On August 21, 2012, 1ALC telemarketer Jonathon Hearn pled guilty to conspiracy charges, and will also face Judge Benitez for sentencing on December 3, 2012. Telemarketer Roger Jones pled guilty to conspiracy on December 23, 2010, and was sentenced in March 2011 to serve 21 months in custody for his role in defrauding desperate homeowners. On February 9, 2012, Director of Information Technology Steven Gerstzyn pled guilty to making a false statement to federal agents who were investigating the activities at 1ALC. Gerstzyn is scheduled to appear before Judge Benitez for sentencing on October 15, 2012.

Finally, Sarah Grimm and Amy Hintz, both former employees of 1ALC, pled guilty on June 28, 2012, to theft of government property, and were each fined $1,000 and ordered to serve 2 years’ probation.

United States Attorney Laura E. Duffy announced the charges.

FBI Special Agent in Charge Daphne Hearn commented, “At a time when many homeowners in our nation are bearing extreme financial difficulty, it is most unfortunate that there are those individuals who prey on their vulnerability and egregiously attempt to defraud them. The FBI stands resolute in identifying those who are responsible for these schemes and will work with our law enforcement partners to maintain the integrity of the economic sectors of our country.”

Leslie P. DeMarco, Special Agent in Charge of IRS ““ Criminal Investigation’s Los Angeles Field Office commented, “Mortgage modification scams prey on struggling and trusting homeowners. The court actions are a strong reminder of how serious our courts consider this criminal activity. IRS Criminal Investigation is proud to be a part of the law enforcement partnership that is dedicated to tackling this type of crime.”

Victims of 1st American Law Center may contact the U.S. Attorney=s Office Victim/Witness Coordinator, Polly Montano, at (619) 546-8921.

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Serial Fraudster Sentenced for Real Estate Scam

Allison Tussey —  October 2, 2012 — 2 Comments

Michael Howard Clott, a/k/a “Michael Howard,” Bethesda, Maryland, was sentenced in Manhattan federal court to 21 years and 7 months in prison for engaging in a series of real estate investment and mortgage fraud schemes in which he attempted to steal more than $10 million from his victims.

In 2008 and 2009, Clott ““who had multiple previous fraud convictions ““ used an alias, stolen identities, and forged documents to lure victims into giving him millions of dollars for purported real estate investments and home purchases. Clott then misappropriated the money, using at least $1.3 million to purchase a hair salon for his daughter.

As previously reported by Mortgage Fraud Blog, after pleading guilty to three fraud schemes in December 2009, Clott fled while on bail, and was recaptured in April 2010 in Massachusetts. He was then charged with bail jumping in connection with a fourth investment fraud scheme, to which he also pled guilty, in July 2011. Clott was sentenced today by U.S. District Judge Richard M. Berman.

Preet Bharara, the United States Attorney for the Southern District of New York, announced the sentence.

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Women Arrested in Florida Mortgage Fraud Case

admin —  September 28, 2012 — Leave a comment

The Fort Lauderdale-Miami area had the nation’s third-highest number of reports of mortgage loan fraud during the 2011 fiscal year, according to a report released this summer by LexisNexis. Los Angeles was first and New York second. Industry observers …

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Source: Mortgage Daily

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Retired Fannie Mae Exec Franklin Raines Dodges Fraud Claim

admin —  September 25, 2012 — Leave a comment

Opposing Views WASHINGTON (CN) – A class of Federal National Mortgage Association shareholders failed to prove that a retired senior executive with the government sponsored corporation committed securities fraud, a federal judge ruled. A class of Fannie Mae …Adding Up the Government’s Legal Bills for Fannie and Freddie New York Times all 65 news articles.

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Source: Opposing Views

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Plea Deal Seen in Queens Mortgage-Fraud Scheme

admin —  September 21, 2012 — Leave a comment

National Legal and Policy CenterSoutheast Queens real estate magnate Edul Ahmad has reached a tentative plea agreement with federal investigators on charges that he orchestrated a $50 million mortgage fraud scheme, according to documents filed Wednesday by the office of Eastern …Business man with ties to Rep. Meeks close to plea deal New York Post BREAKING: Edul Ahmad Cops Plea?; Crony of Rep. Gregory Meeks National Legal and Policy CenterEd Ahmad cops plea Stabroek Newsall 5 news articles

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Source: Crain’s New York Business

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Suspect Arrested in Real Estate Telemarketing Scam

Allison Tussey —  September 14, 2012 — Leave a comment

Michael Sweigart, the last suspect in a multi-state real estate telemarketing ring, is now in custody.

According to indictments returned in June, the suspects operated a criminal enterprise of at least three different companies targeting victims nationwide who owned inexpensive, vacant land throughout the United States. Landowners were fed a series of lies over the phone and were led to believe that their land was worth up to 15 times its assessed value. They were told they had to pay fees of $500 to nearly $16,000 to guarantee the sale of their land.

The enterprise was founded in Ohio in 2007 and operated from many locations, including Troy, Huber Heights, and Vandalia, Ohio. Later, the operation opened new branches in the Tampa, Fla., area.

The 18 suspects were indicted on June 20th for charges including Engaging in a Pattern of Corrupt Activities; Conspiracy; Aggravated Theft of $1.5 million or more; Telecommunications Fraud; Money Laundering; and Telemarketing Fraud. If convicted, the ringleaders face charges that can carry a mandatory minimum of 10 years in prison and a maximum sentence of 37 and a half years.

Several anonymous tips to the Attorney General’s Office led officers to a home in West Plains, Missouri, where Sweigart went into custody without incident. He had been on the run for more than two months.

The majority of the 18 suspects were arrested in Florida, while officers found others in Ohio, Indiana, New York, and now Missouri.

Sweigart is facing a maximum of 24.5 years in prison for his alleged role in the crimes. He is currently awaiting extradition back to Ohio to face charges. Two other suspects have pleaded guilty in the case, and trial dates for several others have been scheduled.

Ohio Attorney General Mike DeWine announced the arrest.

“Wednesday’s arrest makes the 18th and final arrest in connection to this ongoing investigation,” said Attorney General DeWine. “We appreciate the teamwork between our Ohio officers and the officers across the country who all helped put each suspect in jail.”

Deputies with the Howell County, Missouri, Sheriff’s Office made the arrest.

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