Archives For False Documents

Former Real Estate Attorney and Wife Sentenced for Mortgage Fraud

Stephanie Abbott —  August 29, 2022 — Leave a comment

Barry Wayne Plunkett Jr., 62, and Nancy Plunkett, 57, both of Hyannis Port, Massachusetts a former Massachusetts attorney and his wife have been sentenced in federal court in Boston in connection with various mortgage fraud schemes.

The defendants engaged in several bank fraud schemes. In one scheme, from September 2012 to July 2016, the defendants defrauded six mortgage lenders and 14 homeowners for whom the Plunkett Law Firm handled the closings for new mortgage loans to refinance residential properties. The Plunketts informed the mortgage lenders that pre-existing mortgages were paid off from the new loan proceeds when, in fact, they intentionally failed to pay off the prior liens and instead converted more than $1 million in payoff funds for their own purposes.

In other bank fraud schemes, between April 2015 and March 2018, the Plunketts fraudulently used various names, entities and false documents to obtain three successive mortgage loans on their home in Hyannis Port, Massachusetts in amounts of $412,000, $470,000 and $1.2 million. The defendants pledged as collateral a property in Hyannis Port that was held in a family trust for which Barry Plunkett was one of three beneficiaries. Both defendants participated in providing false documents to the lenders, including false title reports and other records to falsely represent that the property was free and clear of existing mortgage liens and forged documents in the names of other people. The defendants also made misrepresentations to a lender that Nancy Plunkett was a single woman living in Wellesley who was purchasing the property in her maiden name as a business investment when, in fact, the defendants had been married since 2014 and the property was their residence.

Barry Plunkett was sentenced to 78 months in prison and five years of supervised release. He was also ordered to pay restitution of $3,236,466 and forfeiture of $3,221,403. Nancy Plunkett was sentenced to one year and one day in prison and five years of supervised release. She was also ordered to pay restitution of $3,054,759, jointly and severally with Barry Plunkett, and forfeiture of $3,221,403. On March 4, 2022, Barry Plunkett pleaded guilty to five counts of bank fraud, one count of aggravated identity theft and one count of tax evasion. On the same date, Nancy Plunkett pleaded guilty to five counts of bank fraud.

Prior to being disbarred in October 2017, Barry Plunkett owned and operated the Plunkett Law Firm where his wife, Nancy Plunkett, served as his office assistant and paralegal.

United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Robert Manchak, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region made the announcement today. Assistant U.S. Attorneys Victor A. Wild and Mackenzie Queenin of Rollins’ Securities, Financial & Cyber Fraud Unit and Carol Head, Chief of Rollins’ Asset Recovery Unit, prosecuted the case.

 

 

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Loan Officer & R. E. Agents Charged in Mortgage Fraud Scheme

Stephanie Abbott —  August 25, 2022 — Leave a comment

German Antonio Lopez-Velasquez, 55,  Modesto, California; Marko Antonio Lopez, 27, Modesto, California and Lisa Marie Santos, 48, Long Beach, California have been charged with bank fraud and conspiracy to commit bank fraud.

According to court documents, Lopez-Velasquez and Lopez, who were both real estate agents, worked with Santos, a mortgage loan officer, to obtain fraudulent mortgage loans for properties based in Stanislaus County, San Joaquin County, Santa Clara County, California and elsewhere. The three utilized false documents, fictional companies, and fictional individuals to obtain mortgage loans for borrowers who were not qualified to receive loans. In total, the defendants caused lenders to issue at least 30 loans based on false information with a total principal loan balance exceeding $10 million.

Lopez-Velasquez was also charged with witness tampering. He is alleged to have attempted to persuade an individual to make false statements to law enforcement officers regarding a mortgage loan under investigation.

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

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.

“The FHFA-OIG is committed to holding accountable those who waste, steal, or abuse the resources of the Government-Sponsored Enterprises regulated by FHFA, which the defendants have been charged with defrauding,” said Jay Johnson, Special Agent in Charge, FHFA-OIG, Western Regional Office. “We are proud to have worked with the U.S. Attorney’s Office and our law enforcement partners on this case and to demonstrate, once again, that FHFA-OIG will investigate and hold accountable those who seek to victimize the Government-Sponsored Enterprises supervised and regulated by FHFA.”

“This case demonstrates HUD OIG’s commitment to pursuing and bringing to justice those who put Federal programs, such as the FHA Mortgage Insurance Fund at risk for their own enrichment,” said Special Agent in Charge Mark T. Kaminsky with HUD OIG Office of Investigation. “HUD OIG remains committed to working with our law enforcement partners and the US Attorney’s Office, Eastern District of California to investigate and hold accountable those who perpetrate mortgage fraud in central California.”

If convicted, the defendants face a maximum statutory penalty of 30 years in prison and a $1 million fine for bank fraud and conspiracy to commit bank fraud. If convicted, Lopez‑Velasquez faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for witness tampering. 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

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R.E. Agent & Her Husband Charged With Conspiracy & Bank Fraud

Stephanie Abbott —  August 3, 2022 — Leave a comment

Maria Del Carmen Montes, 46, Kissimmee, Florida has been charged with one count of conspiracy to commit bank fraud, four counts of bank fraud and one count of aggravated identity theft. Also charged is Montes’ husband Carlos Ferrer, 45, Kissimmee, Florida with one count of conspiracy to commit bank fraud and three counts of bank fraud.

According to the Indictment, Montes and Ferrer conspired to create and executed a mortgage fraud scheme targeting financial institutions. To ensure that otherwise unqualified borrowers she was representing as a licensed realtor were approved for mortgage loans, Montes created fictitious and fraudulent paystubs and IRS Form W-2s in the names of companies for whom her clients had never worked. The bogus income documents falsely indicated that her clients had worked at these companies, including companies formed and controlled by Ferrer, for a certain period of time and earned income that they did not. Montes submitted the fictitious paystubs and W-2s she created to the financial institutions who relied on them when making underwriting decisions. Additionally, Montes used her clients’ personally identifying information on these documents without their knowledge or authorization.

In order to further deceive the mortgage lenders, Montes and Ferrer recruited a co-conspirator working at a company listed on certain false paystubs and W-2s to falsely certify Verifications of Employment (VOEs”) sent by the financial institutions and instructed the co-conspirator to lie to the final institutions when they called to further verify the borrower’s employment. Ferrer and Montes sent the false and fictitious paystubs and W-2s to the co-conspirator so the co-conspirator could put the false information on the VOEs before certifying, signing, and returning them to the financial institutions. Ferrer also falsely certified and emailed VOEs sent by the financial institution in the names of borrowers that he knew did not work for his companies and lied to the banks during verbal VOE checks. Based on Montes’ and Ferrer’s misrepresentations, the financial institutions approved and funded the mortgage loans.

If convicted, Montes faces a maximum penalty of 30 years in federal prison on the conspiracy count, up to 30 years for each fraud count, and a mandatory penalty of 2 years’ imprisonment for the aggravated identity theft count. If convicted, Ferrer faces a maximum penalty of 30 years in prison for the conspiracy count, and up to, 30 years’ imprisonment for each fraud count.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, the U.S. Department of Housing and Urban Development – Office of Inspector General, and the Federal Bureau of Investigation.  It will be prosecuted by Special Assistant United States Attorney Chris Poor.

 

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Business Owner Pleads Guilty to Conspiracy to Commit Wire Fraud re: the Sale of Two Baltimore Properties

Stephanie Abbott —  May 20, 2022 — Leave a comment

Philip Abramowitz, 50, Pikesville, Maryland, pleaded guilty yesterday to conspiracy to commit wire fraud in relation to the sale of two Baltimore properties.

According to his guilty plea, from May 2016 to April 2017, Abramowitz and others conspired to defraud two financial institutions by fraudulently obtaining Federal Housing Administration (FHA) loans and property under false pretenses.  Specifically, Abramowitz used his company 163 N. Potomac St., LLC., to facilitate the fraudulent sales of his Potomac Street, Baltimore, Maryland properties.

For example, in May 2016, Abramowitz sold one of his Potomac Street properties (Property 1) to a family member (Relative 1) and entered into an agreement with Relative 1 to purchase the property using an FHA-insured loan.  The FHA is part of the U.S. Department of Housing and Urban Development (HUD) and provides mortgage insurance on loans made by FHA-approved lenders.  To qualify for the FHA-insured loans, the buyer must use the residence as their primary residence, disclose any familial or business relationship between the seller and buyer, and disclose the source of the money the buyer intends to use for the down payment and closing costs.

As stated in his guilty plea, Relative 1 applied for and received a $294,566 FHA-insured loan with a mortgage company (Mortgage Company 1) by falsely representing Abramowitz’s bank account records as his own.  Relative 1 and Abramowitz also concealed their familial relation from Mortgage Company 1 by submitting false company filings during the loan application process, having Abramowitz’s property manager (Property Manager 1) pose as the sole seller and manager of 163 N. Potomac St., LLC and arranging Property Manager 1 to sign the FHA-loan contact as the official seller of the property.  Abramowitz’s ownership of 163 N, Potomac St., LLC. or involvement in the sale was never disclosed.

To meet the requirements of the loan procurement process, Abramowitz gave Relative 1 $10,500 to pay for the closing costs for Property 1 as Relative 1 did not have the financial means to make the purchase.   Based on the fraudulent financial information presented during the loan application process, Mortgage Company 1 loaned Relative 1 $294,566 for the purchase of Property 1.  The majority of the loan proceeds were subsequently deposited into Abramowitz’s bank account.  Ultimately, Relative 1 never used Property 1 as a primary residence and rented the property to tenants for a year before ceasing mortgage payments and allowing the property to fall into foreclosure.

Further, Abramowitz arranged the sale of his second Potomac Street property (Property 2) in March 2017 to another family member (Relative 2) using an FHA-insured loan.  To facilitate the sale of Property 2, Relative 2 applied for an FHA-insured loan with another mortgage company (Mortgage Company 2).  Using the same manner to defraud Mortgage Company 1, Abramowitz concealed his familial relation to Relative 2, falsely listed his property manager as the sole seller and owner of Property 2 and submitted multiple fraudulent documents to Mortgage Company 2, including an LLC affidavit of title asserting that no other person or entity had ownership in Property 2.

In a similar manner as the sale of Property 1, Abramowitz violated FHA-loan requirements by providing Relative 2 $8,750 for the closing costs of the sale, misrepresented his own bank account information as Relative 2’s in the FHA-loan procurement process, and received the majority of the loan proceeds to his personal bank account.  Relative 2 never used Property 2 as a primary residence or paid monthly mortgage payments to Mortgage Company 2 which caused the property to fall into foreclosure.

Abramowitz faces a maximum of 30 years in prison followed up by 5 years of supervised release for conspiracy to commit wire fraud.  U.S. District Judge Richard D. Bennett has scheduled sentencing for August 9, 2022, at 2:30 p.m.

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Agent in Charge Shawn A. Rice of the U.S. Department of Housing and Urban Development Office of Inspector General.

As part of his guilty plea, Abramowitz will be ordered to pay $373,684 in restitution.

United States Attorney Erek L. Barron commended HUD-OIG for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Martin J. Clarke, who is prosecuting the federal case.

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.

 

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Duo Charged in Multi-Layered Fraud Scheme

Stephanie Abbott —  March 23, 2022 — Leave a comment

Steven Tetsuya Morizono, 59, Mission Viejo, California, and Albert Lugene Lim, 53, Laguna Niguel, California, a ringleader and his brother-in-law have been indicted for their participation in a multi-state scheme involving mortgage fraud, credit repair and government loan fraud.

The indictment remains sealed to others charged but not as yet in custody.

The 33-count indictment, returned March 16,2022 alleges Morizono and Lim led the conspiracy. Using the alias Jeff, Morizono was the leader and namesake for the scheme purporting to do business as Jeff Funding, according to the charges. In reality, Jeff funding allegedly operated a multi-layered scheme to defraud mortgage lending businesses, banks, Small Business Administration (SBA) and Federal Trade Commission (FTC).

The indictment alleges co-conspirators recruited clients for credit repair using company names of KMD Credit, KMD Capital and Jeff Funding, among others. They allegedly “cleaned” their clients’ credit histories by filing false identity theft reports with the FTC. After fraudulently inflating client credit worthiness, the co-conspirators fraudulently obtain credit cards, disaster loans and mortgages for themselves and their clients, according to the charges. They were allegedly able to accomplish this through false statements and fake documents.

Morizono and his crew maintained control of the properties purchased in their clients’ names, according to the charges. The purpose, the indictment alleges, was for the purpose of building a real estate portfolio worth millions of dollars and enriching themselves with rental income.

If convicted, Morizono and Lim face up to 30 years in federal prison and a possible $1 million maximum fine.

They are set for an arraignment before U.S. Magistrate Judge Sam S. Sheldon today at 2 p.m.

Two others – Heather Ann Campos, 43, and David Lewis Best Jr., 58, both of Houston –  are fugitives with warrants remain outstanding for their arrest. Anyone with information about their whereabouts is asked to contact the U.S. Postal Inspection Service at 281-512-8525.

The announcement was made by U.S. Attorney Jennifer B. Lowery.

The Federal Housing Finance Agency – Office of Inspector General (OIG), U.S. Postal Inspection Service, Housing and Urban Development – OIG and SBA – OIG conducted the investigation with the assistance of the FTC – OIG and IRS – Criminal Investigation. Assistant U.S. Attorneys Kate Suh and Jay Hileman are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

 

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R.E. Agent Sentenced For Running Multi-Year Mortgage Fraud Scheme

Stephanie Abbott —  January 21, 2022 — Leave a comment

Eric Hill, 52, Tyrone, Georgia, an Atlanta real estate agent, has been sentenced for his participation in a mortgage fraud scheme that netted more than $21 million in fraudulent mortgage loans.  Many of the fraudulent loans were insured by the Federal Housing Administration (FHA), resulting in over $850,000 in claims being paid for mortgages that have defaulted.  Hill also engaged in a scheme to defraud his employer, a national real estate developer, out of over $480,000 dollars in real estate commissions.

According to the charges and other information presented in court: The defendants participated in a scheme in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.  Eric Hill and Robert Kelske were real estate agents who represented a major nationwide homebuilder.  Hill and Kelske helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, Hill and Kelske conspired with real estate agents Anthony Richard and Cephus Chapman, who falsely claimed to represent homebuyers as their selling agents in order to receive commissions from the home sales.  In reality, these real estate agents had never even met the homebuyers they claimed to represent.  To avoid detection, the agents often notified closing attorneys that they would not be available for the home closing and sent wire instructions for the receipt of their commissions.  When these purported selling agents received their unearned commissions, they kicked back the majority of the commissions to Hill or Kelske for enabling them to be added to the deal, keeping a small share for their role in the scheme.

“Eric Hill and his co-conspirators defrauded mortgage loan holders out of millions of dollars, with taxpayers being saddled with much of the loss,” said U.S. Attorney Kurt R. Erskine.  “We will vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of financial institutions and government programs that insure or guarantee the loans.”

“While it is easy to dismiss financial fraud cases as victimless crimes because of their lack of violence, there is, however, very real victimization to our economy and our taxpayers,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “This sentencing sends the message that the FBI will persistently work to protect American citizens and the real estate market from predators who drag down our economy by deception for their own personal gain.”

“Eric Hill engaged in premeditated criminal acts with the sole purpose of enriching himself, without regard for millions of American homebuyers who rely on federal housing programs to insure their mortgages. His fraudulent actions strike not only at the fiscal integrity of the FHA, but also our neighbors and communities who are victims of these schemes,” said Special Agent in Charge Wyatt Achord with the Department of Housing and Urban Development Office of Inspector General.

“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who commit fraud in the housing and mortgage market and abuse the resources of the Government-Sponsored Enterprises regulated by FHFA.  We are proud to have partnered with HUD-OIG, the FBI, and the U.S. Attorney’s Office for the Northern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.

Hill was sentenced to two years, six months in prison to be followed by three years of supervised release.  Hill was convicted on these charges on September 21, 2020, after he pleaded guilty.

In addition to Hill, Defendants Donald Fontenot, Maurice Lawson, Stephanie Hogan, Jerod Little, Renee Little, Paige McDaniel, Fawziyyah Connor, and Anthony Richard have all been sentenced for their roles in the conspiracies.

  • Todd Taylor pled guilty and is scheduled to be sentenced on March 3, 2022.
  • Robert Kelske also pled guilty and is scheduled to be sentenced April 14, 2022.
  • Cephus Chapman was convicted at trial and is scheduled to be sentenced on February 10, 2022.

This case was investigated by the Department of Housing and Urban Development Office of the Inspector General, Federal Bureau of Investigation, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorneys David A. O’Neal, Alison B. Prout, and former Northern District of Georgia Assistant U.S. Attorney Ryan Huschka prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

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Real Estate Broker Pleads Guilty to Real Estate Deposit Scam

Stephanie Abbott —  December 17, 2021 — Leave a comment

Michael P. Flavin, 38, Quincy, Massachusetts, a real estate broker pleaded guilty today to operating a scheme in which he falsely marketed properties that were not for sale, or had already been sold, and then stole the buyers’ real estate deposits.

Between 2017 and April 2020, Flavin solicited deposits on real estate transactions by marketing numerous real estate properties that were not actually for sale. In each case, Flavin executed purchase and sale agreements and received deposit checks from or on behalf of the potential buyers, even though the actual owners of the properties had not agreed to sell their properties or to sell them to those buyers. Flavin forged the signatures of the sellers on the purported purchase and sale agreements. Over this period of approximately three years, Flavin cashed more than 60 deposit checks totaling approximately $1.8 million.

The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charges of aggravated identity theft each provide for a mandatory sentence of two years in prison to be served consecutive to any other sentence imposed, up to one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Flavin pleaded guilty to two counts of wire fraud and two counts of aggravated identity theft. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for April 12, 2022.

Acting United States Attorney Nathaniel Mendell and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. Assistant U.S. Attorneys Victor A. Wild and Sara Miron Bloom of Mendell’s Securities, Financial & Cyber Fraud Unit are prosecuting the case.

 

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Man Indicted for Scheme to Steal & Re-Sell Real Property

Stephanie Abbott —  December 15, 2021 — Leave a comment

Franklin A. Olaitan, 48, Beltsville, Maryland, has been charged in a 10-count indictment with carrying out a scheme to steal a residence located in the District of Columbia and then reselling the property to an unsuspecting buyer.

As alleged in the indictment, Olaitan perpetrated a scheme in which he obtained a residential real property located in the 2000 block of First Street NW, District of Columbia by submitting false documents to lenders, a settlement company, and the District of Columbia Recorder of Deeds. It is alleged that Olaitan quickly resold the residential property to an unsuspecting buyer and received the seller’s proceeds from both purported sales of the property.  In the real estate closings, first, a lender paid approximately $420,000 and, second, a purchaser paid about $550,000.

Olaitan is charged with four counts of wire fraud, two counts of interstate transportation of stolen property, two counts of aggravated identity theft, one count of identity theft, and one count of first-degree fraud. The indictment includes a notification of the United States’ intent to seek the forfeiture of any proceeds Olaitan received as a result of the fraud scheme, identity theft, and interstate transportation of stolen property.

Olaitan was arraigned today in the U.S. District Court for the District of Columbia. The indictment against him was also unsealed today.  He was released following his initial court appearance, pending further court proceedings.

The indictment was announced by U.S. Attorney Matthew M. Graves and Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division.

An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.

This case is being investigated by the FBI’s Washington Field Office. It is being prosecuted by Assistant U.S. Attorney Diane Lucas of the Fraud Section of the U.S. Attorney’s Office for the District of Columbia, with assistance from Paralegal Specialists Daniel Haines and Mariela Andrade.

 

 

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Loan Officer Admits Participation in Large-Scale Mortgage Fraud Scheme

Stephanie Abbott —  December 13, 2021 — Leave a comment

Isaac DePaula, 41, a loan officer for a mortgage company today admitted his role in a long-running, large-scale mortgage fraud scheme,

According to the documents filed in this and other cases and statements made in court:

From September 2006 to September 2010, DePaula and his conspirators engaged in a long-running, large-scale mortgage fraud conspiracy through a mortgage company called Premier Mortgage Services (PMS). The conspirators targeted properties in low-income areas of New Jersey. After recruiting straw buyers, the defendants used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets, and earned far more income, than they actually did. The defendants then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties.

The defendants then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The defendants made false representations and provided fraudulent documents when, in fact, the straw buyers had no means of paying the mortgages on the subject properties, many of which entered into foreclosure proceedings.

The defendants played different roles in the scheme, and others charged and convicted included a part owner of PMS, an attorney who aided the fraud by performing closings on many of the subject properties, an accountant who created false documents, the owner of a real estate development company, several loan officers, and a paralegal for another attorney who also closed fraudulent transactions.

DePaula was a loan officer at PMS and recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from PMS for each mortgage loan that they closed, and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.

DePaula was a long-time fugitive who was charged by criminal complaint in 2012 and by indictment in 2016. He returned to the United States in March 2020 to face the charges in the indictment.

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

The offense to which DePaula pleaded guilty carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for April 19, 2022.

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; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and special agents of the Federal Housing Finance Agency – Office of the Inspector General, under the direction of Special Agent in Charge Robert W. Manchak, with the investigation leading to today’s guilty plea.

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Man Guilty of Fraud Scheme Targeting Various Financial Institutions

Stephanie Abbott —  October 27, 2021 — Leave a comment

Ira Morya Davis, 40, Irving, Texas, pleaded guilty to conspiracy to commit wire fraud on Oct. 26, 2021.

According to information presented in court, Davis and at least two other co-conspirators devised a fraud scheme targeting various financial institutions and real estate purchasers.  To accomplish the fraud, Davis and his co-conspirators created shell companies and executed various mortgage and property documents that purportedly conveyed ownership interests of various real properties from the true owners to the conspirators’ shell companies.  Davis and his co-conspirators then filed the fraudulent documents with county offices falsely showing that they had mortgage liens on the properties, sold the properties, and triggered the title companies to unwittingly fund the co-conspirators.  During the course of the scheme, Davis obtained and used fraudulent notary stamps using real people’s identities, which enabled the conspirators to legitimatize the otherwise fraudulent documents.  Davis and his co-conspirators targeted multiple properties, and the financial harm resulting from his offense was at least $2.5 million.

Davis was indicted by a federal grand jury on March 12, 2020.  He faces up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

Acting U.S. Attorney Nicholas J. Ganjei made the announcement.

“The Eastern District is committed to tackling complex fraud schemes, including those that target financial institutions and purchasers in the real estate market,” said Acting United States Attorney Nicholas J. Ganjei.  “Regardless of the complexities involved, the public can be assured that EDTX and its law enforcement partners are working tirelessly to disentangle complex white collar fraud schemes and bring culpable individuals to justice.”

The case is being investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation.

 

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