Archives For foreclosure fraud

Man Pleads Guilty to Defrauding D.C. Mortgage Assistance& Foreclosure Prevention Program

Stephanie Abbott —  September 18, 2023 — Leave a comment

Maron Moss, Jr., 49, Miami, Florida, pleaded guilty today in Superior Court to one count of first-degree fraud for a scheme in which he stole more than $31,920 from the District of Columbia’s HomeSaver program, a foreclosure prevention program administered by the D.C. Housing Finance Agency and funded by the U.S. Department of Treasury.

            According to the government’s evidence, Moss, a former DC resident, applied for mortgage assistance for his Washington, D.C. home in 2018, and then submitted recertifications for continued program eligibility on six separate occasions between 2018 and 2019.  Moss represented that he was suffering from financial hardship, was unemployed, and that his only source of income was unemployment benefits. Based on these representations, the D.C. Housing Finance Agency made more than $31,920 in monthly mortgage payments directly to Moss’s mortgage service companies. But Moss was, in fact, employed when he applied for the program, as well as during the entire period that he recertified his program eligibility, earning approximately $239,743 in income from at least five different employers during the relevant 20-month period.

            The Honorable Heidi Pasichow accepted Moss’s guilty plea and scheduled sentencing for December 5, 2023. As part of the plea agreement, Moss agreed to pay full restitution.

U.S. Attorney Matthew M. Graves, Principal Deputy Inspector General Melissa Bruce, of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Inspector General for the District of Columbia Daniel W. Lucas made the announcement.

            In announcing the guilty plea, U.S. Attorney Graves, Principal Deputy Inspector General Bruce, and Inspector General Lucas commended the work of those who investigated the case from SIGTARP and the Office of Inspector General.  They also acknowledged the efforts of Assistant U.S. Attorneys Benjamin D. Bleiberg and Brian P. Kelly who investigated and prosecuted the case.

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Four Charged with Conspiracy for Defrauding Distressed Homeowners Looking for Help

Stephanie Abbott —  May 3, 2023 — Leave a comment

             David Maresca, 48, Manassas, Virginia, Scott Marinelli, 51,  Mountainside, New Jersey, Sam Babbs, III, 41, Orlando, Florida, and Terrylle Blackstone, 35, Woodbridge, Virginia, have been charged with conspiring to defraud thousands of distressed homeowners who thought they were hiring a legal firm to help them avoid foreclosure. The defendants, some of whom were licensed to practice law in Washington, D.C., New Jersey, and Florida, allegedly reaped millions of dollars in ill-gotten gains.

According to the indictment, the scheme involved marketing Synergy Law and Themis Law through telephone, television, and Internet advertising which told homeowners that attorneys could help them avoid foreclosure. The defendants, through the law firms, operated  call centers, where workers used scripts during calls with homeowners falsely promising that an attorney would review the homeowner’s case file; that this attorney knew their lender’s “internal guidelines,” for a “mortgage resolution”; and that an assigned “legal team” would contact the homeowner’s lender to negotiate a resolution.

The conspirators knew these representations were false and fraudulent. Synergy Law and Themis Law never operated a “national law firm,” and never provided legal services to homeowners. Neither Synergy Law nor Themis Law had attorneys review homeowner files, and neither Synergy Law nor Themis Law had attorneys contact a client’s lender to discuss a mortgage resolution. The homeowners signed agreements in which the law firms promised to provide “legal representation,” “attorney services” and “legal services” to the homeowner-client. Synergy Law required homeowner-clients to pay an initial retainer amount (often between $995 and $1,750), followed by a monthly recurring amount (often between $595 and $1,200), for as long as Synergy Law represented the homeowner. Once victim funds were in that account, Maresca, Marinelli, and Blackstone used the funds for their personal benefit, and continued to collect monthly payments from the clients. When the clients faced imminent foreclosure, Synergy Law provided non-legal bankruptcy petition preparation services and directed clients to file pro se bankruptcy petitions to stop foreclosure. Synergy Law directed clients not to disclose that the clients had worked with Synergy Law to prepare their bankruptcy petition. Themis Law clients, who were considering filing for bankruptcy to save their homes, were referred to Babbs Law where they signed a new retainer agreement and paid additional fees.

When bankruptcy judges, Synergy Law clients, and the U.S. Trustee’s Program raised concerns about Synergy Law’s practices in bankruptcy matters, Blackstone attended court hearings on behalf of Synergy Law and made false statements to the court about Synergy Law’s operations. When Marinelli’s law license was suspended in New Jersey in 2017, and the District of Columbia in 2018, Maresca, Marinelli, and Blackstone continued to operate Synergy Law and collect monthly payments purportedly for legal services.

Maresca is also charged with falsely filing for bankruptcy on behalf of Synergy Law.  According to the indictment, in answering a question on the bankruptcy forms about financial affairs, which required Synergy Law LLC to list transfers of money or other property that was not in the ordinary course of business, Maresca falsely stated “None,” when he knew he had withdrawn S315,083.42 from Synergy Law accounts to purchase his personal residence.

The indictment further charges Maresca, Marinelli, and Blackstone with five counts of mail fraud; Maresca, Babbs, and Blackstone with three counts of wire fraud and two counts of mail fraud; and Maresca with five counts of monetary transactions in criminally-derived property, and two counts of falsification of bankruptcy records. Maresca was arrested today and made an initial appearance in Washington, D.C.; Marinelli was arrested today and made an initial appearance in New Jersey.

The charges were announced by U.S. Attorney Matthew M. Graves, Special Agent in Charge Wayne A. Jacobs, of the FBI Washington Field Office Criminal and Cyber Division, and Acting Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation (“IRS-CI”) Washington, D.C. Field Office.

Maresca formed Synergy Law LLC (“Synergy”), in Washington DC, in 2016, and Themis Law PLLC (“Themis”) in  2019. Marinelli, who was licensed in New Jersey, owned 10 percent of Synergy; Babbs, who was licensed in Florida and D.C., owned his own firm – Babbs Law Firm P.L. (“Babbs”) – and 10 percent of Themis. Blackstone worked for all three firms.

The U.S. Attorney’s Office and the FBI urge anyone who did business with these law firms, and who think they were defrauded, to visit https://www.justice.gov/usao-dc/mortgage-fraud and/or contact the Mega Victim Case Assistance Program (MCAP) at 1-844-527-5299. You can also send an email to USAEO.MCAP@usdoj.gov.

This case was investigated by the FBI Washington Field Office and the Washington, D.C. Field Office of the Internal Revenue Service – Criminal Investigations.

It is being prosecuted by Assistant United States Attorney John Borchert.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

 

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Jury Finds 2 Guilty of Participating in Nationwide Foreclosure Rescue Scam

Stephanie Abbott —  December 1, 2022 — Leave a comment

Lorin Kal Buckner, 66, Hamilton, Ohio, and Dessalines Sealy, 59,  Brooklyn, New York, were two of four defendants who were convicted of crimes related to their participation in a foreclosure rescue scheme that defrauded at least 780 financially distressed homeowners throughout the United States. The defendants preyed on homeowners who had defaulted on their mortgages and convinced the victims to pay to take part in fraudulent programs on the promise it would save their homes

According to court documents and trial testimony, from 2013 through 2018, the defendants took advantage of homeowners’ desperation to save their homes and used money from homeowner victims to personally enrich themselves.

Co-conspirators used companies to engage in a multi-level marketing scheme. The companies named in this case include:

  • MVP Home Solutions, LLC, also known as
    • Stay In or Walk Away;
  • Bolden Pinnacle Group Corp., also known as
    • Home Advisory Services Network
    • Home Advisory Services Group Inc.; and
  • Silverstein & Wolf Corp.

Defendants promised affiliates commissions by recruiting distressed homeowners to the above-named companies.

They used multiple ways to recruit affiliates, including conference calls and direct mailings. For example, some co-conspirators hosted weekly conference calls where participants from across the country dialed in to hear details of the scheme and share sales strategies. During the calls, defendants encouraged affiliates to recruit homeowners to their companies on the promise of easy money.

Affiliates were encouraged to be aggressive in recruiting homeowners. Affiliates used online databases and court records to identify vulnerable, financially distressed homeowners who had recently received notice of foreclosure on their home.

Co-conspirators mailed more than 56,000 postcards in the Southern District of Ohio and elsewhere promising that they could “stop foreclosure” or “stop the sheriff sale” for a fixed fee. Co-conspirators also reached out to homeowners using Craigslist ads, websites, email and social media platforms.

On the promise of reducing or eliminating mortgage obligations in exchange for a fee, initial recruiters would collect payments from homeowners and refer the victims to the co-conspirator companies.

Among other things, the referral programs promised:

  • to negotiate with mortgage lenders on the homeowners’ behalf for the purchase of the mortgage notes at a discount;
  • to negotiate the sale of their home and release of their mortgage loans through a short sale and/or deed in lieu of foreclosure sale;
  • to stop an imminent foreclosure sale;
  • to remove the mortgage lien via a tender offer; and
  • achieve short sale prices at a fraction of the value of the outstanding lien/note.

Further, defendants represented that they had “proprietary” methods or “legal tactics” to help homeowners stall or completely avoid foreclosure. In actuality, the defendants persuaded homeowners to file chapter 13 bankruptcies to delay foreclosure actions.

Defendants filed skeletal bankruptcy petitions that they called “pump fakes” or “missiles,” These petitions intentionally failed to disclose the co-conspirators as preparers giving the appearance that the homeowners had filed the petitions pro se. Any relief from foreclosure delay was temporary until the bankruptcy court dismissed the proceeding.

Buckner and Sealy’s verdicts were announced today following the trial before Senior U.S. District Judge Michael R. Barrett. The other two trial defendants, Joel Harvey, 40, Cincinnati, Ohio and Garrett Stevenson, 45, Cincinnati, Ohio, pleaded guilty during the trial.

The jury convicted Buckner and Sealy of conspiracy to commit mail and wire fraud as well as conspiracy to commit bankruptcy fraud.

Buckner, Sealy, Harvey and Stevenson are four of 13 total defendants in this case.

“The defendants took advantage of folks’ financial despair and emotional vulnerabilities to fill their own pockets,” said U.S. Attorney Kenneth L. Parker. “It was a priority for our office and our law enforcement partners to address this nationwide foreclosure scheme.”

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Robert Manchak, Special Agent in Charge, Federal Housing Finance Agency –  Office of Inspector General (FHFA-OIG), Northeast Region; J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; Lesley C. Allison, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Pittsburgh Division; and Philip R. Bartlett, Inspector in Charge, USPIS, New York Division, announced today’s verdict. Assistant United States Attorneys Ebunoluwa A. Taiwo and Timothy S. Mangan are representing the United States in this case.

 

 

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Disbarred Attorney Sentenced Conspiring To Commit Foreclosure Fraud

Stephanie Abbott —  March 18, 2022 — Leave a comment

James Lee Clark ,61, Wilton Manors, Florida has been sentenced to 48 months in federal prison for conspiracy to commit bankruptcy fraud and wire fraud.

According to court documents, from January 2010 through February 2017, Clark, who was a licensed attorney, conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors holding notes on properties in foreclosure. Clark and Liebman falsely and fraudulently represented to distressed homeowners that they would negotiate with creditors and guarantors to prevent foreclosures in exchange for the homeowners’ execution of quitclaim or warranty deeds for the properties to an entity controlled by Liebman. Clark and Liebman also convinced the homeowners to pay rent or agree to sell their houses.  In order to continue collecting ill-gotten rents and/or profit from the property sales, Clark filed fraudulent bankruptcy petitions in the names of the homeowners to prevent the mortgage creditors from lawfully foreclosing and taking title to the properties.

Additionally, from January 2012 to February 2017, Clark defrauded his clients out of approximately $1.3 million. As part of his practice, Clark acted as a trustee for clients and held their money in various bank accounts.  Instead of using the funds for the purpose intended by his clients, Clark diverted the money into his law firm’s bank accounts, and used it for personal expenses, like gambling, travel, and automobiles.

Liebman previously pleaded guilty to conspiracy to commit bankruptcy fraud. He was sentenced to 15 months’ imprisonment.

Clark had pleaded guilty on December 14, 2021.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation. The Office of the United States Trustee for the Middle District of Florida (Tampa Division) provided substantial investigative support. It was prosecuted by Special Assistant United States Attorney Chris Poor.

 

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Two Charged with Defrauding HUD Program

Stephanie Abbott —  October 21, 2021 — Leave a comment

J. Reed Pirain, 45, and Renee Vasilko, 48, Upper St. Clair, Pennsylvania, have been indicted by a federal grand jury in Pittsburgh, on conspiracy and fraud charges.

According to the Indictment, from in and around February 2018, until in and around March 2019, Pirain and Vasilko knowingly and willfully conspired to defraud the Department of Housing and Urban Development and falsified statements by bidding on and purchasing property as intended homeowners, only to renovate and the sell the property for profit.

More specifically, the Department of Housing and Urban Development’s Single Family Property Disposition Program allows individuals to purchase a home from HUD after a Federal Housing Administration loan forecloses. The program is designed to encourage ownership by families who intend to reside in the homes as owner/occupants by allowing those families to bid on the foreclosed properties before the process is opened up to real estate investors who merely intend to profit, short-term, by “flipping” the houses. Here, as alleged, Pirain and Vasilko, in an effort to jump the line ahead of other real estate investors, falsely certified on bidding forms that Vasilko intended to occupy the home as an owner/occupant, when, in fact, Pirain and Vasilko intended to flip the home for profit. This unlawful abuse of the Single Family Property Disposition program has two effects that frustrate the program’s purpose: first, it can allow real estate investors to potentially outbid families who otherwise would purchase the home and reside in the community and, second, it allows real estate investors to jump the line and bid on foreclosed homes before other investors are eligible.

The law provides for a term of imprisonment of not more than five years in prison, a fine not greater than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Acting United States Attorney Stephen R. Kaufman made the announcement today.

Assistant United States Attorney Benjamin J. Risacher is prosecuting this case on behalf of the government.

The Department of Housing and Urban Development-Office of the Inspector General conducted the investigation leading to the Indictment in this case.

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

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Trio Sentenced in Bank Fraud of Troubled Asset Relief Program (TARP)

Stephanie Abbott —  July 23, 2021 — Leave a comment

Marvette Thompson Easterling, of Gaffney, South Carolina; Keylon Wright, 40, Simpsonville, South Carolina; and Joshua David Armato, 37, Georgia, today admitted that they knowingly defrauded a program established to help homeowners at risk of mortgage loan default and foreclosure of thousands of dollars. The three pleading guilty to bank fraud charges that defrauded the federal government’s Troubled Asset Relief Program (TARP).

Evidence presented in court showed that through false and fraudulent pretenses, representations, and promises, Easterling obtained funds from SC Housing, a federally funded mortgage payment assistance program that provided eligible homeowners with temporary mortgage assistance so that they could avoid foreclosure and stay in their homes. Easterling concealed and failed to notify SC Housing of monthly rental income she received for the property as well as the  nonowner-occupied status of the property in order to receive and use federal funds to which she was not eligible.

Additional evidence presented in court further showed that Wright executed a similar scheme for a property in Mauldin, South Carolina while Armato executed a similar scheme for a property in Simpsonville, South Carolina. Wright and Armato concealed and failed to notify SC Housing of the non-owner occupied statuses of their properties and the rental of the properties to unrelated third parties in order to receive and use federal funds to which they were not eligible.

U.S. District Judge Bruce Howe Hendricks ordered each defendant to a sentence of time served followed by five years of supervised release and the repayment of the stolen funds for the felony charges.

Acting United States Attorney M. Rhett DeHart made the announcement.

“With today’s sentencing, SIGTARP and the United States Attorney’s Office have brought justice for defendants who defraud and steal from the Hardest Hit Fund, a federal program that helps unemployed homeowners stay in their home,” said Special Inspector General Christy Goldsmith Romero. “Easterling, Wright, and Armato separately lied to get thousands of federal dollars for mortgage assistance, concealing that they did not live in the house and concealing rental income. Now they are convicted of fraud and must repay the stolen funds.”

“Stealing from the federal government, particularly from programs that help the least fortunate in America, will not be tolerated,” said Acting U.S. Attorney DeHart. “Our office appreciates the investigative work of the Special Inspector General for TARP (SIGTARP) and will continue to  work with SIGTARP to protect American tax dollars.”

The cases were investigated by SIGTARP, as an independent law enforcement agency used to investigate fraud, waste, and abuse related to the TARP bailout.

Assistant United States Attorney Winston Marosek prosecuted the cases.

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Call Center Manager Pleads Guilty to Defrauding Homeowners

Stephanie Abbott —  January 26, 2021 — Leave a comment

Edwin Josue Herrera Rosales aka “Josh Herrera,” 34, Washington pleaded guilty today to a conspiracy to defraud approximately 1,000 distressed homeowners facing foreclosure.  Herrera Rosales pleaded guilty to one count of conspiracy to commit wire fraud in connection with his operation of call centers that operated under the names “Sound Solutions Group,” “Community Assistance Center,” and California-based “Sienna Support Network.”

Herrera Rosales and his co-conspirators sent solicitation mailers to distressed homeowners nationwide.  The mailers promised that Herrera Rosales’ organization could reduce homeowners’ mortgage debts and lower their monthly payments.  When homeowners called the call center, operators put the callers through a phony “underwriting” process and then told the callers that the company’s legal and underwriting staff had determined it could negotiate a favorable mortgage modification in exchange for an upfront fee of $3,000.  In fact, the call center had no legal or underwriting staff, and many of the homeowners did not receive the promised modifications.

According to records filed in the case, Herrera Rosales conspired with others based in Southern California to operate the scheme.  Each week the operation sent approximately 4,000 mailers to distressed homeowners across the country.  The mailers stated that that the homeowner had been “pre-approved” for a new government program, under which Herrera Rosales’s organization could negotiate a mortgage modification.  For example, one mailer said that Herrera Rosales’s organization could reduce a borrower’s loan balance by over $140,000 and could reduce the interest rate to 2%.  The mailers urged the homeowners to call the Everett call center for assistance.

Herrera Rosales oversaw a staff of call center operators.  When homeowners contacted the call center, Herrera Rosales directed the operators to follow a script designed to make it appear as if each caller’s mortgage was being reviewed by the company’s “underwriting” and “legal department” to make sure the homeowner qualified for the supposed federal program.  In fact, the call center had no legal staff or underwriting department.  Instead, operators were instructed simply to put each caller on hold for a pre-determined amount of time, to make it appear a review was underway.  The operator then would return to the line and tell each victim that he or she was one of the “very select few” who qualified for the program—but only if the homeowner paid the call center a $3,000 fee.  If the homeowner balked at the fee, the call center staff had another script with certain “hot button” statements to persuade them to sign the documents.  It is impermissible under federal regulations to charge upfront fees for mortgage modification services.

Once the contracts were signed, the call center submitted the homeowner’s paperwork to a California-based loan processing group, which made some minimal efforts to restructure the debt.  While a limited number of customers obtained a lower monthly payment, the vast majority had no change or, in some cases, a higher monthly payment.  The call center used a phony address, and operators used aliases to disguise their identities.

Between March 2016 and May 2018, about 1,000 customers paid over $2.5 million to the various entities operated by Herrera Rosales.  After Herrera Rosales paid the expenses of the call centers and paid a share to his co-conspirators, he kept approximately $360,000.

Herrera Rosales is scheduled for sentencing by U.S. District Judge John C. Coughenour on May 4, 2021.

The announcement was made by U.S. Attorney Brian T. Moran.

The case is being investigated by the FBI.  The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

herrera_rosales_information.pdf

 

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Fraudster Sentenced in Fraudulent Mortgage Debt Reduction Scheme

Stephanie Abbott —  October 23, 2020 — Leave a comment

Anthony T. Williams, 49, Pineville, Louisiana was sentenced today in federal court to 240 months’ imprisonment for wire fraud and mail fraud in connection with a fraudulent mortgage relief scheme.

Williams marketed a fraudulent mortgage debt reduction scheme to distressed homeowners, who were mostly non-native English speakers in the Filipino immigrant community in Hawaii. Williams created two companies, Mortgage Enterprise Investments (MEI) and Common Law Office of America (CLOA), neither of which was licensed to service or modify mortgages. Through MEI, Williams made conflicting promises to clients that he could eliminate their existing mortgage obligations to their lenders, or reduce their mortgage obligations by half. Through CLOA, Williams promised legal representation in mortgage-related litigation and foreclosure proceedings. To give himself the appearance of credibility, Williams told prospective clients he was a “private attorney general” and brandished an official-looking law enforcement badge and credentials, despite not having a law license or any affiliation with law enforcement.

Williams falsely promised victims that he could eliminate their existing home mortgage obligations by filing bogus documents with the Hawaii Bureau of Conveyances. These documents included new MEI mortgages and notes obligating homeowners to make monthly payments to MEI. Williams then advised homeowners to stop making their mortgage payments to their lenders and to pay him instead.

Between 2012 and 2015, Williams enlisted 112 victims in Hawaii into his MEI program and fraudulently obtained over $230,000 from his victims, without providing any legitimate services. Several victims testified at trial that they had relied upon Williams’s representations and went into foreclosure or bankruptcy. Two victims testified that they lost their homes as a result of Williams’s scheme.

“For several years, Anthony Williams actively preyed upon distressed homeowners within the Filipino community here in the State of Hawaii. His scheme financially devastated his victims, forcing some into bankruptcy and homelessness. As a result of this prosecution, Williams’s scheme has come to an end and Williams will be incarcerated for 20 years. My office will continue to protect the most vulnerable members of our community,” said U.S. Attorney Price.

“Williams knowingly targeted and preyed upon citizens of our Filipino community” said Eli Miranda, Special Agent in Charge of the FBI’s Honolulu Division. “He took advantage of this vulnerable and in need population, delivering empty promises. He drained their finances leaving many penniless. The FBI cannot, and will not stand by. We will continue to maximize our efforts with partner agencies to bring these perpetrators to justice and hold them accountable for their crimes.”

A federal jury convicted Williams on March 3, 2020 of 32 counts of wire fraud and mail fraud after a four week trial.

In addition to a term of imprisonment, the Court also imposed three years of supervised release, and restitution. The Court’s sentence of imprisonment is to run consecutively to a fifteen-year sentence of imprisonment that another court had handed down earlier to Williams for similar fraudulent conduct in the State of Florida.

The investigation was led by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kenneth M. Sorenson and Gregg Paris Yates handled the prosecution.

 

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Couple Sentenced to More than Seventeen Total Years for Defrauding Home Buyers & Sellers

Stephanie Abbott —  October 5, 2020 — Leave a comment

Dana Q. Roush, 40, and her husband Michael “Bubba” Roush, 56, both of Greenville, South Carolina were sentenced to a total of seventeen years in federal prison and ordered to pay back more than $2.5 million after a jury found them guilty of conspiracy to commit mail fraud and equity skimming.

Evidence presented at trial showed that Dana and Bubba Roush owned and operated Kingdom Connected Investments, LLC (“KCI”).  They marketed their company as a Christian organization and promised to create “win-win” situations for home sellers and buyers. They sought homeowners who often owed more on their home than the property was worth, and buyers who lacked good credit and thus could not obtain a conventional mortgage.

KCI promised to relieve the homeowner from the burdens of mortgage payments by “buying” the home and placing a new buyer in the home who would rent-to-own.  KCI promised to make all the sellers’ mortgage payments.  KCI misled sellers to believe that they would be immediately removed from the property’s title and that they were no longer responsible for the original loan.

KCI promised the buyers an easy road to homeownership.  In exchange for the down payment (typically ten percent of the purchase price), the buyers were told that they were renting-to-own and building up equity.  KCI further concealed from the buyers that a third party – the seller – had an existing mortgage on the property that KCI was responsible for paying.

Rather than using the down payments and rents received from the buyers to pay the sellers’ mortgage payments, Bubba and Dana Roush used the money for personal expenses and to expand their real estate business.

The sellers, many of whom believed they were off the title and note, received foreclosure notices.  They learned that KCI, despite having a renter in the home, had stopped paying on the mortgage.  Buyers often learned they had no real ownership interest when the home was purchased by a third-party at a foreclosure sale and the new owner started eviction proceedings.

Victims of the scheme suffered myriad injuries including loss of money, shattered dreams, and ruined credit.  Special Agent Matt Jacobson of the Federal Bureau of Investigation (FBI) testified that KCI received $2.6 million from buyers and only paid $1.4 million in mortgage payments.  Approximately 130 properties were involved in the scam and Agent Jacobson testified that in only two instances did a buyer actually become a homeowner and a seller not face foreclosure and ruined credit.

Mrs. Roush was sentenced to more than eleven years, while her husband was sentenced to six and a half years.

United States Attorney Peter M. McCoy, Jr., made the announcement.

“These defendants here stole more than money. They robbed their victims of the American dream,” said U.S. Attorney McCoy. “For so many South Carolinians, times are tough right now. That these two defendants exploited that difficulty to line their own pockets is reprehensible, and this office will not tolerate it. I appreciate the jury’s verdict and the sentence handed down by the judge. I am especially thankful for the hard work form our federal partners in this case.”

“The fraud perpetrated by the defendants allowed them to steal millions of dollars from people who could not afford to lose any money,” said FBI Special Agent in Charge Jody Norris.  “The victims were robbed of their life savings, their homes, and the futures they had planned.  The Special Agents from the FBI and the investigators from the Department of Housing and Urban Development (HUD) who brought these defendants to justice, should be commended for their dedication and demonstration of our resolve to fully investigate these fraudulent schemes in South Carolina.”

“The core of our mission is to protect the Department of Housing and Urban Development from those that would seek to defraud its programs for the sole purpose of enriching themselves at the government’s expense,” said Wyatt Achord, Special Agent in Charge, HUD Office of Inspector General (OIG). “We remain committed toward working with the U.S. Department of Justice to pursue any individual who attempts to defraud the government.”

United States District Judge Timothy M. Cain sentenced Mrs. Roush to 136 months in federal prison, to be followed by a three-year term of court-ordered supervision. Judge Cain sentenced Mr. Roush to 78 months in federal prison, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system. Judge Cain also ordered the defendants to pay $2,664,796.69 in restitution.

The case was investigated by the FBI and HUD OIG. Assistant U.S. Attorney Bill Watkins

 

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Former Attorney Charged in Foreclosure Fraud Scheme

Stephanie Abbott —  May 27, 2020 — Leave a comment

James Lee Clark, 59, Wilton Manor, Florida has been charged with one count of conspiracy to commit bankruptcy fraud, seven counts of bankruptcy fraud, one count of making a falsification of records in a bankruptcy proceeding, and eight counts of wire fraud.

According to the indictment, from January 2010 through February 2017, Clark conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors, such as Fannie Mae, who were holding mortgage notes on properties that were in foreclosure. The indictment further charges that Clark and Liebman falsely and fraudulently represented to the distressed homeowners facing foreclosure that, in exchange for executing quitclaim or warranty deeds for their properties to an entity controlled by Liebman, they would negotiate with the mortgage creditors to prevent foreclosures. Clark and Liebman convinced the distressed homeowners to pay them rent, or agree to put their houses up for sale. In order to continue to collect ill-gotten rents, or profit from the sale of the properties, Clark allegedly filed fraudulent bankruptcy petitions in the names of the homeowners to prevent the mortgage creditors from lawfully foreclosing and taking title to the property. In some instances, Clark filed multiple fraudulent petitions in the names of distressed homeowners.

Additionally, it is further alleged that, from January 2012 to February 2017, Clark, who was a licensed attorney, defrauded his clients out of approximately $1.3 million. As part of his practice, Clark would act as a trustee for his clients and also hold their money in various bank accounts depending on the purpose of trust.  Instead of using the funds for the purpose intended by his clients, Clark would divert the money into his law firm’s bank accounts and pay for personal expenses, such as gambling, travel, and automobiles.

Liebman pleaded guilty to one count of conspiracy to commit bankruptcy fraud on September 24, 2019. His sentencing hearing is scheduled for January 14, 2021.

United States Attorney Maria Chapa Lopez made the announcement.

If convicted, Clark faces up to 20 years’ imprisonment for the falsification of records count and for each wire fraud count. He faces up to 5 years in federal prison for the conspiracy count, and for each bankruptcy fraud count. The indictment also notifies Clark that the United States is seeking a money judgment of $1.3 million, the proceeds of the charged criminal conduct.

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 Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. The Office of United States Trustee for the Middle District of Florida, Tampa Division provided substantial investigative assistance. It will be prosecuted by Special Assistant United States Attorney Chris Poor.

 

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