Archives For foreclosure fraud

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.

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.

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

 

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.

 

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

 

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.

 

Vision Property Management, LLC, a South Carolina based real estate company, its CEO Alex Szkaradek, and a number of affiliated companies have agreed today, subject to court approval, that more than $3.75 million will be paid in consumer restitution for engaging in and operating an illegal, deceptive, and unlicensed mortgage-lending business that targeted, among others, the disabled, the elderly, single parents, and others living on fixed incomes.

Specifically, the settlement includes cash payments of $600,000 that will be distributed to numerous New York consumers who were victims of Vision’s conduct and have, for the most part, moved out of their previous homes. Additionally, more than $3.15 million in unpaid principal for 58 homes will be forgiven by Vision as restitution. The ownership of these 58 homes will be transferred, free and clear of any future payments, to Vision’s current New York consumers. Additionally, the defendants must wind down their remaining business in New York over the following year, and along with any businesses they take a controlling interest in, are permanently enjoined from engaging in any future residential real estate business in New York.

The settlement is set to resolve an August 2019 federal lawsuit, filed in the Southern District of New York, alleging that, since at least 2011, Vision and its affiliates profited from predatory, subprime home loans at the expense of some of the most vulnerable New Yorkers, primarily in Upstate and Central New York. In the complaint, Attorney General James and Superintendent Lacewell accused the company of buying severely distressed properties and marketing them at a substantial markup with high-cost, interest rates, in the range of 10% to 25%. Vision rarely disclosed these high interest rates and typically made no repairs or renovations to the dilapidated homes they were selling, illegally passing those costs on to consumers. Further, Vision was not properly licensed to engage in seller finance lending in New York, which it was required to be beginning in late 2011, and thus was operating illegally when entering into these transactions.

The lawsuit further charged that Vision targeted vulnerable consumers who , by the company’s own admission, were eager to share in the American dream of homeownership, but could not qualify for conventional financing due to various employment, health, marital, or other financial reasons. While Vision claimed its “unique” business model was a path to homeownership, in reality, the company made significant profits with little risk by skirting consumer protections and financial regulations and trapping consumers with high cost mortgages and often uninhabitable homes.

Despite placing the burden of repairing and maintaining the homes on consumers, Vision did not fully disclose the many dangerous, unhealthy, and unsafe conditions in its homes, and in many instances concealed the extent of these conditions by leaving the electricity and other utilities turned off while consumers took walk throughs of the homes. These conditions included pest infestations; faulty electrical wiring; water damage; missing heaters, pipes, water tanks, and septic systems; mold; asbestos; foundation damage; and severely damaged and rotted out, floors, windows, walls, and roofs. The high cost of Vision’s loans combined with the significant cost of repairing these violations set consumers up to fail. Moreover, Vision routinely evicted consumers who had invested substantial sums of money in repairs without offering them the foreclosure protections to which they were entitled.

The settlement being announced today is still subject to final court approval.

New York Attorney General Letitia James and New York Superintendent of Financial Services Linda Lacewell made the announcement.

Vision’s illegal and deceptive practices that were targeted against New York’s most vulnerable residents will finally be put to an end,” said Attorney General James.Owning a home is what millions of New Yorkers dream of, but Vision turned that dream into a nightmare. Not only are we shutting down this company’s illegal New York racket, but we are securing restitution for the many victims and are ensuring 58 families have their mortgage debts wiped away. A fair and transparent housing market is essential for the health, welfare, and economic stability of New York and its residents, which is why my office will never stop fighting to hold companies responsible for their deceptive actions. I want to thank Superintendent Lacewell and her team at DFS for their partnership and diligent work throughout this case.”

Vision property management stole from hundreds of New Yorkers who sought the American dream of homeownership,” added Superintendent Lacewell. “This settlement holds Vision accountable for their illegal actions and provides a measure of restitution to New Yorkers who were victimized by Vision’s predatory practices. This is a clear message that New York has zero tolerance for those who rely on deception and fraud to turn a profit, and I commend Attorney General James and the staff of both DFS and the Attorney General’s office for their hard work on this important matter.”

In August 2019, Attorney General James and Superintendent Lacewell reached a settlement with New York-based hedge fund Atalaya Capital Management LP, for its role in funding and assisting Vision and its affiliates in their illegal business. Under that settlement, Atalaya paid New York $250,000 in civil penalties, agreed to abide by injunctive terms intended to prevent future wrongdoing, and paid more than $2.5 million in restitution to consumers, which is now being distributed to more than 100 New York homeowners in the form of monetary payments and payment cancellation.

This matter was handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Bureau Chief Jane M. Azia and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo and First Deputy Attorney General Jennifer Levy.

Additional attorneys handling this matter for the Department of Financial Services included Deputy Superintendent Peter C. Dean and Supervising Attorney in the Consumer Protection and Financial Enforcement Division Cynthia M. Reed.

Judge issues arrest warrant for Montgomery County man charged with mortgage fraud  – Patricia Duckett cries as she recounts how she lost her home of nearly 20 years, Nov. 6, 2019, in District Heights, Md. (Katherine Frey/The Washington Post) Patricia Duckett cries as she recounts how she lost her home of nearly 20 years, Nov. 6, 2019, in District Heights, Md. (Katherine Frey/The Washington Post) By Rachel Chason Jan. 3, 2020 at 9:51 a.m. PST A Prince George’s County Circuit Court judge issued an arres

Source: Judge issues arrest warrant for Montgomery County man charged with mortgage fraud – The Washington Post

Omar Anabo, 57, Vallejo, California has been sentenced to three years in prison for conspiracy to make false statements on loan applications and ordered to pay $379,068 in restitution to victims of the conspiracy.

According to court documents, between Oct. 2004 and May 2007, Anabo and co‑conspirators Sergio Roman Barrientos, 66, and Zalathiel Aguila, 46, operated Capital Access LLC in Vallejo, a company that preyed on homeowners nearing foreclosure. The defendants convinced homeowners to sign over the title to their homes to Capital Access and then spent any equity those homeowners still had, which was then used for operational expenses of the scheme and personal expenses of Anabo and his co-conspirators. http://www.mortgagefraudblog.com/?s=Omar+Anabo

The defendants also used straw buyers to obtain home loans under false pretenses and defraud federally insured financial institutions out of millions of dollars. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

Barrientos was sentenced on Nov. 2, 2018, to 14 years in prison for his role in the scheme. Aguila was sentenced on July 26, 2019, to four years in prison.

U.S. Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Christina McCall prosecuted the case.

 

Ruby Price, 74, Bonner Springs, Kansas was sentenced today to a year and a day in prison for swindling homeowners facing foreclosure with false promises to help them save their homes

Price was a managing partner of Arize Group, a company based in Overland Park, Kansas. http://www.mortgagefraudblog.com/?s=Ruby+Price

She and co-defendants took money from distressed homeowners by fraudulently promising to:

  • Lower their interest rates.
  • Lower their monthly payments
  • Help them obtain loan modifications.

Price pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.

U.S. Attorney Stephen McAllister made the announcement.

McAllister commended the U.S. Department of Housing and Urban Development – Office of Inspector General, the Federal Housing Finance Agency – Office of Inspector General, the Johnson County District Attorney’s Office, Special Assistant U.S. Attorney Emilie Burdette and Assistant U.S. Attorney Jabari Wamble for their work on the case.