Archives For Illinois

R. E. Developer Charged in Mortgage Fraud Scheme

Stephanie Abbott —  February 2, 2021 — Leave a comment

Andrzej Lajewski, 53, formerly of Wheeling, Illinois, a real estate developer, who owned Des Plaines-based Highland Consulting Corp., and Chicago-based Quality Management and Remodeling Inc., has been indicted with three others for allegedly participating in a mortgage fraud scheme that defrauded financial institutions out of at least $3 million.

According to an indictment returned Jan. 28, 2021, Lajewski schemed with two mortgage professionals and the owner of a remodeling company to fraudulently obtain at least $3 million in mortgage loans by making and causing to be made materially false representations to financial institutions regarding the buyers’ qualifications for the loans. The false representations concerned the buyers’ employment history, income, assets, source of down payment, and intention to occupy the properties, the indictment states.  In some instances Lajewski fraudulently claimed to lenders that the buyers were employed by his companies – even though he knew that was untrue – to help the buyers qualify for the mortgage loans, the indictment states.

The alleged fraud scheme lasted from 2010 to 2016 and involved numerous properties on the South Side of Chicago.

The indictment charges multiple counts of financial institution fraud against Lajewski, and two mortgage professionals – loan originator Agnieszka Siekowski, 46, Northbrook, Illinois and loan processor Aldona Bobrowicz, 45, Arlington Heights, Illinois and the home remodeler, Andrzej Bukowski, 66, formerly of Wheeling, Illinois.  Arraignments for Siekowski and Bobrowicz are scheduled for Friday at 10:00 a.m. before U.S. District Judge Martha M. Pacold.  Arraignments for Lajewski and Bukowski have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General.  The government is represented by Assistant U.S. Attorneys Kalia Coleman and Jason Yonan.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of financial institution fraud is punishable by up to 30 years in federal prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

 

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Man Charged with Defrauding Mortgage Assistance Program

Stephanie Abbott —  October 23, 2020 — Leave a comment

Mohammad Shabazz Khan, Bourbannais, Illinois was indicted yesterday on four counts of making false claims to obtain federal mortgage assistance funds from the Troubled Asset Relief Program’s billion-dollar component Hardest Hit Fund (HHF), which was provided to Indiana’s housing finance agency to help unemployed and underemployed homeowners stay in their homes. The indictment alleges the defendant took assistance but did not live in his home.

Khan received $29,926.46 in mortgage assistance to which he was not entitled.

The Hardest Hit Fund was meant to help Indiana families stay in their homes in the aftermath of the 2008 economic crisis. The Hardest Hit Fund program in Indiana is administered by the Indiana Housing and Community Development Authority. In order to receive this mortgage assistance, an applicant was required to be an Indiana homeowner; own only one home; and reside in that home.

If convicted, any specific sentence to be imposed will be determined by the Judge after a consideration of federal statutes and the Federal Sentencing Guidelines.

This case was investigated by the U.S. Department of Treasury’s Office of Special Inspector General for the Troubled Asset Relief Program (SIGTARP). This case is being prosecuted by Assistant United States Attorney Molly Kelley. SIGTARP was created as an independent law enforcement agency to investigate fraud, waste, and abuse related to the TARP bailout. To date, SIGTARP investigations have resulted in the recovery of over $11.2 billion, 389 criminal convictions and 305 defendants sentenced to prison.

The United States Attorney’s Office emphasizes that an Indictment is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.

United States Attorney Thomas L. Kirsch II, made the announcement.

“I commend the Office of the U.S. Attorney for the Northern District of Indiana for standing with SIGTARP to combat fraud against homeownership preservation programs,” said Christy Goldsmith Romero, Special Inspector General.

To report a suspected crime related to TARP, call SIGTARP’s Crime Tip Hotline: 1-877-SIG-2009 (1-877-744-2009). To receive alerts about reports, audits, media releases, and other SIGTARP news, sign up at www.SIGTARP.gov/pages/press.aspx. Follow SIGTARP on Twitter @SIGTARP.

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Man Charged with Defrauding a Mortgage Assistance Program

Stephanie Abbott —  October 22, 2020 — Leave a comment

Mohammed Shahbaz Khan, 45, Bourbonnais, Illinois was indicted for making false claims in connection with his receipt of money from the Hardest Hit Fund, a federal mortgage assistance initiative offered by the U.S. Treasury Department’s Troubled Asset Relief Program.

According to the indictment, the purpose of the Hardest Hit Fund was to help stabilize communities in states, like Indiana, that were “hardest hit” by the 2008 economic and housing market downturn.  The Hardest Hit Fund program in Indiana is administered by the Indiana Housing and Community Development Authority.  In order to receive this mortgage assistance, an applicant was required to be an Indiana homeowner; own only one home; and reside in that home.

The indictment alleges that Khan knowingly submitted false statements about his residency in order to obtain Hardest Hit Fund mortgage assistance on an Indiana property, while living elsewhere.  Over 18-months, Khan allegedly received $29,926.46 in mortgage assistance, to which he was not entitled.

U.S. Attorney Kirsch made the announcement.

“Today, an Illinois man was charged with defrauding a long-term federal economic stability program, intended to help people stay in their homes, knowing that he did not qualify,” said Christy Goldsmith Romero, Special Inspector General of the U.S. Treasury Department’s Troubled Asset Program (SIGTARP).  “We commend the Office of the U.S. Attorney for the Northern District of Indiana for standing with SIGTARP to combat fraud against homeownership preservation programs.”

The United States Attorney’s Office emphasizes that an Indictment is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.

If convicted, any specific sentence to be imposed will be determined by the Judge after a consideration of federal statutes and the Federal Sentencing Guidelines.

This case was investigated by the U.S. Department of Treasury’s Office of Special Inspector General for the Troubled Asset Relief Program (SIGTARP).  This case is being prosecuted by Assistant United States Attorney Molly Kelley.

 

 

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Duo Sentenced In HUD Fraud Scheme

Stephanie Abbott —  November 1, 2019 — Leave a comment

Sergio Garcia, Sr., 50, Chicago, Illinois and Sergio Garcia, Jr., 30, of Lowell, Indianapolis were sentenced on their guilty pleas to conspiracy to commit mail fraud.

According to documents in the case, between January 1, 2011 and May 31, 2014, the Garcias conspired with others to engage in a scheme to defraud HUD and to obtain money and property by means of false pretenses, representations and promises.  The scheme involved contracting with HUD to buy more than 87 homes in Indiana and Illinois and attempting to sell them for a profit the same day. The purchase contracts the conspirators provided to HUD stated that they or one of their businesses were purchasing the properties as investors and would pay with cash or use other financing not involving FHA. To support their claimed ability to pay for the homes, the conspirators mailed fraudulent letters purporting to show that they or their company had access to the funds needed to complete each purchase.  Many of the letters purported to be written by a private venture capital business and falsely stated that the Garcias or their business held a line of credit of up to $500,000.00, when in fact, as the conspirators well knew: the letters were forged and counterfeited; the lines of credit referenced therein did not exist; and the signatures thereon were forged and unauthorized.

Once under contract to purchase homes from HUD, the conspirators advertised the homes for subsequent resale and placed their own “for sale” signs at the homes. When the conspirators could not find a subsequent purchaser to buy the homes, they allowed their purchase contracts with HUD to expire and filed false liens on the homes for the full purchase price, impeding HUD’s ability to sell the homes to others. In some instances, the conspirators demanded money from would-be subsequent purchasers to release the false liens on the HUD-owned homes.

Garcia, Sr. was sentenced to serve 70 months in prison followed by 2 years of supervised release and was ordered to pay $471,571.06 in restitution to the Department of Housing and Urban Development (“HUD”) and $3,862 in restitution to other victims of his crime.

Garcia, Jr. was sentenced to serve 18 months in prison followed by 1 year of supervised release and was ordered to pay $24,819.53 in restitution to HUD and $202.25 to other victims of his crime

“This sentencing serves as an example that when housing professionals defraud the system of rules sponsored by  HUD, the HUD Office of Inspector General will continue to partner with both the U. S. Attorney’s Office and the FBI to pursue those individuals to ensure the integrity of its federal housing programs.”

“If you attempt to defraud the system and violate public trust, we will find you, we will investigate you, and we will ensure you are held accountable for your illegal actions,” said Special Agent in Charge Grant Mendenhall, FBI Indianapolis. “Today’s sentence should serve as a warning to others that the FBI and our partners will continue to pursue those who would seek to blatantly commit fraud.”

The case was investigated by the Federal Bureau of Investigation and the HUD Office of Inspector General.  The case was handled by Assistant United States Attorney Jill R. Koster.

 

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Probe into Bank Fraud Adds Two New Defendants

Stephanie Abbott —  July 29, 2019 — Leave a comment

Jason Schiff, 40, Lincolnwood, Illinois is charged with three counts of bank fraud, according to a superseding indictment returned July 24, 2019.  The superseding indictment also charges Jason Schiff’s brother, Yale Schiff, 44, Riverwoods, Illinois with 12 counts of bank fraud and two counts of aggravated identity theft.

According to the charges against the Schiffs, Yale Schiff made false statements in loan applications to obtain millions of dollars in mortgage loans secured by a variety of properties.  The charges allege that Yale Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Yale Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.  The fraud allegedly committed by Jason Schiff arose out of bank loans for vehicles and a loan secured by real estate purchased from Yale Schiff.

A separate indictment returned July 17, 2019, charges Yale Schiff’s business associate, David Izsak, 44, Chicago, Illinois with eleven counts of bank fraud and one count of aggravated identity theft.  During the investigation, federal authorities seized Izsak’s 57-foot Carver 570 Voyager yacht known as the “Flying Lady.”  The indictment seeks forfeiture of the yacht, as well as a personal money judgment against Izsak of approximately $4 million.  Izsak pleaded not guilty at his arraignment earlier this month.

The charges against Izsak accuse him of fraudulently obtaining loans secured by real estate and vehicles.  Izsak allegedly submitted or caused to be submitted to the Cook County Recorder of Deeds fake letters purporting to be from the lender, purporting to congratulate Izsak for paying his loan in full and releasing the lien.  In reality, the letters were not from the lender, the loans were not paid in full, and the liens were not released, the indictment states.

Izsak and Yale Schiff are each accused of fraudulently obtaining loans by using names, Social Security numbers and dates of birth that did not belong to them.  Izsak also used a stolen identity to obtain a credit card, while Yale Schiff used fake and stolen identities to fraudulently obtain a charge card at Nordstrom department store and loans for a Jeep Grand Cherokee and a Lexus RX350, the indictment states.

Yale Schiff was initially charged in the case last month.  The Schiffs pleaded not guilty today.

The indictments were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory sentence of two years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

 

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Businessman Indicted for Bank Fraud and Identity Theft

Stephanie Abbott —  June 6, 2019 — 1 Comment

Yale Schiff, 44, Riverwoods, Illinois, a north suburban businessman has been indicted on Wednesday, on bank fraud and identity theft charges for allegedly fraudulently obtaining millions of dollars in mortgage and vehicle loans and using stolen identities to secure credit from financial institutions.

Schiff made false statements in loan applications to obtain mortgage loans secured by a variety of properties, according to an indictment returned in U.S. District Court in Chicago.  The charges allege that Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.

The identity theft charges pertain to Schiff’s alleged use of multiple fake and stolen identities to fraudulently obtain loans for vehicles, including a Jeep Grand Cherokee and a Lexus RX350.  The indictment accuses Schiff of submitting to the Recorder’s office fake letters from financial institutions and false releases of the vehicle liens, claiming that the loans were paid in full.  In reality, Schiff knew the letters were bogus and that the loans were not paid in full, the indictment states.  Schiff then allegedly sold the vehicles, keeping the proceeds without paying the loans.

Schiff also used stolen identities to obtain lines of credit and credit cards, including a charge card at Nordstrom department store that he used for personal use, the indictment states.  He then allegedly left large unpaid balances on the cards and the credit lines.

The charges allege that three of Schiff’s relatives and a business associate aided him in the schemes.  The indictment seeks forfeiture of a personal money judgment of approximately $4.7 million, as well as a property in Riverwoods.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory minimum sentence of two years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

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A.G. Announces $1.2 Million Settlement with Mortgage Company

Stephanie Abbott —  October 24, 2018 — 1 Comment

Diamond Residential Mortgage Corporation, Illinois, entered into a settlement today under which the company will pay $1.2 million to eligible consumers who were defrauded by one of the company’s branch managers.

According to the investigation, allegations were made that Diamond’s Springfield branch manager, Chris R. Schaller defrauded individuals seeking mortgage loan. In some cases, borrowers believed they were obtaining a mortgage when Schaller actually placed them into a different type of transaction, a contract for deed, which can be financially riskier for borrowers than a traditional mortgage. Additionally, in some instances, consumers did not receive signed copies of their agreements with Schaller. In other instances, IDFPR found evidence that Schaller engaged in fraudulent loan origination activities. Madigan’s office is conducting a separate investigation of Chris Schaller, which is ongoing.

Attorney General Lisa Madigan with the Illinois Department of Financial and Professional Regulation (IDFPR) made the announcement.

Madigan entered the settlement, an assurance of voluntary compliance, with Diamond Residential Mortgage Corporation (Diamond), a residential mortgage company based in Lake Forest, Illinois. The agreement resolves an investigation by Madigan’s office and IDFPR into alleged mortgage fraud at Diamond’s Springfield branch.

“I appreciate the Department of Financial and Professional Regulation’s partnership with my office to root out mortgage fraud at Diamond Residential’s Springfield branch,” Madigan said. “I encourage people to file a complaint with my office if they think they could qualify to receive compensation.”

Under the settlement, Diamond agrees to pay $1.2 million that Madigan’s office will distribute to consumers defrauded by Schaller. Madigan’s office and IDFPR will work together to conduct a claims process for consumers who were aggrieved by Schaller’s practices to request compensation from a fund that will be managed by Madigan’s office. Consumers who wish to be considered for compensation from the $1.2 million fund should file a complaint with Madigan’s Consumer Fraud Bureau in Springfield. Complaint forms are available on Madigan’s website or by calling her Consumer Fraud Hotline at 1-800-243-0618.

Bureau Chief Elizabeth Blackston, Deputy Bureau Chief Paul Isaac and Assistant Attorney General Justin Tabatabai are handling the settlement for Madigan’s Consumer Protection Division.

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Federal Jury Convicts Illinois Attorney in Mortgage Fraud Scheme

Stephanie Abbott —  February 15, 2018 — Leave a comment

Jessica Arong O’Brien, 50, Chicago, Illinois was convicted after trial of fraudulently obtaining loans related to the purchase, maintenance and sale of properties on Chicago’s South Side by causing lenders to issue and refinance approximately $1.4 million in mortgage and commercial loans by making false representations and concealing material facts in documents submitted to the lenders.  O’Brien used the fraudulently obtained mortgage loan proceeds to purchase an investment property in the 600 block of West 46th Street, Chicago, Illinois.  She fraudulently refinanced the mortgage on the property, as well as on a second investment property in the 800 block of West 54th Street, Chicago, Illinois.  O’Brien then fraudulently obtained a commercial line of credit to maintain the properties, before selling them to a loan officer – co-defendant Maria Bartko and a straw buyer whom O’Brien knew would fraudulently obtain mortgage loans.

Evidence at trial revealed that O’Brien carried out the fraud scheme from 2004 to 2007.  At the time, O’Brien was employed as a Special Assistant Attorney General for the Illinois Department of Revenue, while also owning a real estate company, O’Brien Realty LLC, and working part time as a loan officer for Amronbanc Mortgage Corp. in Lincolnwood, Illinois.  At the time, Bartko was employed at Amronbanc as a loan officer.

The jury convicted O’Brien on both counts against her, including one count of mail fraud affecting a financial institution, and one count of bank fraud.  Each count is punishable by a maximum sentence of 30 years in prison.  U.S. District Judge Thomas M. Durkin set sentencing for July 6, 2018.

Bartko, Chicago, Illinois pleaded guilty before trial to one count of mail fraud affecting a financial institution.  Judge Durkin will schedule Bartko’s sentencing hearing at a later date.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Catherine Huber, Special Agent-in-Charge of the Central Region of the Federal Housing Finance Agency, Office of Inspector General.  The government is represented by Assistant U.S. Attorneys Matthew F. Madden and Tyler C. Murray.

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Brothers Charged with Fraud for Allegedly Controlling Property Appraisals

Stephanie Abbott —  December 14, 2017 — 1 Comment

Steven Garcia, 45, Schaumburg, Illinois and his brother, Michael R. Garcia, 43, Streamwood, Illinois, two suburban mortgage brokers, have been charged with fraudulently operating a purportedly independent appraisal management company to control property valuations, and brokering fraudulent loans to finance real estate transactions between themselves and nominees.

The brothers operated American Financial Mortgage Services Inc., a licensed mortgage brokerage in Schaumburg, Illinois.  According to a criminal information filed Wednesday in federal court in Chicago, the brothers fraudulently caused lenders to make mortgage loans brokered by American Financial by falsely representing that the supporting property appraisals were performed by independent appraisers, when, in fact, the Garcias and American Financial employees selected the appraisers, managed the appraisal process, influenced property valuation and paid the appraisers.

According to the charges, the Garcias bypassed FHA regulations by controlling a purportedly independent appraisal firm, Residential Appraisal Management Company Inc., through a nominee.  The Garcias fraudulently used RAMCI to steer appraisals to hand-picked appraisers, including a relative of the Garcias, who would provide an appraised value sufficient to support a proposed loan, while falsely representing to lenders that RAMCI selected appraisers based on experience and skill, the information states.

The Garcias also fraudulently caused lenders to make mortgage loans to finance fraudulent real estate transactions in which the Garcias and their nominees purchased and re-sold residences at inflated prices to unqualified nominees who then defaulted on the loans, the information states.  The Garcias furnished lenders with false employment and income information to support the nominees’ loan applications, and then provided the nominees with the money to make the purchases, the information states.  The Garcias fraudulently obtained approximately $1.9 million that was disbursed at the closings of the fraudulent real estate transactions, and another $274,000 in commissions from those deals, the information states.

Each are charged with one count of mail fraud and one count of wire fraud.  Arraignments in federal court in Chicago have not yet been scheduled.

Each count in the information is punishable by up to 30 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The government is represented by Assistant U.S. Attorneys Brian Netols and Matthew Ebert.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

Federal Housing Administration regulations prohibit mortgage brokers from having substantive communications with appraisers relating to valuation of properties, including ordering or managing an appraisal assignment, and from paying appraisers.  Lenders rely on independent appraisals conducted within FHA regulations.

The public is reminded that an information is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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Indictment in Fake Rental Ponzi Scheme

Rachel Dollar —  August 27, 2015 — 2 Comments

A father and son schemed with a Chicago attorney and a Lincolnwood businessman to sell $2.9 million in phony mortgages to more than a dozen duped investors, according to a federal indictment.

Albert Rossini, 67, the owner of Devon Street Investments Ltd., Lincolnwood, Illinois plotted with Babajan Khoshabe, 74, Chicago, Illinois, and Khoshabe’s son, Anthony Khoshabe, 33, Skokie, Illinois, to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment. The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process, the indictment states. In reality, it was a ponzi scheme.  the trio did not own the mortgage notes, and instead used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment. Continue Reading…

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