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Two Arraigned In Reverse Mortgage Scheme

Stephanie Abbott — March 18, 2019 — Leave a comment

Rafael Peralta, 46, Clifton, New Jersey, and Philip Puccio Jr., 40, Mahwah, New Jersey were arraigned today for their respective roles in a reverse mortgage scheme that took advantage of several elderly homeowners.

According to documents filed in this case and statements made in court:

From November 2007 through December 2010, Peralta and Puccio, home repair contractors, allegedly conspired to fraudulently obtain Home Equity Conversion Mortgage (HECM), also known as reverse mortgage, proceeds by submitting inflated and fraudulent documentation to various victim banks to influence their decision to approve and fund HECMs. Peralta and Puccio recruited a conspirator to prepare inflated real estate appraisals that falsely increased the value of the properties securing the HECMs, thereby influencing each lender’s decision to provide loans in amounts greater than what would otherwise be available.

Peralta and Puccio also caused the submission of false and fraudulent loan documents that actively concealed the disbursement of loan proceeds to Peralta, Puccio, and entities they owned and controlled. The diverted loan proceeds were deposited into bank accounts controlled by Peralta and Puccio and used for their personal benefit and to further the conspiracy.

Peralta and Puccio Jr., were indicted February 8, 2019, by a federal grand jury on one count of conspiracy to commit bank fraud and six counts of bank fraud. They were arraigned March 15, 2019, before U.S. District Judge Anne E. Thompson in Trenton federal court.

The conspiracy to commit bank fraud and bank fraud charges carry a maximum potential penalty of 30 years in prison, a fine of $1 million, or twice the gross pecuniary gain by the defendants or twice the gross pecuniary loss to others, whichever is greater.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency, Office of the Inspector General, under the direction of Acting Special Agent in Charge Robert Manchak; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; and special agents of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading the charges.

The government is represented by Special Assistant U.S. Attorneys Kevin Di Gregory and Charlie Divine of the U.S. Attorney’s Office Criminal Division in Newark and the Federal Housing Finance Agency, Office of the Inspector General.

In Mortgage Fraud False Documents, New Jersey, Reverse Mortgage

Appraiser ID Theft and Inflated HECM Appraisals Underlie Indictment

Rachel Dollar — August 30, 2017 — 2 Comments

Eugene Peter Kenworthy, Jr., 50, appraiser, Ambler, Pennsylvania, was charged by Indictment with wire fraud, false statements for the purpose of influencing the Federal Housing Administration, aggravated identity theft, and failure to file a tax return.

The indictment alleges that, beginning as early as 1993, Kenworthy worked at Tech Review LTD, a real estate appraisal company owned by Kenworthy’s father. Kenworthy began managing Tech Review after his father’s death in 2003 and sold the company in 2012 after which he formed two other companies, Global Appraisal Management and East Coast Appraisal Management.

According to the indictment, from March 2010 to February 2016, Kenworthy appraised approximately 714 properties which were the subject of HECM loan applications. Kenworthy used the electronic signatures of five certified appraisers without their knowledge and consent to certify approximately 294 of those appraisals reports. Those appraisers did not appraise the properties or write the reports. Kenworthy used his own signature to certify the other approximately 420 appraisal reports he wrote. Most of the appraisals were for a single mortgage broker/origination company which paid Kenworthy about $450 per appraisal.

Also according to the indictment, Kenworthy made false statements in some of the HECM appraisal reports which resulted in falsely inflated valuations for the properties and, fraudulently inflated the HECM loan amounts. The indictment details several of these transactions.

As of July 2017, of the 714 properties for which Kenworthy wrote an appraisal report for a HECM, FHA had paid 53 claims totaling almost $3.7 million on foreclosed properties where the sales price of the home was insufficient to cover the HECM loan.

Kenworthy was added to the FHA appraiser roster in 1999 and, in or about January 2016, HUD suspended Kenworthy, barring him from performing FHA appraisals.

If convicted the defendant faces a maximum possible sentence is 166 years’ imprisonment, five years of supervised release, a $5,050,000 fine, and a $1,000 special assessment

The indictment was announced Acting United States Attorney Louis Lappen. The case was investigated by the United States Department of Housing and Urban Development – Office of Inspector General and the Internal Revenue Service – Criminal Investigation, and is being prosecuted by Assistant United States Attorney Karen L. Grigsby.

In Mortgage Fraud Appraisal Fraud, Appraiser, inflated appraisal, Pennsylvania, Reverse Mortgage

Reverse Mortgage Schemers Charged

Rachel Dollar — June 27, 2017 — Leave a comment

Mark Steven Diamond, 60, Chicago, Illinois, a mortgage loan originator with offices in Chicago and Calumet City, was indicted and arraigned on federal fraud charges for his alleged role in a scheme to bilk elderly homeowners out of millions of dollars. According to the indictment, he engaged in a home repair and loan fraud scheme that targeted elderly homeowners and lenders. Diamond fraudulently caused lenders to make reverse-mortgage loans to homeowners who either did not sign up for the loans or did so unwittingly after Diamond intentionally misrepresented the terms, the indictment states. Diamond fraudulently pocketed the loan checks by causing title company representatives, including an unindicted co-schemer, to provide the checks to Diamond rather than the homeowners. The indictment seeks forfeiture of $7 million from Diamond.

Diamond pleaded not guilty at his arraignment to seven counts of wire fraud. U.S. District Judge Robert M. Dow Jr. scheduled a status hearing for August 28, 2017, at 9:00 a.m.

According to the indictment, Diamond targeted his victims, who ranged in age from 62 to 97, based on the equity in their homes and their relative lack of financial sophistication. If a victim’s relative questioned Diamond on the need for a reverse mortgage, Diamond would schedule a time to visit the victim’s home when he knew the relative would not be there, the indictment states.

Also charged in the indictment is Cynthia Wallace, 47, Chicago, Illinois. Wallace solicited homeowners to have home repairs performed by Diamond, knowing that Diamond would not actually perform the work, the indictment states. Wallace, who used the aliases “Shree Box,” “Regina Johnson,” and “Sherry Rice,” also posed as a representative of the U.S. Department of Housing and Urban Development to fraudulently obtain money from victims, the indictment states.

Wallace has pleaded not guilty to nine counts of wire fraud and two counts of falsely pretending to be an employee of the United States.

The indictment was announced by Joel R. Levin, Acting 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 Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

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

In Mortgage Fraud Illinois, Reverse Mortgage

False Statements in Reverse Mortgage Result in Indictment

Rachel Dollar — April 4, 2017 — Leave a comment

Tommy Rudy Habibe-Arias was charged in a one count indictment returned by a federal grand jury in the District of Puerto Rico, with making false statements in an application for a Home Equity Conversion Mortgage loan (commonly known as a “Reverse Mortgage”).

According to the indictment, from on or about September 2009 until on or about November 2009, defendant Tommy Rudy Habibe-Arias knowingly made or caused to be made material false statements to a mortgage lending institution named Master Mortgage Corporation, for the purpose of influencing the Federal Housing Administration (FHA) to insure a Reverse Mortgage loan. Specifically, the false and fraudulent information indicated that said property was the defendant’s principal residence, when at no time since September of 2009, or at any other time, the defendant occupied the property as his “primary residence.” The defendant procured $203,605.55 from a Home Equity Conversion Mortgage loan, which he received illegally.

If convicted, the defendant faces a possible penalty of 30 years in prison and/or a fine of $1,000,000.

“Mortgage fraud is a serious issue that affects not just financial institutions but ordinary citizens who may have invested in such financial institutions or who hope to purchase, sell or refinance a home by honestly setting forth their finances,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico, in announcing the indictment. “Mortgage lenders provide capital so people can purchase homes, not enrich themselves illegally.”

The U.S. Department Housing & Urban Development- Office of Inspector General (HUD-OIG) is conducting the investigation.

“The FHA reverse mortgage program enables elderly people to withdraw some of their home’s equity to give them greater financial security and allow them to afford to stay in their home,” said Nadine Gurley, HUD-OIG’s Special Agent-in-Charge for the Atlanta Region. “However, the public needs to be aware that to be eligible for these reverse loans, homeowners must be at least 62 years of age or older; own the property outright or have paid down a considerable amount; and must occupy the property as a principal residence. Our agency encourages anyone with information about waste, fraud or abuse against this program to confidentially report it by calling our San Juan Field Office at (787) 766-5868 or via e-mail at HOTLINE@HUDOIG.GOV (link sends e-mail) ”

The case is being prosecuted by Assistant United States Attorney Scott H. Anderson.

In Mortgage Fraud Puerto Rico, Reverse Mortgage

Reverse Mortgage Case Filed In Massachusetts

Rachel Dollar — August 20, 2015 — Leave a comment

A Norwell, Massachusetts based mortgage broker, one of its loan originators, and an outside insurance agent have been sued by the Massachusetts Attorney General for sales tactics that convinced elderly homeowners to apply for reverse mortgages and invest their proceeds in risky financial products, including variable annuities

In Mortgage Fraud civil lawsuit, loan originator, Massachusetts, Reverse Mortgage

Judge Grants Injunction in Reverse Mortgage Scam

Rachel Dollar — June 23, 2015 — Leave a comment

According to the Huffington Post, Chicago Cook County Judge David Atkins granted Attorney General Lisa Madigan’s request for an injunction against Mark Diamond in connection with the lawsuit she filed against him in 2009.

In the 2009 suit Diamond was accused of bilking elderly black homeowners out of more than $1.3 million through a reverse mortgage/home repair scam.

According to Madigan:

“For too many years, Mark Diamond defrauded the most vulnerable people in our society,” Madigan said in a statement. “He stole the financial security that these families struggled to build over a lifetime. It is deplorable that he got away with his scheme for so many years. The preliminary injunction provides a small victory for those who have already lost so much but will at least prevent additional people from losing their homes and savings to one of Diamond’s reverse mortgage scams.”

In Mortgage Fraud Illinois, Reverse Mortgage

2 Charged with Targeting Seniors in Reverse Mortgage Scam

Allison Tussey — January 17, 2014 — Leave a comment

Edmund Chatham, Roswell, Georgia, and Steven Connelly, Alpharetta, Georgia, have been indicted by a Fulton County Grand Jury and charged with one count of Racketeering (O.C.G.A. §16-14-4(a)) for their role in a scheme using senior citizens to fraudulently obtain payouts from mortgage lenders for reverse mortgages.

In Mortgage Fraud Georgia, Reverse Mortgage

Woman Jailed for Reverse Mortgage Scheme

Allison Tussey — August 23, 2013 — 3 Comments

Yesenia Pouparina, aka Yesenia Campos, 42, Miami, Florida, a title agent and former mortgage broker, was sentenced for her role in a reverse mortgage loan fraud scheme.

In Mortgage Fraud Florida, Reverse Mortgage

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