Archives For Texas

Edmundo De La Torre, 38, Texas was sentenced for his role in a complex mortgage fraud scheme.

From 2018 to 2020, De La Torre admitted he was working as a salesman for a Laredo area homebuilder. De La Torre used his position to attempt to get potential customers approved for Department of Housing and Urban Development (HUD)-backed mortgages. He forged various documents, including financial statements, bank statements, paycheck stubs and letters of reference for at least 38 otherwise unqualified homebuyers.

De La Torre then submitted these fake and forged documents to a Laredo area bank on behalf of the potential homebuyers. He admitted he was receiving a commission for each sale and personally profiting over $200,000 from the scheme. In addition, more than three dozen known loans in this scheme ultimately defaulted or had to be restructured, costing HUD roughly $971,310.10 at the time of his plea in April.

De La Torre pleaded guilty April 19 to orchestrating a mortgage fraud scheme in which he altered hundreds of documents to get otherwise unqualified buyers’ approval for government-backed mortgages.

U.S. District Judge Marina Marmalejo has now ordered De La Torre to serve 36 months in federal prison to be immediately followed by three years of supervised release. De La Torre was also ordered to pay restitution in the amount of $1.17 million. In handing down the sentence, Judge Marmolejo noted the sophistication and persistence of De La Torre’s crime and remarked on the profound effects it has on potential first-time and low-income homebuyers seeking homes, and instead ending up entangled in legal and finances issues.

De La Torre was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

U.S. Attorney Alamdar S. Hamdani made the announcement.

HUD – Office of Inspector General conducted the investigation with assistance from the FBI. Assistant U.S. Attorney Thomas Carter prosecuted the case.

Heather Ann Campos, 43, Houston, Texas, David Lewis Best Jr., 56, Spring, Texas and Stephen Laverne Crabtree, 62, Herriman, Utah, have been taken into custody on charges related to a multi-layered mortgage fraud, credit repair and government loan fraud scheme. The tri had evaded law enforcement for several months.

All three allegedly sent numerous sovereign citizen letters to federal agencies and the federal court in Houston declaring themselves immune from prosecution and refusing to recognize the authority of the federal courts.

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

Campos was a mortgage broker and Buckley a realtor, while operating as a notary was the responsibility of Munoz, according to the charges. After fraudulently inflating client credit worthiness, the individuals allegedly obtained rental properties to deceptively build a real estate portfolio worth millions of dollars in their clients’ names and profit from rental income. The charges allege Crabtree was a credit repair client and recruited others, including his family members, and conspired to commit wire fraud.

In addition, they allegedly obtained loans from banks and the SBA’s Economic Injury Disaster Loan Program and Paycheck Protection Program. They were created in the names of clients, friends and family members through false statements and fake or altered documents.

Using the alias Jeff, Morizono was the leader and namesake for the scheme purporting to do business as Jeff Funding, according to the charges.

Campos and Best were indicted in January on numerous charges for participating in a conspiracy to defraud mortgage lending businesses, banks, Small Business Administration (SBA) and the Federal Trade Commission (FTC). They indicated they would self-surrender but allegedly fled from law enforcement. Since that date, several other co-conspirators were indicted, including Crabtree. He was released on bond and also became a fugitive.

Others indicted include Steven Tetsuya Morizono, 59, Mission Viejo, California; Albert Lugene Lim, 53, Laguna Niguel, California; Melinda Moreno Munoz, 41, Elvina Buckley, 68, Leslie Edrington, 65, and ShyAnne Edrington, 29, all of Houston, Texas.

Campos is set for a detention hearing before U.S. Judge Dena H. Palermo today at 10 a.m. Best and  Crabtree remain in custody pending further criminal proceedings.

U.S. Attorney Jennifer B Lowery made the announcement.

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

The Federal Housing Finance Agency – Office of Inspector General (OIG), U.S. Postal Inspection Service and SBA – OIG conducted the investigation with the assistance of the FTC – OIG and IRS – Criminal Investigation.

Other agencies assisted with the arrests of Campos, Best and Crabtree, to include The Unified Police Department of Greater Salt Lake; police departments in South Jordan, Riverton, and Herriman, Utah; FBI Hostage Rescue Team; U.S. Postal Inspection Service – Pittsburgh and Salt Lake City Divisions; and the U.S. Marshals Violent Fugitive Apprehension Strike Force.

Assistant U.S. Attorneys Kate Suh and Jay Hileman are prosecuting the case.

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

 

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

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

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

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

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

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

 

Jason Alain Wu and Michael Andrew Kergosien were indicted in the Northern District of Texas, Dallas Division, on August 28, 2019 and charged with one count of conspiracy to defraud HUD and five counts of mail fraud, aiding and abetting.

According to the indictment:

Wu was the owner of American Home Free Mortgage, LLC (“AHFM”), a company that assisted homebuyers with obtaining financing, including interim financing, to construct and purchase a manufactured home.  Kergosien was employed by AHFM as a loan officer, director of sales, and director of operations.  MK Financial Services, LLC (“MK Financial”) and 1X Funding, LLC (“1X Funding”) were shell “third party companies” set up at the direction of Wu or Kergosien to receive fraudulent construction management fees as a means to recoup AHFM’s costs associated with interim financing without disclosing the true nature of the fees to the borrowers or HUD or obtaining the borrower’s agreement to pay the fees. Under HUD’s Construction to Permanent Loan Program, lenders who provide interim financing during the construction of a home are prohibited from charging a borrower additional fees unless the borrower signs a separate agreement specifically agreeing to pay the fees.

In or about November 2010 through at least September 2016, Wu and Kergosien caused AHFM employees to submit false invoices to title companies, on behalf of MK Financial and 1X Funding, that fraudulently charged a “construction management fee” and that concealed that the true purpose of the fee was to pay for undisclosed AHFM costs, including warehouse line fees on construction loans.  The MK Financial invoices stated “[m]ake all checks payable to MK Construction” which falsely represented the funds would be used for construction related costs. They also caused false entries on the HUD-1’s making it appear that the housing manufacturer was paying the construction management fee outside of the closing when the fee was actually included in the borrower’s purchase price and ultimately rolled into the loan. These invoices and false statements were concealed from HUD and the borrowers.

Between July 6, 2011 and September 10, 2014, Kergosien and Wu caused title companies to issue checks to MK Financial/MK Construction resulting in fraudulent payments of approximately $1,117,581 on approximately 126 FHA insured loans for over $12M; and, between July 15, 2014 and September 10, 2015, to issue checks to 1X Funding, LLC resulting in fraudulent payments of approximately $1,062,416 on approximately 99 FHA insured loans for at least $3.8M.

On August 10, 2015, Housing Wire reported that HUD’s Mortgage Review Board had settled allegations that American Home Free Mortgage had artificially increased mortgage costs by an average of $12,000 per loan through illegitimate fees paid to a company owned and operated by its sales manager.  In that settlement, AHFM did not admit fault or liability but agreed to pay a civil money penalty of $169,419 along with the permanent withdrawal of its FHA approval.

Yelp’s page for American Home Free Mortgage reflects that the company is closed. It received only one review – 5 stars.

Clarence C. Roland III, 58, Tacoma, Washington, is accused of fraudulent acquisition of real property through the manipulation and filing of fraudulent deed documents in county records across the country.

The indictment, returned in December 2018, alleges Roland fabricated fraudulent documents to defraud mortgage holders by causing the property records to reflect their interests in the real property had been eliminated.

Roland and others fraudulently transferred the ownership of the real property in which the mortgage holder had an interest to shell companies Roland controlled, according to the charges. The fraudulent documents allegedly further materially misrepresented the shell companies he controlled had outstanding mortgage loans on the real properties allegedly held by another company Roland controlled. Upon the sale of the real property, Roland allegedly caused that fake loan to be paid off using seller’s proceeds.

The indictment further alleges the conspirators created and used various entities names in executing their scheme to defraud.

Roland is set to make his initial appearance before U.S. Magistrate Judge Christina Bryan at 10:00 a.m. today.

If convicted of conspiracy to commit bank fraud, Roland faces up to 30 years in federal prison and a possible $1 million maximum fine. A conviction for wire fraud carries a potential 20-year-maximum sentence and a $250,000 possible fine. He is also charged with six counts of money laundering, each carrying a maximum 10 years in prison and $250,000 in fines, upon conviction.

The announcement was made by U.S. Attorney Ryan K. Patrick.

The Federal Housing Finance Agency – Office of Inspector General and the FBI conducted the investigation. Assistant U.S. Attorney Melissa Annis is prosecuting the case.

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

Kirk Lawrence Brannan, 65, Lake Jackson, Texas pleaded guilty today for his role in a mortgage fraud scheme, admitting he conspired with others from 2005 to 2009 to execute a scheme to defraud Wells Fargo Bank and other lenders.

At the hearing, the court held that, in committing the crime, Brannan had used sophisticated means and had employed his special skills as an attorney and real estate agent. The court noted that Brannan had created false HUD-1 settlement forms and title documents that purported to show the sale of three of his properties to his children at grossly inflated prices. These HUD-1 forms then became the three comparable sales that appraisers relied upon in over-valuing the rest of Brannan’s beach home properties which Brannan then sold through the fraud scheme at inflated prices.

Brannan sold 10 beach homes in the Freeport/Surfside, Texas area to “straw buyers” at exorbitant prices. Other co-conspirators recruited straw buyers who created loan applications with misrepresentations that lenders relied upon in deciding to make the mortgage loans. The applications contained misrepresentations of the buyer’s address, employer, income and expenses. The applications also suggested the buyers were much better credit risks than they actually were. Brannan admitted he paid kickbacks to co-conspirators each time one of the beach homes was sold to a straw buyer.

The beach properties were sold at two to three times the appraised values. The mortgage lenders, including Wells Fargo Bank, were induced to lend the inflated amounts for the purchases through flawed or fraudulent appraisals which were based on comparisons Brannan manufactured to further the scheme.

Brannan created settlement statements that suggested he sold three of his properties to his children at exorbitant prices. Appraisers relied upon these “sales” as comparable sales in appraising Brannan’s remaining properties sold to straw buyers. As a result of the fraudulent appraisals, he and his co-conspirators were able to inflate the values for his properties and deceive the lenders into approving home loans at those exorbitant amounts.

All of the straw buyers defaulted on the mortgages, and all 10 of the beach properties ended up in foreclosure.

The fraudulent mortgage loan scheme resulted in a loss of $5,317,350 to Wells Fargo Bank and the other lenders. Brannan paid $2,401,368 to his co-conspirators as part of the scheme.

Previously released on bond, Brannan was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

Co-conspirators Chucoboie Lanier, 42, David Lee Morris, 56, and Derwin Jerome Blackshear, 52, all of Houston, Texas previously pleaded guilty for their roles in the scheme. Lanier received a sentenced of 36 months while Morris was ordered to serve a 42-month prison term. Blackshear is set for sentencing April 9, 2019.

Chief U.S. District Judge Lee Rosenthal handed Brannan a 36-month sentence to be immediately followed by three years of supervised release.

In imposing the sentence, Judge Rosenthal balanced Brannan’s honorable military service and other aspects of what, up to the time of the fraud, had been an exemplary life, with the tremendous damage mortgage fraud had done to the U.S. financial system and economy and the fact that Brannan had been a knowing and willing participant in such a scheme. She also pointed out that some individuals much less sophisticated than Brannan had suffered severe economic harm as a result of Brannan’s scheme.

Brannan was further ordered to pay $5,317,350 in restitution. A money judgement was previously entered in the amount of $2,401,368.

The announcement was made by U.S. Attorney Ryan K. Patrick.

The Texas Department of Public Safety and the FBI conducted the investigation. Assistant U.S. Attorneys Robert Johnson and Michael Day are prosecuting the case.

 

James Gerard Temme, 50, Plano, Texas has been sentenced today to federal prison for wire fraud.

According to information presented in court, in 2011, Temme engaged in wire fraud by inducing individuals to invest in a package of mortgages, misrepresenting that he had the ability to sell the package to the investors.  Temme provided a forged signature to induce the investment, eventually receiving over $3 million from the investors, when in fact he never actually sold the package of mortgages to the investors.  Temme was indicted by a federal grand jury on Sep. 21, 2016 and charged with federal violations.

Temme pleaded guilty on Oct. 11, 2017, to wire fraud and was sentenced to 78 months in federal prison on Oct. 16, 2018 by U.S. District Judge Marcia A. Crone.  Temme was also ordered to pay restitution in the amount of $2,933,667.48.

U.S. Attorney Joseph D. Brown made the announcement.

“White collar theft often hurts victims just as much as thefts that happen with a gun,” said U.S. Attorney Joseph D. Brown. “This was a lot of money.  I am proud of the FBI investigators for pursuing it aggressively, and a prison sentence was wholly justified in this case.”

Mr. Temme, knowingly acted in an unscrupulous and reckless manner to entice many innocent people into making investments that were unsound,” said Eric K. Jackson, FBI Special Agent in Charge of the Dallas Division. “Economic fraud is becoming common place, but we will continue to target the offenders and bring the appropriate charges, while protecting the citizens’ rights to fair and trustworthy services.”

This case was investigated by the Federal Bureau of Investigation and prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas.

 

Mark Demetri Stein, 38, Carrollton, Texas, the owner of Real Estate Solutions, and the final defendant in a high-profile north Texas “foreclosure rescue” case has been sentenced for his role in the scheme, which swindled nearly a quarter of a million dollars from at least 70 homeowners facing foreclosure.

According to documents filed in the case, from February 2012 to January 2013, Stein and three co-conspirators used third parties to contact vulnerable homeowners, offering them an opportunity to get out of their present home loans and receive new, cheaper loans with lower interest and reduced monthly payments. http://www.mortgagefraudblog.com/?s=Mark+Demetri+Stein

They lied to desperate homeowners, telling them “investors” were standing by, ready to purchase homeowners’ loans from their original lenders at a greatly reduced price through a “short sale” process, and suggesting homeowners had the legal authority to transfer their deeds to a foreclosure rescue company. Then, although they knew they would not legally own the property, Stein and his co-defendants assured homeowners a foreclosure rescue company could “sell” the property back to the homeowner with a new loan.

There were no investors.  The defendants simply pocketed funds collected from these defrauded homeowners.

They issued fraudulent new “loans” requiring hefty down payments, demanded the homeowners sign fraudulent documents, and directed homeowners to start making all future loan payments to them.

As they continued to collect these so-called “mortgage payments,” they instructed homeowners to ignore notices of late- and non-payment from other lenders. In order to further conceal their criminal conduct, they even advised several homeowners file bankruptcy in order to forestall foreclosure.

Stein who pleaded guilty in April to one count of mail fraud  was sentenced to six years in prison and ordered to pay $215,138 in restitution to homeowner victims.

The three other defendants, Christina Renee Caveny, 37, Richard Bruce Stevens, 53, and Bruce Kevin Hawkins, 54, also pleaded guilty and were sentenced for felony offenses stemming from the scheme. (Caveny was sentenced to 15 months in prison in November 2017. The following month, Hawkins was sentenced to 41 months.  Late last month, Stevens was sentenced to 41 months.)

The announcement was made by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

The case was brought as part of the Northern District of Texas’ Bankruptcy Fraud Initiative. Since May 2013, the initiative has prompted a significant increase in the number of felony prosecutions of bankruptcy-related crimes in north Texas. A total of 27 defendants each prosecuted due to criminal referrals from the United States Trustee’s Office  have been charged and convicted.

The Federal Bureau of Investigation’s Dallas Division conducted the investigation, and Assistant U.S. Attorney David Jarvis prosecuted the case.

Francisco Javier Gonzalez, a/k/aJavier Gonzalez,” 46, Duncanville, Texas, was sentenced yesterday to 60 months in federal prison and ordered to pay $611,740.55 in restitution for his role in a scheme to defraud numerous homeowners, banks and the Department of Housing and Urban Development, (HUD).

Gonzalez pleaded guilty in September 2017 to one count of mail fraud, stemming from his work at the Dallas County Community Action Committee, Inc. (DCCAC), a non-profit entity accredited by HUD to provide housing counseling.  Gonzalez has been in custody since his arrest in October 2016. http://www.mortgagefraudblog.com/?s=Francisco+Javier+Gonzalez

According to the plea agreement factual resume filed in the case, Gonzalez served as a Vice President and Director for DCCAC, and leased space in the DCCAC offices for another entity, known as Residential Counseling FJ LLC.

While working in the DCCAC building, Gonzalez falsely claimed he was certified by HUD to provide foreclosure counseling assistance.  Gonzalez sought out victims looking for mortgage loan and foreclosure prevention assistance and would then meet these victims in the DCCAC offices or in their homes.

Additionally, as stated in the plea agreement factual resume, Gonzalez prepared and submitted incomplete and false mortgage assistance applications for the victims.  Gonzales instructed the victims to not communicate with the banks, as this would prevent him from effectively obtaining the loan modification.  Additionally, Gonzalez required lump sum payments for his supposed assistance; and instructed the victims to make mortgage payments directly to him indicating he would forward these payments to the bank.

Gonzalez did not submit the monies he was paid by the victims to the banks, but instead used the money for his own personal expenses.

The announcement was made by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

 

Arlando Jacobs, 52, The Woodlands, Texas, has pleaded guilty today to conspiracy to commit wire fraud.

According to information presented in court, from October 2011 through April 2017, Jacobs conspired with others to create and submit fraudulent mortgage lien documents to title companies and financial institutions in order to receive transfers of funds they were not entitled to receive. Jacobs was indicted by a federal grand jury in October 2017.  Co-defendant, Clarence Roland, is scheduled for trial in September 2018.

Under federal statutes, Jacobs faces up to 30 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

U.S. Attorney Joseph D. Brown made the announcement.

Arlando Jacobs pleaded guilty before U.S. Magistrate Judge Kimberly Priest Johnson.

This case is being investigated by the Federal Housing Finance Agency-Office of  Inspector General, Federal Bureau of Investigation, and Housing & Urban Development-Office of Inspector General.  This case is being prosecuted by Assistant U.S. Attorney Christopher Eason.