FACTS
On Jan. 29, Diane M. Hathaway, a former Michigan Supreme Court justice, pleaded guilty to committing bank fraud in connection with a property owned in Grosse Pointe Park, Mich.
During the hearing before U.S. District Judge John Corbett O’Meara, Hathaway admitted that between 2010 and 2011, she knowingly engaged in a scheme to defraud ING Direct Bank by concealing assets from the bank to qualify for a short sale.
Based on her guilty plea and felony conviction for committing bank fraud, Hathaway is facing a maximum of 30 years in prison, a fine of up to $1,000,000, and up to five years of supervised release. (usattyedmi12913)
MORAL
A Supreme Court Justice! Remember, this is why before you go into a real estate transaction an attorney is a good idea and a lot cheaper than representing you in a lawsuit later.
CHICAGO LAWYER THAT HOSTS NATIONAL RADIO TALK SHOW INDICTED FOR $9.7M MORTGAGE FRAUD
FACTS
On Jan. 28, Warren Ballentine, a lawyer who hosts a national radio talk show was indicted on federal charges for allegedly engaging in two mortgage fraud schemes that defrauded lenders of a total of approximately $9.7 million. Ballentine allegedly schemed with others to obtain more than two dozen fraudulent mortgage loans and represented buyers at multiple closings, knowing that they were fraudulently qualified for loans to purchase homes in Chicago and various southern suburbs.
He was charged with two counts of bank fraud, two counts of making false statements to lenders, and one count each of mail fraud and wire fraud in a six-count indictment. The indictment also seeks forfeiture of approximately $9,775,000 in alleged fraud proceeds.
According to the indictment, between December 2004 and February 2005, Ballentine schemed with others to fraudulently cause various lenders to make at least eight loans totaling approximately $3.6 million by making false statements in loan documents, including applications, HUD-1 settlement statements, and occupancy statements concerning the buyers’ intention to occupy the homes they purchased as a primary residence. Ballentine then represented buyers recruited by others at real estate closings, knowing that they had signed and submitted false documents and had been fraudulently qualified to purchase the properties.
Between February 2005 and May 2006, Ballentine allegedly engaged in a similar, separate scheme with others to fraudulently cause various lenders to make at least 20 loans totaling approximately $6.1 million by making false statements in mortgage documents, including the buyers’ intention to occupy the homes as a primary residence. Ballentine also represented these buyers at closings, knowing that they had been fraudulently qualified for the loans based on false documents, including some that Ballentine advised them to sign at closings.
Each count of the indictment carries a maximum penalty of 30 years in prison and a $1 million fine or, as an alternative, the court may impose a fine of twice the gross gain or twice the loss, whichever is greater, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. (usattynoil12813)
MORAL
Notice how they are just now indicting him for acts that occurred eight and nine years ago. That is why we inform our clients that once an investigation starts and they are approached, they should immediately have legal counsel and that the matter can take up to 10 years to resolve because the statute of limitations that the federal prosecutors have allows them 10 years from the final act to indict the person or persons of interest.
CALIFORNIA MAN BUSTED FOR MORTGAGE FRAUD
FACTS
On Jan. 30, FBI agents arrested Jude Raymond Lopez in connection with a scheme which allegedly defrauded as many as 400 people who paid into a mortgage debt elimination scheme, officials said. He was arrested on four counts of mail fraud, two counts of bankruptcy fraud, and two other counts of fraud related to illegally filing court petitions, according to court records.
A woman, identified as Marcela Gonzalez, was also indicted by authorities in connection with the mortgage debt elimination scheme. She is suspected of six counts of mail fraud.
Investigators believe approximately 400 clients were defrauded of approximately $5 million over approximately two years, "(The) defendants allegedly pitched a `sovereign citizen' argument to homeowners, suggesting that the original liens were invalid."
Court documents indicate the FBI, the Montebello Police Department and the Los Angeles Police Department were involved in the investigation.
The U.S. Attorney's Office asked that Lopez be held as a flight risk, according to court documents.
Prosecutors allege that Lopez, working on behalf of a company identified as Crown Point, filed bankruptcy paperwork for Crown Point clients. The paperwork was intended to delay foreclosure proceedings, officials said.
"From at least in or about September 2010, through in or about May 2012, defendant Lopez who was not a lawyer prepared and filed, and caused to be prepared and filed, legal papers including...bankruptcy petitions on behalf of clients in order to delay foreclosure and eviction actions."
The complaint alleges that in some cases Lopez filed paperwork without the client's knowledge. Some of the petitions contained forged signatures, according to court documents. (whitdlynw13013)
MORAL
I trust they can afford competent counsel.
COLORADO ATTORNEY DRAWS 6 YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
Steven J. Mascarenas was sentenced to serve 72 months in a federal prison after being pleading guilty to wire fraud, making a false statement to a pretrial services officer and escape. Mascarenas was ordered to spend three years on supervised release after he serves his term of imprisonment. Judge Blackburn also ordered Mascarenas to pay restitution totaling $1,776,152.21.
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