FEB 7, 2013

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Compliance Matters

Ex-Judge Convicted of Mortgage Fraud

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In 2004, Steven Mascarenas, an attorney and licensed real estate broker, orchestrated the purchase and resale of residential properties in The Broadlands, a subdivision in Broomfield, Colo. He arranged to have individuals serve as “credit buyers” to obtain loans, purchase the properties, and resell them shortly thereafter at inflated prices to other “credit buyers” in his select group. He concealed from the lenders that these “credit buyers” were only acting at his direction and were being compensated after the closings for their participation in having obtained the loans and purchased the properties.

Mascarenas had Roberts prepare appraisal reports in which she fraudulently inflated the fair market values of the properties by $100,000 to $325,000. To make the inflated values in all her reports appear legitimate, she falsely represented that the purchases, which were actually sales at market value, were “distressed” sales, or “quick” sales below market value.

Based on the fraudulent appraisals, Steven Mascarenas set the prices for the resales far beyond their true market values and arranged for the buyers to obtain 100% financing for them.  To ensure that the desired funding would be approved for the buyers for both the purchases and the resales, Steven Mascarenas caused false information about their qualifications to be incorporated into their loan applications to enable them to qualify for the loans.

He caused the proceeds from the second sales to be directed to entities of his choice.

Kathy Mascarenas conducted financial transactions as necessary to facilitate, perpetuate, and conceal the fraud.

All of the loans went into default, and the loss to the lenders was approximately $1,776,162.21.

While out on bond in the fall of 2011, Mascarenas repeatedly lied to his supervising pretrial services officer, telling him that he was employed making sandwiches at a local Quizno’s restaurant. In fact, he was managing the store under the assumed name of “Steven Jay,” in violation of the conditions of his bond.

In June 2011, as a condition of Steven’s bond, he was required to reside in a halfway house, and he was not permitted to leave the facility without permission. Hours before he was to be taken to a prison facility, he fled. An arrest warrant was issued, and on Dec. 4, 2011, Steven was arrested by the Lakewood Police Department at a motel in Lakewood, Colo. (usattyco2113)

MORAL

How stupid is stupid? He spends four years in college, three years in law school, takes a three day test to get a law license and now it is all shot for life.

FOUR INDICTED IN NEW JERSEY FOR MORTGAGE FRAUD

FACTS

On Jan. 31, four individuals from New Jersey were taken into custody for their alleged roles in a $15 million mortgage fraud scheme on an indictment returned by a federal grand jury on January 30, 2013

The four defendants are: Fredric M. Diantonio, Louis V. Catarro, Kathryn W. Lockwood and Thomas E. Morello. All defendants were charged with conspiracy to commit wire fraud. Diantonio, Catarro, and Lockwood were also charged with conspiracy to commit money laundering. In addition, Diantonio and Catarro were charged with making false statements to the U.S. Department of Housing and Urban Development.

[AS WE HAVE ALWAYS TOLD YOU AND OUR CLIENTS, DO NOT LIE TO FEDERAL AGENTS. IT IS IN AND OF ITSELF A CRIME.  JUST TELL THEM YOU WOULD LIKE TO HAVE YOUR LAWYER PRESENT AND THEY WILL STOP QUESTIONING, GIVE YOU THEIR CARD ASKING YOU TO HAVE YOUR LAWYER CALL THEM.  IT IS BETTER TO PAY THE LAWYER THAN TO BE CHARGED WITH THIS OFFENSE SINCE YOU KNOW THE FEDERAL AGENT WOULD BE THE ONE TESTIFYING AGAINST YOU.] 

According to the indictment, real estate agents Diantonio, Catarro, and Lockwood located properties in Wildwood and North Wildwood, N.J., for sale by real estate developers such as Morello. Diantonio, Catarro, and Lockwood caused real estate sales contracts to be created, which listed deposit monies from buyers that often were not collected. The conspirators also agreed that sellers such as Morello would pay kickbacks to the buyers of the properties without disclosing the kickbacks to the lending institutions funding mortgages used by the buyers to purchase the properties. The conspirators caused fraudulent documents to be signed at real estate closings, including HUD Settlement Statements, which failed to disclose the kickbacks paid to the buyers or which falsely stated that a deposit toward the purchase of the property had been collected. Diantonio, Catarro, and Lockwood received real estate sales commissions for putting the transactions together.

The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. The false statements charge carries a maximum potential penalty of two years in prison and a $250,000 fine.  (usattynj13113)

MORAL

If a federal agent calls or comes to see you, call us.

PITTSBURGH JURY FINDS MORTGAGE BROKER GUILTY OF $100 MILLION FRAUD.

FACTS

On Jan. 29, Lewis Whoolery was found guilty of wire fraud conspiracy. He operated a mortgage broker business called First Capital Home Equity. In 2003, Whoolery recruited an unlicensed appraiser named Kenneth Cowden to prepare fraudulent appraisals for First Capital. Between 2003 and 2005, Cowden prepared more than $67 million in fraudulent appraisals for Whoolery and First Capital.

The appraisals were fraudulent not only because they falsely represented that a licensed appraiser prepared the appraisals but also because the appraisals overstated the values of the properties serving as collateral for the loans. In addition, Cowden altered the pictures of the properties being appraised to make it look like the properties were in better condition than they really were, and in some cases, he substituted pictures of completely different properties than the properties subject to the appraisals.

Comments (6)
How does anyone even pay restitution when most of these convicts will never be hired in any good paying jobs and most of them are beyond the age of 30. With life expectacny, have anyone ever paid full restitution? Can surviving family inherit resitutions? LOL
Posted by Restitution? | Friday, February 08 2013 at 3:16PM ET
Outrageous Behavior I would like to say something but at the moment I am perplexed and disgusted this trash is what gives our industry fits and an image that hard working Mtg.professionals do not deserve again Outrageous.

newsjet1

Posted by NewsJet Magazine | Friday, February 08 2013 at 8:16PM ET
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