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Fraudster Turned Informant Indicted

MAR 14, 2013 11:43pm ET
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OHIO EX-FBI INFORMANT PREVIOUSLY CONVICTED OF MORTGAGE FRAUD THEN USED TO FIND MORTGAGE FRAUDSTERS AGAIN INDICTED FOR MORTGAGE FRAUD

FACTS

On March 6, Paul Tomko, a onetime FBI informant, pleaded guilty to charges that he ran a mortgage fraud scheme similar to the scams that agents had paid him to help investigate in 2007 and 2008. Originally Tomko said in an interview after his indictment that he had "no idea" what federal prosecutors were alleging and planned to fight the charges. But he changed his mind and pleaded guilty to five charges, including wire fraud and conspiracy, student-aid fraud and concealment/aiding and abetting. Prosecutors agreed to dismiss four charges as part of the plea deal.

U.S. District Judge Christopher Boyko scheduled sentencing for June 10. Tomko could face a prison term of up to a year or more, depending on the amount of financial loss caused by his crimes.

In 2009, Tomko pleaded guilty to fraud in connection with a dozen mortgage loans totaling nearly $1.2 million. He confessed to using straw buyers to obtain fraudulent appraisals that artificially inflated the true values of homes. His plea deal required Tomko to provide probation officers with the names of companies in which he had a financial interest and prohibited him from operating any companies without the permission of his probation officer.

According to Tomko, he worked for three years as an FBI informant, collecting $27,000 in 2007 and 2008, to assist agents in other mortgage fraud investigations. He said he provided a Cleveland house for agents to set up a surveillance network to catch fraudulent appraisers.

But a probation officer contacted Tomko at his home in November 2009, and noticed that a company called The Mortgage House was operating out of the residence, according to the indictment. Tomko told the probation officer that the company was an undercover operation linked to his informant work and that the FBI was aware of its existence. But the FBI denied they were aware of the business.  Tomko also admitted running another company in which he recruited his housekeeper to apply for fraudulent mortgage loans totaling more than $428,000 for two properties in Cleveland, and other homes in Lakewood and Lorain. The applications falsely inflated her income and assets. The housekeeper was not charged.

After the transactions closed, Tomko fraudulently pocketed about $100,000 of the proceeds by filing liens for work not performed, the indictment said.  For a time after 2010, Tomko worked as an adjunct professor at Cuyahoga County Community College, teaching courses in accounting, business administration and marketing. He was scheduled to teach courses in business math, personal finance and organizational behavior last fall prior to his indictment.  (plaindlrneohio3613)

MORAL

That in Yiddish is known as chutzpah. First he commits fraud, then turns informant and while an informant goes back to committing mortgage fraud after having been an FBI informant.

CALIFORNIA WOMAN PLEADS NO CONTEST TO THREE FELONY COUNTS INVOLVING LOAN MODIFICATIONS

FACTS

On March 4, Maria Soto pleaded no contest to three felony counts of grand theft in connection with her activities at a now-defunct Sacramento loan modification firm. The plea resulted in a stipulated term of 16 months in jail and an agreement to pay $49,925 in victim restitution.

Prosecutors alleged that, between July and November 2010, Soto operated Sacramento Equity Solutions, which offered mortgage loan modification services, and that Soto demanded and accepted illegal advance fees.

Prosecutors charged that victims were lured in with promises of help in obtaining loan modifications from lenders, but modifications never came through and victims' money was spent for fraudulent purposes.

Sentencing has been set for March 21 in Department 62 of Sacramento Superior Court. (sacb3813)

MORAL

Believe it or not, there are still people out there doing loan modifications in violation of law. For your information, no one, not even attorneys can collect an advance fee for assisting you with loan modifications.  All services must be completed totally before any fee is paid. 

TWO NORTHERN CALIFORNIA MEN AGREE TO PLEAD GUILTY FOR RIGGING BIDS AT PUBLIC FORECLOSURE SALES

FACTS

On March 7, two Northern California real estate investors agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California.  Felony charges were filed in the U.S. District Court for the Northern District of California in Oakland against Peter McDonough and Michael Renquist.

Including these pleas, 29 individuals have pleaded guilt or agreed to plead guilty as a result of an ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, for various lengths of time between November 2008 and January 2011, McDonough and Renquist conspired with others not to bid against one another but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif.

The U.S. Department of Justice said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Renquist was also charged with additional counts for his involvement in similar conduct in Contra Costa County, Calif.

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

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