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Tenth Person Pleads Guilty in New Jersey Mortgage Fraud Scheme

MAR 21, 2014 11:34am ET
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New Jersey Case Sees 10th Defendant Plead Guilty to Mortgage Fraud

Facts

On March 14, Robert Serao pleaded guilty and admitted his role in a $41 million mortgage fraud conspiracy in which he used his position as a loan officer for Wells Fargo Home Mortgage to get the company to release more than $4.6 million based on fraudulent mortgage loan applications.

He pleaded guilty in federal court to count one of an indictment charging him with conspiracy to commit wire fraud. He is the 10th defendant to plead guilty in the case.

While working in various positions, including branch manager, sales manager and loan officer at Wells Fargo Home Mortgage, Serao entered into a conspiracy with Stephen Corba, Charles Harvath, Joseph Witkowski and other to submit mortgage loans to his employer for financially unqualified straw buyers based upon false and fraudulent information contained in the applications, HUD-1 forms, tax returns and other documents.

Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closing on the properties, Serao's conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds.

Harvath and Corba are among the nine others who previously pled guilty to charges associated with this scheme.

Serao faces a maximum potential penalty of 30 years in prison and a $1 million fine. (usattynj31414)

Moral

Ripping off the lender you work for when that lender is a subsidiary of a national bank can get you a great deal of prison time.

Pair Convicted of Rigging Bids at Foreclosure Sales

Facts

After a four-week trial, on March 11, in Sacramento, Andrew Katakis and Donald Parker were found guilty of rigging bids at foreclosure auctions held in San Joaquin County between September 2008 and October 2009. Katakis was also convicted of obstruction of justice charges related to deleting electronic records related to the crime in an effort to throw off federal investigators.

There were 11 others who were convicted earlier in plea bargain deals.

Some of them testified against the men, saying they cheated at auctions of repossessed homes in San Joaquin County during the mortgage meltdown in 2008 and 2009, defrauding lenders and freezing out honest buyers while splitting proceeds among members of their group.

Katakis helped finance most of the 254 homes scrutinized by the FBI and other agencies. He said he was not directly involved and had been duped by a middle man, and his attorney said authorities ignored evidence pointing to Katakis' innocence. When Katakis learned from Oak Valley Community Bank that authorities wanted his records, he bought scrubbing software and erased computer files and emails, prosecutors said.

Katakis was the owner of California Equity Management Group Inc. and managing partner of Lenders Financial Group LLC, real estate investing companies based in Modesto. Parker owned and worked for several real estate investing companies based in and around Sacramento and Stockton.

Evidence showed that after the conspirators' designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group's illicit profit, and it was divided among the conspirators in payoffs.

Jurors began deliberating at noon March 5 and continued huddling for the rough equivalent of four days before handing up the verdicts, which may result in federal prison terms. The jury could not reach a unanimous decision on whether the men had committed mail fraud as part of the scheme.

Katakis and Parker were convicted of bid rigging in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals, according to the Department of Justice. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. The obstruction of justice conviction carries a maximum sentence of 20 years in prison and a $250,000 fine. (usattedsac21114)

Moral

Anyone in here you know?  Anyone in here you wish you did not know?

Former Fannie Mae Employee Guilty of Taking Kickbacks to Funnel Foreclosures

Facts

On March 14, Armando Granillo, a former sales representative of Fannie Mae admitted in a Santa Ana (Calif.) Federal Court that he demanded kickbacks from an Arizona Broker in exchange for sending him foreclosure listings. During the admission by Granillo he told jurors he needed the money to pay for his autistic daughter’s therapy because it was very expensive. He faces up to 20 years in federal prison.

Granillo oversaw the assignment of Fannie Mae owned foreclosures to listing agents around the Western United States. He was arrested in a “sting” in the parking lot of a Los Angeles Starbucks when he was handed an envelope with $11,200 in cash which have been videotaped with sound. (ocreg31514busp3,lat315bp1)

Moral

Presuming he told the truth about his daughter, it was understandable but not legal.

Two Get Seven Years in Prison for Mortgage Assistance Scam

Facts

On Feb. 20, Christopher Godfrey and Dennis Fischer were sentenced today to serve 84 months in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.

The defendants were convicted after a two-week trial of one count of conspiracy, eight counts of wire fraud, eight counts of mail fraud and one count of misusing a government seal.

They were reported as having stole millions of dollars from homeowners who sought help to refinance their mortgages and save their homes from foreclosure.

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