U.S. Attorney for the Middle District of Florida Robert O’Neill announced that Joseph Daniele pleaded guilty to conspiracy to commit wire fraud affecting a financial institution.
Daniele, a real estate developer, faces a maximum penalty of 30 years in federal prison for his scam.
According to his plea agreement, Daniele bought numerous houses directly and through a series of companies in Pinellas County, Fla., with the intent to “flip” them. In total, the conspiracy involved approximately 400 mortgage transactions.
To operate the scam, Daniele had three co-conspirators who were also real estate professionals: Misty Rudd, a Realtor; Michael Jordan, a mortgage broker; and Adam Ort, the owner of a title company. All three are still awaiting sentencing.
Rudd helped Daniele flip the properties by soliciting investors to buy the homes. As a part of the scheme, Rudd and others claimed that these investments would require no money from investors to purchase the properties.
But in reality, to obtain these loans, the lenders required the borrowers to contribute money toward the transaction. Therefore, the scammers submitted applications to lenders that said the borrowers were paying the downpayments and funds-to-close.
In fact, the conspirators concealed the actual source of the money from the banks. For example, in some cases, the borrower’s contribution was taken out from the money the seller (Daniele or his companies) was supposed to receive.
Meanwhile, this type of action required the direct involvement of a title agent to close the loans. Frequently, the borrower’s contribution came from a company called Premier Financial—run by Ort and Jordan. The company would fund the borrower’s contribution and then, on the seller’s side of the transaction, the money would be paid back to Premiere Financial, along with a small fee.
Because of this, lenders were not aware that the borrower had not made a financial contribution to the deal.
Additionally, mortgage brokers including Jordan, facilitated the scheme by adding false information to the mortgage loan application, such as making it appear that the borrowers had the financial capacity to make the downpayment and qualify for loans in which they could not really afford.