Ex-Fannie Mae employee sentenced for role in property-sales scheme

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A former Fannie Mae employee faces more than six years in federal prison for participating in a scam involving discount sales of real estate owned properties.

Shirene Hernandez, 47, of Corona, Calif., also was sentenced on Tuesday to pay $982,516 in restitution for participating in $120 million in fraudulent property sales and paying $3 million in corrupt commissions to real estate brokers, according to a Department of Justice press release.

"The crime that [Hernandez] committed was egregious," prosecutors wrote in a sentencing memorandum. "Rather than act in the public's best interests … she used her position to line her own pockets."

Hernandez was sentenced in U.S. District Court after being found guilty of two counts of wire fraud involving deprivation of honest services in connection with the scheme.

While working as a sales representative in Fannie Mae's Irvine, Calif., office, between 2010 and 2015, Hernandez used her job choosing what real estate brokers to assign to property listings to participate in the scam, trial evidence shows.

She violated federal law by demanding and receiving bribes from brokers in exchange for property listing assignments, as well as for approving sales prices below market rates, according to the DoJ.

Hernandez also used intermediaries and alter egos to buy at least one Fannie Mae-owned property in Sonoma, Calif., for herself at a discount, using a duffel bag full of $286,450 in cash. Additionally, she helped family members become Fannie Mae-approved brokers and steered listings to them.

The share of Fannie's real estate owned guarantee book of business declined considerably since 2010, according to the Federal Housing Finance Agency's most recent annual report to Congress. It was 0.08% in 2018, as compared to 0.53% in 2010.

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