Four Indicted in $10M NY Subprime Scheme

Four New Yorkers have been indicted for allegedly orchestrating a fraud scheme involving more than $10 million in subprime mortgage loans. Sharmon Howell of Queens, N.Y., was arrested and pleaded not guilty in Manhattan federal court. June Persaud of Brooklyn, N.Y., surrendered to authorities and also pleaded not guilty. David Moore of Brooklyn and Oscar Ancrum of New York, N.Y., remain at large. According to the indictment, from 2006 through 2007, Mr. Howell allegedly led a scheme to obtain dozens of home mortgage loans by submitting applications and supporting documentation containing false and misleading information to various banks and lenders, ultimately obtaining more than $10 million in subprime mortgages. To further the scheme, the defendants allegedly recruited straw buyers from, among other places, a halfway house in New York City that served ex-convicts and a public housing complex in Brooklyn, to purchase properties in and around New York City. The defendants allegedly obtained mortgages on behalf of the straw buyers for amounts greater than the actual sale price of the homes. To do so, the defendants allegedly obtained fraudulent appraisals for the homes and misrepresented various material facts about the straw buyers' income, assets, debts and intent to live in the properties. After obtaining these mortgages, the defendants allegedly distributed the difference between the price of the house and the inflated value of the mortgage among themselves. Currently the vast majority of the mortgages obtained by the defendants are in default and/or foreclosure.