FACTS
On April 8, FIRST AMERICAN MORTGAGE TRUST OF BROOKLINE, MASS., and the Federal Housing Administration's Mortgagee Review Board announced a settlement agreement for failing to fully verify whether borrowers could sustain their mortgage payments prior to refinancing their loans. (Sounds like the new Dodd Frank Act, doesn’t it?) Among the alleged violations, the MRB claimed First American Mortgage Trust refinanced mortgage loans for borrowers with serious credit delinquencies without properly analyzing the households' ability to manage credit.
FAMT AGREES TO PAY $72,500, REIMBURSE FHA FOR PAST INSURANCE CLAIMS, AND TO INDEMNIFY FHA'S INSURANCE FUND FOR ANY CLAIMS TO BE PAID ON FIVE MORTGAGES SHOULD THEY DEFAULT WITH THE NEXT 60 MONTHS.
(11-054. 4-8-11_
MORAL
Since all Direct Endorsement Lenders can now use Third Party Originators that are not subject to HUD/FHA and where the Direct Endorsement lender is responsible for those loans totally, you, the DE may want us to audit the TPOs for your own protection.
CHICAGO-AREA MAN ARRESTED FOR MORTGAGE FRAUD THAT OCCURRED BETWEEN 2008 AND 2010
FACTS
On April 7, SALVATORE DIBENEDETTO OF DOWNERS GROVE, Ill., appeared in federal court in Urbana, Ill. after his arrest on a 16-count indictment charging him with defrauding an Arcola, Ill. bank of approximately $2.5 million from April 2008 to February 2010. The indictment had remained sealed pending DiBenedetto’s arrest and court appearance.
The indictment alleges that from April 2008 to February 2010, DiBenedetto and others engaged in a fraudulent real estate scheme that defrauded the Arcola Homestead Savings Bank of approximately $2.5 million. According to the indictment, DiBenedetto was the president and shareholder of two businesses, AVANTI EQUITY GROUP, LLC AND X FACTOR LLC, both of Lombard, Ill. DiBenedetto allegedly represented that the businesses provided various mortgage services, including brokerage services, marketing, underwriting, and payment collection. During the period of the alleged scheme, DiBenedetto represented to the bank that he was performing mortgage management services on its behalf and for its benefit and the bank allowed DiBenedetto to perform activities related to the issuing of mortgages.
The indictment alleges DiBenedetto engaged in various false representations to owners of distressed residential and commercial properties to transfer the property to a third party who would obtain financing, rehabilitate the property and sell to interested buyers. The owners released their ownership of the properties and DiBenedetto recruited small business owners to buy various real estate in Chicago. DiBenedetto allegedly caused false representations to be made on loan applications and falsely represented to the title company that he was an authorized representative of the bank. Based on DiBenedetto’s false representations, the title company disbursed the funds to accounts controlled by DiBenedetto and another. DiBenedetto allegedly used loan proceeds to pay the expense of the properties and to convert the loan proceeds to his personal use and benefit.
If convicted, each offense of bank fraud (four counts); wire fraud (four counts); and making a false statement on a loan application (four counts) carries a maximum statutory penalty of up to 30 years' imprisonment and a fine of $1,000,000. Each count of money laundering (four counts) carries a statutory maximum penalty of 10 years in prison. (usattycdil4711)
MORAL
Chasing criminally from 2003 through present. Additionally, the Federal Deposit Insurance Corporation is issuing subpoenas, letters and lawsuits from California to Massachusetts involving anyone that brokered, sold or originated loans to various failed banks where the loans have defaulted, gone into foreclosure and the bank suffered a loss. The reason we know this? We represent a number of the brokers, loan officers and lenders served from here to Massachusetts. Have you been served recently?
FORMER OWNER OF GLOBAL EXPRESS CAPITAL SENTENCED TO 12 YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
On March 18, CONNIE S. FARRIS, THE FORMER OWNER/OPERATOR OF GLOBAL EXPRESS CAPITAL, WAS SENTENCED TO 12 YEARS IN PRISON, followed by three years of supervised release, and was ordered to PAY OVER $31 MILLION IN RESTITUTION for duping hundreds of investors into giving her millions of dollars for loans they thought were secured by real estate in Nevada, California, and Utah.
"Defendant Farris made false representations and promises in order to induce investors into giving her millions of dollars," said U.S. Attorney Bogden. "Farris told the investors that their investments were secured by real estate, when in fact, Farris knew they were not."
FARRIS, CURRENTLY A RESIDENT OF GROVER BEACH, CALIF., was sentenced by U.S. District Judge Roger L. Hunt. Farris was convicted of 39 counts of mail fraud in November 2010, following a three-week jury trial.
During the period of 2001 to 2003, Connie S. Farris owned several companies which purportedly loaned money to real estate developers for the purchase of undeveloped land. The companies operated as one business, and are known as and herein referred to as "Global Express." Global Express solicited investors through word of mouth and also through advertisements in the Las Vegas Review Journal.
The advertisements usually stated that Global Express was seeking investors for first deeds of trust and that they would receive interest at the rate of 14 percent per year. Farris received millions from investors for what they thought were projects in Bishop and Rancho Mirage, California; Las Vegas; and St. George, Utah. Farris and Global Express did not fund or close on any of those real estate loans, and thus, Farris/Global Express had no interest in the properties and the investors' funds were not secured with a deed of trust. In order to avoid being caught, Farris lulled investors into a false sense of security by causing them to receive monthly interest checks and other materials related to their investments. Farris was PERMITTED TO SELF-REPORT TO FEDERAL PRISON BY JULY 15, 2011 (usattynv33111)
MORAL
Like I have been saying. The “meltdown” has caused so much damage that the prosecutors are still chasing people form 10 years ago to the present. If you are contacted you should immediately contact your attorney.
OHIO TAX PREPARER, HOMEBUILDER, AND BANK EXECUTIVE SENTENCED FOR MORTGAGE FRAUD INVOLVING LUXURY HOMES
FACTS
On April 6, four more participants in a mortgage fraud scheme involving luxury homes in the Cincinnati area were sentenced in the Cleveland U.S. District Court. Seven people have now been sentenced as a result of the investigation.
ERIC D. DUKE OF CINCINNATI, was sentenced to 60 months in prison and ordered to pay $2,094,609.50 in restitution and FORFEITURE in the same amount. Duke pleaded guilty on Sept. 14, 2010 to three counts of conspiracy and four counts of lying to a bank (“loan fraud”). Duke was a self-employed tax preparer and interior designer. He also owned a property management company called RIVENDALE PROPERTY MANAGEMENT GROUP L.P., in Maineville, Ohio. Duke admitted that he fraudulently obtained more than $6 million in mortgages for four luxury homes by filing fraudulent loan applications in the names of others.
BERNARD J. KURLEMANN OF MASON, was sentenced April 1 to 24 months in prison and ordered to pay $1,115,409.50 in restitution for his role in the scheme in which he was able to walk away from $3.5 million in mortgage debt and in addition receive $500,000 in seller’s proceeds. His restitution order is based on the amount the lenders lost as a result of the fraud.
A jury convicted Kurlemann on Nov. 11, 2010 following an approximate three-week trial on one count of conspiracy to commit loan fraud or lying to a bank and two counts of loan fraud (lying to a bank) in connection with the false statements Kurlemann made on purchase contracts and settlement statements when selling two of his companies' luxury homes to straw buyers. The jury also convicted Kurlemann of bankruptcy fraud and other crimes connected with lying in his filings in KURLEMANN BUILDERS INC.’S bankruptcy.
TERRENCE J. MONAHAN JR. of Cincinnati, a BANK EXECUTIVE who ran the EXCLUSIVE CAPITAL MANAGEMENT GROUP AT HUNTINGTON NATIONAL BANK and participated in a loan fraud scheme in order to sell his Maineville house, was sentenced April 1 to 18 months in prison, fined $5,000 and ordered to pay $264,000 in restitution. Monahan pleaded guilty on Oct. 28, 2010 to one count of making false statements on documents submitted to the U.S. Department of Housing and Urban Development.
Others involved in the scheme include:
BRYAN SANNEMAN OF MASON, OWNER OF SANNEMAN HOMES INC. Sanneman pleaded guilty on Sept. 3, 2010 to two counts, conspiracy to commit loan fraud or lying to a bank and loan fraud (lying to a bank). He was sentenced on Feb. 8, to 12 months and one day in prison and ordered to pay $369,000 in restitution.
PAM SANNEMAN OF MASON, a former Sibcy Cline Realtor and mother of Bryan Sanneman, pleaded guilty on March 25, 2010 to one count of misprision of felony for knowledge of her son’s crime and failure to report it. She was sentenced on Feb. 8, 2011 to three years’ probation, the first six months to be served on house arrest.
TWO OF THE STRAW BUYERS ALSO PLEADED GUILTY to charges connected with their roles in the scheme. CHRISTOPHER GAGNON, OF FLORENCE, Ky., pleaded guilty to loan fraud. He was sentenced on Feb. 8, to one day of time served and three years of supervised release. He was also ordered to pay $930,000 in restitution. FRANCISCA WEBSTER of Cincinnati, was sentenced also to one day of time served and three years of supervised release. Webster pleaded guilty to conspiracy to commit wire fraud. (usattysdoh4611)
MORAL
Seven down. One a mother who tried to protect her son and two straw buyers who most likely knew it was wrong but did not think it would gather them a felony conviction. Now no voting rights, no holding public office and no owning businesses that require government licenses, no guns. All sorts of “No's." I guess I was just plain lucky when we had one that allowed for a misdemeanor. Stay out of trouble.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
