MORE ON THE DODD-FRANK ACT AS APPLIED TO THE CONSUMER FINANCIAL PROTECTION BUREAU EFFECTIVE JULY 21, 2011
FACTS
The U.S. Department of the Treasury ("Treasury") gives notice of the establishment of a Privacy Act System of Records primarily for the benefit of the new Consumer Financial Protection Bureau which will become active July 21. Comments are being sought until Feb. 9. This new system of keeping records will also become effective Feb. 9.
MORAL
The CPFB will now become a central repository for all complaints allowing it to accumulate data on violators of financial laws fast as well as lining up the witnesses quickly.
MASSACHUSETTS RESIDENT CHARGED WITH MORTGAGE FRAUD
FACTS
On Jan. 11, Rowland Kojo Adjei Sapong, a citizen of Ghana who formerly lived in West Boylston, was charged in an information with conspiring to commit wire fraud by conspiring with a mortgage broker and various property buyers to defraud numerous mortgage lenders who financed the purchase of homes.
The information alleges that, between March 2002 and March 2008, Sapong bought approximately 17 multi-family homes in the Worcester area, and secured financing for most of them by making false statements on loan applications. These false statements usually concerned Sapong’s employment and monthly income, and each application also falsely stated that Sapong was a United States citizen. The Information further alleges that Sapong divided each of the properties into condominium units—over 50 in all—and sold the units, usually to friends and acquaintances, at inflated prices. Working with a local mortgage brokerage business, Sapong allegedly arranged for these buyers to make false statements on their own loan applications to secure the financing necessary to buy Sapong’s condominium units. The Information alleges that Sapong made an average of about 100% profit on each of the homes in a matter of months, and that, after the units had been sold off to buyers, all eventually went into foreclosure. According to the information, the government estimates that Sapong caused losses to mortgage lenders of over $1 million.
If convicted on these charges, Sapong faces up to 20 years’ imprisonment, to be followed by three years of supervised release and a $250,000 fine. (usattyma11111)
MORAL
I would like you to notice that the federal prosecutors went back to mortgage fraud that occurred in 2002, over nine years ago. This is to reassure you that the federal prosecutors have 10 years to bring a criminal action from the date of the last event that occurred in the transaction. This usually is when the person receives the commission check and cashes it. Cashed any checks lately?
NEW YORK REAL ESTATE ATTORNEY PLEADS GUILTY TO
MORTGAGE FRAUD
FACTS
On Jan. 10, Cheddi Goberdhan, a real estate attorney, pled guilty before U.S. District Judge Shira Scheindlin in Manhattan federal court to a seven-count indictment charging him with conspiracy to commit bank and wire fraud, and six counts of bank fraud, in connection with a scheme that defrauded banks out of more than $23 million in home mortgage loans. Goberdhan made hundreds of thousands of dollars in illicit profits from the scheme, in which he worked closely with corrupt loan officers of GuyAmerican Funding, a mortgage brokerage firm in Queens. Goberdhan is the ninth defendant convicted of participating in this mortgage fraud scheme.
According to the superseding indictment and statements made during the proceedings in this case, Goberdhan participated in a massive mortgage fraud scheme operated through a branch office of GuyAmerican Funding Goberdhan's coconspirators in the scheme included, among others, the president of GuyAmerican Funding, David Ramnauth, GuyAmerican loan officers Peggy Persaud, Orette Killikelly and George Esso, individuals who recruited homeowners and straw buyers Elton Lord, Rafick Baksh and Mahamood Hussain, and another real estate lawyer Ravi Persaud. As part of the scheme, the coconspirators arranged home sales between straw buyers and homeowners in financial distress who were willing to sell their homes. The GuyAmerican loan officers obtained mortgage loans for the sham deals by submitting fraudulent applications to banks and lenders, and using fraudulent representations about the supposed buyers' net worth, employment, income, and plans to live in the properties. Frequently, the co-conspirators used the same straw buyer to obtain multiple mortgage loans. The co-conspirators kept some or most of mortgage proceeds for themselves, while the straw buyers ultimately defaulted on the mortgages, causing millions in losses to the banks and lenders.
Goberdhan acted as the closing attorney and the straw buyers' attorney on numerous mortgage loans originated through GuyAmerican Funding, including loans in which the same straw buyer was used to purchase multiple properties within a short period of time. Goberdhan sent false documents to the banks, received the loan money from the banks into his attorney account, and made illicit payments from the sales proceeds to himself and his co-conspirators. Goberdhan's wife also owned the title company that was used for many of the transactions, in violation of New York disciplinary rules, which allowed him to further profit from the scheme.
Goberdhan faces a maximum sentence of 210 years in prison. He will also be required to pay restitution to the victims of his offense and to forfeit the proceeds of his crimes.
Ramnauth, Peggy Persaud, Killikelly Rajnarine Singh, Elton Lord and Taramatee Singh previously pled guilty, and Ravi Persaud and Esso were convicted after trial. Two charged defendants, Baksh and Hussain, are fugitives. (usattysdny11111)
MORAL
Note the following from above and see what looks familiar to you on loans you are aware of that took place over the last 10 years, 10 years being the length of time in which the federal prosecutor can charge anyone with mortgage fraud that occurred in the past ten years.
1. Superseding indictment usually means Goberdhan was offered a plea deal on the original indictment and declined to take it. The federal prosecutor thereafter adds even more charges on a superseding indictment which will make the time of imprisonment, restitution and forfeiture even higher. Meaning you want to go to trial then let me tell you how expensive it will be via the superseding indictment.
2. There were two lawyers involved not one. Four years of undergraduate school, three years of law school, build a reputation and now it is all gone as the license will go if it has not already.
3. Whereas in many cases the federal prosecutors let the straw buyers off because of ignorance or supposed ignorance they are now prosecuting them and “I did not know it was illegal” no longer flies.
4. Putting down ‘primary residence” on the 1003 or any part of the loan process that the buyer intends to occupy the premises as their primary home is committing fraud because you are trying to get a cheaper interest rate and is mortgage fraud punishable up to 20 years in federal prison for each loan application. If you do not believe it read the language just above the borrower signature line. And just guess who the borrower is going to say told them to do it?
5. The lawyer here faces 210 years in prison. I guess the government thinks he has a lot of longevity.
THE LAST OF SIX FAMILY MEMBERS PLEADS GUILTY IN OHIO TO MORTGAGE FRAUD
FACTS
On Jan. 7, the last of six family members charged with operating a mortgage fraud conspiracy between 2004 AND 2009 pled guilty in United States District Court. One of their employees has also pled guilty to participating in the conspiracy. This makes seven.
Salvatore Sferrazza pled guilty to one count of conspiracy to commit wire and mail fraud, punishable by up to 20 years’ imprisonment, and one count of money laundering, which is punishable by up to 10 years in prison.
Keiron Ashurst pled guilty to one count of conspiracy to commit wire and mail fraud, punishable by up to 20 years in prison. She is a citizen of Great Britain and may face immigration consequences.
Heather Ashurst pled guilty to one count of conspiracy to commit wire and mail fraud, punishable by up to 20 years in prison.
Debbie Sferrazza pled guilty to one count of conspiracy to commit wire and mail fraud, one count of money laundering, and three counts of filing false income tax returns. Conspiracy is punishable by a maximum sentence of 20 years in prison. Money laundering is punishable by up to 10 years, and each of the tax charges is punishable by up to three years in prison. Debbie Sferrazza is a citizen of Great Britain, so she may face deportation. She is the wife of Salvatore Sferrazza and the sister of Keiron Ashurst.
James Ashurst pled guilty to one count of conspiracy to commit wire and mail fraud, punishable by up to 20 years’ imprisonment, and one count of money laundering, which is punishable by up to 10 years in prison. He is the husband of Heather Ashurst and a son of Debbie Sferrazza.
Whitney Bonapfel, Debbie Sferrazza’s daughter, pled guilty to one count of making a false statement or report to HUD (a misdemeanor offense). She faces a maximum sentence of one year in prison, a fine of up to $100,000, and one year of supervised release.
In May 2010, Tabatha Sturgill, who was employed by Debbie Sferrazza, pled guilty to one count of conspiracy to commit wire and mail fraud, punishable by up to 20 years in prison, and one count of filing a false income tax return, which is punishable by up to three years in prison.
According to court documents, the conspirators prepared false loan applications and used fraudulent supporting documents to acquire loans in connection with 14 real estate transactions involving eight residential properties.
The pleas also require the defendants to make restitution to the lenders involved and to the IRS. (usattysdohio1711)
MORAL
Husband, wife, mother, daughter, sister, son. The family stayed together and never one. And now as one they get to see the inside of a penitentiary with no sun. Is this is or is this not a very good pun?
OREGON FINES COMPANY AND ITS OWNER $30,000 FOR ILLEGAL LOAN MODIFICATIONS
FACTS
The Oregon Department of Consumer and Business Services has fined David Richard Lies and Home Rescue Financial Services LLC of Ashland $30,000 and ordered him to cease and desist violating state law on modifications.
Home Rescue collected $1,500 from a homeowner with the promise of helping stop a foreclosure and obtain a loan modification, but never delivered on those services. Oregon law allows a maximum upfront fee of $50. Companies providing those services also must be registered with DCBS as a debt management company or licensed as a mortgage broker—Home Rescue held neither registration or license.
Home Rescue violated several other parts of the law, including failing to disclose terms of the contract and fees, failing to provide the homeowner with an analysis showing how its services would be beneficial and relaying misleading information in an advertisement. DCBS has 88 investigations under way regarding potential violations of the law. (ordcbs1311)
MORAL
All agencies from federal to state are climbing down hard on anyone and I do mean anyone doing loan modifications or promising foreclosure forbearance. So if you want to do it, by all means do so. We will be happy to represent you in any disciplinary, criminal or civil actions along with others we currently represent.
MORTGAGE RESCUE SCAM ARTIST PLEADS GUILTY
FACTS
On Jan. 6, Linda Sadr, Manassas, Va., pled guilty to mail fraud, wire fraud, and money laundering in relation to a “mortgage elimination” scheme that caused more than $10 million in losses.
Sadr was indicted on Nov. 23, 2010, by a federal grand jury on two counts of mail fraud, four counts of wire fraud, and two counts of money laundering. Sadr plead guilty to all counts of the indictment. Sadr faces a maximum penalty of 20 years in prison on each count of mail and wire fraud and 10 years in prison on each count of money laundering when she is sentenced on May 6.
From 2004 through 2008, Sadr marketed a scheme known as a “Mortgage Elimination Program.” Sadr represented to the homeowners that lenders making refinance loans were operating illegally by, among other things, bundling the loans for resale and selling them to investment banks, which then used the loans as collateral to borrow additional funds. Sadr fraudulently represented to homeowners that she and her companies could arrange for the satisfaction of the homeowners’ mortgages on their residences. Sadr represented that she would challenge the lenders, on behalf of the homeowners, for their purported illegal actions, would prevail in the challenges, and would thereby eliminate the mortgages.
In general, those homeowner clients with sufficient equity in their homes who participated in the Mortgage Elimination Program were required to refinance their mortgages with maximum cash-out refinance loans. Subsequent to settlement, individual homeowner clients were required to pay 10% to 15% of the proceeds of the cash-out refinance loan as a fee to Sadr or to one of the entities she controlled. Clients were also required to give Sadr the equivalent of 12 to 18 months of advance mortgage payments to be held in “escrow,” an amount that Sadr claimed she would use to pay the refinanced mortgages for the homeowner clients until their mortgages were eliminated.
In addition to participation in the Mortgage Elimination Program, Sadr offered some clients the option of investing equity from their refinance or other monies in exchange for a guaranteed rate of return of 12 to 18 percent. Sadr guaranteed that the principal on those investments would be refunded at the end of the investment period.
Sadr recruited her mortgage elimination services to new clients via word of mouth through satisfied past homeowner clients, who thought their mortgages had been eliminated through monetary settlements received from Mortgage Elimination Program challenges. In reality, the mortgages were eliminated because Sadr repaid the refinance lenders in full. In so doing, Sadr used the monies she obtained from other unsuspecting homeowner clients without their knowledge or consent.
None of the more than 150 participants in the program received reconveyances on their homes and none received refunds from Sadr for the fees that were paid to her or the principal on the investments they made through Sadr and her entities. To date, the known homeowner client victim loss from Sadr’s mortgage elimination scheme and related high-yield investment scheme exceeds $10 million. (usattyedva1711)
MORAL
They chased this lady through five years (2004-2008). They now have her and it looks like she is going to do a lot of time in federal prison based on the loss amount.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
