FACTS
Talal Ashek of Holland pleaded guilty to one count of conspiracy to submit false claims to a lending institution for his role in a mortgage fraud conspiracy. Sentencing will take place on Oct.17, before U.S. District Judge Neil V. Wake.
Ashek owned and operated Phillips Luxury Homes LLC, an Arizona construction firm that specialized in building multi-million-dollar luxury homes in areas such as Paradise Valley and Fountain Hills, Ariz. Between 2006 and 2007, Ashek solicited investors to obtain loans from banks. The loans were to be used to purchase a lot by the investor and to pay Ashek to construct a luxury home on the lot. Ashek and the investor agreed that they would share the profits after the luxury home was completed and sold. The majority of the investors solicited by Ashek were financially unqualified to obtain the multi-million dollar loans needed for the lot purchase and home construction.
Ashek fraudulently assisted the investors to qualify for the loans by depositing, or causing the deposit, of monetary funds into the investors' bank accounts. After the investor received Ashek's deposit, they then signed loan applications which falsely represented that they owned a significant amount of monetary assets. After the loan applications were submitted to the bank, the investor returned the deposit money to Ashek.
A conviction carries a maximum penalty of five years in federal prison, a $250,000 fine, or both. (usattyaz8411case number: cr-11-0975-phx-nvw)
MORAL
Instead of going boom, things went bust.
PHOENIX RE AGENT PLEADS GUILTY TO MORTGAGE FRAUD
FACTS.
On August 8 Robert Alexander of Phoenix pled guilty for his role as a real estate agent representing buyers who purchased multiple homes with loan applications containing false information and concealing from the lenders kick backs to the buyers. Alexander pleaded guilty to Conspiracy to Commit Wire Fraud. One other co-conspirator has pleaded guilty for his involvement in the conspiracy.
Between September 2005 and August 2006, Alexander found sellers of distressed properties and offered more than their asking price. He obtained inflated appraisals to support the loan amounts. He would recruit a buyer that he knew would not be qualified to purchase multiple homes. He facilitated the submission of loan applications containing false information. At closing, he instructed the escrow officer to disburse monies back to the borrower. He obtained both a commission and, in many cases, a bonus from the fraudulent transactions. The conspiracy involved as many as forty-four homes that went into foreclosure resulting in estimated losses of $2,500,000 to lenders. (case number: cr-11-1511-phx-ja)usattyaz8811)
MORAL
With $2.5 million in losses he is looking at doing time. Remember, the government does not necessarily compute the losses correctly. You do need to check the numbers against the sales price and FMV or the defendant may do more time when the loss is actually less.
FLORIDA GOES FROM 82,000 MORTGAGE LOAN ORIGINATORS TO 10,600. FRAUD STILL RUNS RAMPANT
FACTS
Four years ago, Florida had 82,000 mortgage loan originators. As of now that number is down to 10,600. More than 27% of loans investigated for mortgage fraud in 2010 were in Florida.
In April, state law enforcement officials had arrested five people in Tampa for mortgage fraud scheme. Fifty fraudulent residential mortgage loan applications and associated documents allegedly were sent to lenders in several counties in west-central Florida.
The previous month (March) state authorities and the Flagler County Sheriff's Office arrested 11 people from the Miami area allegedly involved mortgage brokers in Flagler, Volusia and Lake counties in east-central Florida. The investigation, named "Operation Fast Cash Kickback," found falsified appraisals among several other schemes. (flwrs81211)
MORAL
Just a few Floridian facts to let you know there is less competition on a positive note and that mortgage fraud is still a hot investigative item on the FBI list on a negative note. The investigations into mortgage fraud have increased by 12%.
FLORIDA MAN GETS 46 MONTHS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
On Aug. 5, Jose Arnaldo Rosario was sentenced to 46 months in prison, to be followed by three years of supervised release. Rosario previously pled guilty to conspiracy to commit money laundering and wire fraud. From at least November 2005 to Jan. 1, 2007, Rosario and his coconspirators purchased two units at 1331 Brickell Bay Dr., using bank loans they obtained through fraud, including the submission of false financial information, inflated property values, and straw buyers, among other misrepresentations.
Rosario and his coconspirators used the mortgage loan proceeds to purchase the properties, using little or no money of their own. Thereafter, the defendants distributed among themselves the difference between the inflated property value and the true value of the property. For about one year, to further the scheme and avoid detection, Rosario made monthly payments on the loan. Ultimately, Rosario stopped making payments and allowed the properties to go into foreclosure. At his plea hearing, Rosario acknowledged that the loss resulting from his actions was approximately $2.51 million. (usattysdfl8511)
MORAL
Two homes, two frauds, 46 months in prison! Anyone reading this think it is worth it?
FOUR ARRESTED IN FLORIDA FOR LOAN MODIFICATION SCAM
FACTS
On Aug. 9, Federal agents arrested four Florida men on charges that they scammed thousands of homeowners who were seeking loan modifications, according to authorities. The men all held positions with a company called Home Owners Protection Economics Inc., which posed as a non-profit organization, according to authorities.
Among the company's alleged misrepresentations was a false claim that it could virtually guarantee that its clients would receive loan modifications through the federal government's Home Affordable Mortgage Program.
The arrests were made by agents with the Special Inspector General for the Troubled Asset Relief Program, which has jurisdiction because the government's loan-modification program is funded with TARP dollars.
Arrested were Christopher Godfrey, president; Dennis Fischer, vice president and treasurer; Vernell Burris Jr.; and Brian Kelly.
The men face charges of conspiracy, wire fraud, mail fraud, and misuse of a government seal. The firm collected more than $3 million in fees from homeowners, according to authorities. (nmn81011)
MORAL
I trust they have sufficient funds independent of the $3 million alleged to retain competent defense counsel. The federal law provides that money from “ill-gotten gains” cannot be used to retain counsel.
MINNESOTA MORTGAGE BROKER PLEADS GUILTY TO $20 MILLION FRAUD
FACTS
On Aug. 10, in federal court, Derrick Ivan Lance, an Edina mortgage broker pleaded guilty for his role in a $20 million mortgage fraud scheme that involved 57 properties.
Lance admitted that between 2004 and 2007, he conspired with others to obtain mortgage loan proceeds based on fraudulent documentation. Lance's unnamed co-conspirators identified residential properties available for purchase and recruited buyers for those properties. Two of the co-conspirators told buyers they would receive payments (i.e., kickbacks) after the property transactions closed, and that they could put those payments toward the mortgages or use them to improve the properties.
Lance admitted using his licensed mortgage brokerage and his position within that brokerage to help prepare and submit false mortgage loan applications, which misrepresented the buyers' true financial situation. Based on those fraudulent documents, loans were approved, and loan proceeds were disbursed by wire transfer into the accounts of various title companies. Due to paperwork that misrepresented the true nature of the real estate transaction, Lance and his co-conspirators then caused those title companies to disburse a portion of the proceeds from each transaction into bank accounts not associated with the property buyers, the purpose being to conceal the undisclosed kickbacks. Lance received approximately $200,000 for assisting buyers to secure mortgage loan funding for 26 properties.
For his crime, Lance faces a potential maximum penalty of 20 years in prison. (usattymn81011)
LAS VEGAS REAL ESTATE AGENT CONVICTED OF TAX AND BANKRUPTCY FRAUD
FACTS
On Aug. 4, German Posada pleaded guilty before U.S. District Judge Philip M. Pro to charges of filing a false 2004 individual income tax return and making a false statement in a bankruptcy proceeding.
Posada admitted to filing a false individual income tax return, Form 1040, for 2004 that under-reported the income from his business as a real estate agent in the Las Vegas area. Between 2003 and 2005, Posada earned commission income from International Realty and another realtor. He asked that International Realty issue some of his commission checks in the name of his then-girlfriend, and deposited those checks into a bank account in her name. Posada also admitted under-reporting his business income on his 2003 Form 1040 and failing to file a timely 2005 Form 1040, despite knowing of his legal duty to report the approximately $557,212 in income that he received in 2005.
In 2005, Posada filed for bankruptcy in the U.S. Bankruptcy Court for the District of Nevada. In his May 13, 2005, bankruptcy petition, and again in his Aug. 2, 2005, amended petition, he made false statements, including that: he had no current income; he had received no income during the two years immediately preceding 2005; and 17 creditors held unsecured non-priority claims totaling $466,885 against him. Then, on Sept. 2, 2005, at a meeting of creditors, Posada falsely testified under oath before the bankruptcy trustee that he had received “one or two” and “probably two” commissions since May 13, 2005, when in fact he knew that he had received at least 19 commission checks totaling $130,575 during that time period.
Posada agreed to pay restitution to the IRS in the amount of $212,016, and to pay restitution to any victims of the bankruptcy fraud, in an amount to be determined by the court at sentencing.
SENTENCING HAS BEEN SET FOR DEC. 5, 2011, and Posada remains free on bail pending sentencing, where he faces a maximum sentence of three years in prison on the tax charge and five years in prison on the bankruptcy fraud charge. (usattynv8411)
MORAL
According to the U. S. Attorney press release he earned over $500,000 gross in 2005. Now he will have a federal felony conviction which can and probably will cost him his real estate license. I do not think it was worth it. Do you?
CINCINNATI MAN CHARGED IN $6 MILLION MORTGAGE FRAUD
FACTS
On Aug. 11, a federal grand jury issued an indictment charging Rodney T. Riddle with fraudulently obtaining $6,971,870 in loans on approximately 59 properties by convincing his clients, which included close friends and fellow church members, to purchase residential properties at over-inflated prices.
Almost all of the properties have been foreclosed totaling losses of approximately $2,617,120. The indictment charges Riddle with two counts of mail fraud, two counts of wire fraud and one count of bank fraud. Each count is punishable by up to 30 years in prison and a fine of up to $1 million.
The indictment alleges that, from about 2001 to 2006, Riddle ran a scheme to defraud lenders by submitting loan application paperwork that contained false statements including the amount of assets held by the “buyer,” the source of the down payment, and the buyers' income. He also allegedly included phony invoices from a company he owned claiming that renovation or repair work had been completed on the properties as a way to justify the over-inflated purchase prices and pay for the down payments. (usattysdoh)
MORAL
Notice that if true he did it to friends and fellow parishioners of his church, people who already trusted him. I would say if found guilty he is looking at a hefty prison sentence considering the victims if true.
FOUR IN HOUSTON INDICTED FOR MORTGAGE FRAUD
FACTS
On Aug, 11, two Houston businessmen, a mortgage company loan officer and a title company attorney and escrow officer were indicted for alleged involvement in a scheme to defraud residential mortgage lenders of more than $22 million in loans. A grand jury returned a six-count indictment charging Walter Ryan Macapaz, Tony David Maldonado, Buffy Marie Lawrence and Lisa Carol Ross with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.
According to the indictment, from November 2005 through October 2008 Macapaz and Maldonado recruited straw borrowers to obtain mortgage loans to purchase condominium units in the Commerce Towers building located on Main Street in downtown Houston as well as residential homes in the Houston area. Macapaz and Maldonado allegedly used fraudulent documents to help the borrowers qualify for the loans including documents with false and misleading information about the borrowers' income, assets, liabilities, employment status, bank deposits, rental payments, intent to use properties as a primary residence and source of funds used to close the real estate transactions. Lawrence, a loan officer for mortgage broker Mortgages First Real Estate Services LLC, allegedly assisted the borrowers to obtain the loans. Ross, an attorney and escrow officer for Vision Title LLC, allegedly arranged for disbursements from the title company to be turned into cash and money orders and distributed to the involved parties. According to the indictment, the mortgage loans allegedly totaled more than $22 million.
The maximum penalty for each wire fraud and conspiracy count is 20 years in prison as well as substantial fines. A conviction for money laundering conspiracy carries the most significant fine of $250,000 or twice the amount of the criminally derived property, whichever is greater. (usattysdtx81111)
MORAL
I would request you note that the prosecutors are chasing loans that funded six years ago. They have 10 years to chase bad loans, meaning they can prosecute loans that occurred in 2004. The second thing I would like you to note is that one of those indicted is an attorney. Here is a person that spent four years earning a bachelors degree in college; three more years earning a Juris Doctor degree in law school and three to six months studying for a three-day bar exam so he could be a lawyer. Even doing it normally would take him seven years and if lucky she would be 25 when he received his license. Now she risks being broke, dishonored, disbarred and alienated. Tell me, is it worth it?
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
