FACTS Kenneth A. Swanger, a real estate investor, pleaded guilty in the U.S. District Court in Sacramento to conspiring with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County.
The primary purpose of the conspiracy was to suppress and restrain competition and to obtain selected real estate offered at San Joaquin County public foreclosure auctions at noncompetitive prices.
After the conspirators' designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group's illicit profit. The illicit profit was divided among the conspirators in payoffs. According to his plea agreement, Swanger participated in the scheme beginning in or about June 2009 until in or about October 2009.
Swanger pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine. Swanger also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.
These charges arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. (usattyedca12712)
MORAL
As you can see, the federal prosecutors are chasing everyone now and the amount of loss is becoming less of a factor as shown here.
TWO INDICTED FOR MORTGAGE FRAUD IN SACRAMENTO
FACTS
On Jan. 26, a federal grand jury returned an indictment charging two people in connection with mortgage fraud. Andrey Kim of Sacramento and Sultanmurod Rashidov of Brooklyn, N.Y., were charged with mail fraud and money laundering the scheme that allegedly resulted in the loss of at least $180,000 to mortgage lenders. Court records say Kim and Rashidov took out $236,000 in home equity loans on real estate in West Sacramento.
Kim allegedly inflated his income and got a $58,800 home equity loan. He then signed a deed granting joint ownership of the real estate to Rashidov, who then allegedly got a $178,000 equity loan by using false information about his employer and gross monthly income.
Kim also was indicted in a different mortgage fraud scheme in December. Rashidov is thought to be out of the country. Remember, they are both innocent until proven guilty in a court of law. (sacbusjl12712)
MORAL
You all remember I have been telling you the federal prosecutors have been clamping down harder. This is more proof. The loan amounts are a lot lower. Kim's loan was only $58,800 and they indicted.
CONNECTICUT MORTGAGE BROKER SENTENCED TO 30 MONTHS FOR MORTGAGE FRAUD; ANOTHER RECEIVED 10 YEARS
FACTS
On Jan. 20, Nathan Russo of Johnston, R.I., was sentenced in Hartford to 30 months of imprisonment, followed by three years of supervised release, for his role in an extensive mortgage fraud scheme.
Between February 2007 and April 2010, Syed Babar orchestrated a scheme to obtain millions of dollars in residential real estate loans, including loans insured by the Federal Housing Administration, through the use of sham sales contracts, false loan applications, and fraudulent property appraisals. Russo was a mortgage broker employed by Action Mortgage Corp., a licensed mortgage broker in Cranston, R.I. Russo worked with Babar in brokering the loans, and he kicked back a portion of his mortgage broker fees to Babar as part of the fraudulent scheme.
In 2007, Russo acted as a mortgage broker for five residential properties, four of which were located in Connecticut, which were purchased by a straw buyer and co-conspirator. Russo prepared loan packages for these transactions, including loan applications for the buyer that he knew INCLUDED FALSE INFORMATION ABOUT THE BUYER'S employment, assets and liabilities and the buyer's INTENTION TO OCCUPY THE PROPERTY AS HIS PRINCIPAL RESIDENCE. The loan applications also were supported by false documentation, including earning statements and fraudulent bank records. Contrary to Russo's representations in the loan applications, he failed to interview the straw purchaser of four of the five properties. In an attempt to make it harder for lenders to discover the fraud, Russo brokered these five loans and used a different lender for each loan.
On the applications for three of the houses, Russo failed to disclose to lenders that the straw buyer had purchased other properties, notwithstanding Russo's role as broker on them. For example, closings for two properties on Walnut Street in Willimantic took place on the same date, June 29, 2007, and neither of Russo's applications disclosed the other loan being sought or the other property being purchased.
Babar and his co-conspirators conducted approximately 30 fraudulent mortgage transactions. As a result, various lenders suffered total losses of approximately $4.75 million. Chief Judge Thompson ordered Russo to pay restitution in the amount of $1,157,753.25.
On Jan. 6, 2011, Russo pleaded guilty to one count of conspiracy to commit wire fraud. A total of 13 individuals, have been convicted in connection with the scheme. On Nov. 28, 2011, Syed Babar was sentenced to 120 months of imprisonment. Six other scheme participants have received prison terms ranging from 48 to 90 months. (usattyct12312)
MORAL
Pleads to one count and gets two and a half years in a federal prison! However the other one got 10 years. Did you notice the feds went back four years in this case to get to the loans?
FLORIDA MAN GETS 30 MONTHS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
On Jan. 20, Andrew F. Vulpis was sentenced to 30 months in federal prison for conspiracy to commit bank fraud. As part of his sentence, the court also entered a money judgment in the amount of $1,245,145.26, the proceeds of the charged criminal conduct. Vulpis forfeited a 2007 Volvo S40-5 sedan as a substitute asset in partial satisfaction of the money judgment.
From May 2007 through December 2007, Vulpis, who was then employed as an officer of Wachovia Bank in Tampa, played a role in 12 residential real estate transactions in Hillsborough and Pasco Counties. All of the transactions involved fraud.
With respect to 11 of the real estate transactions, Vulpis, in his capacity as an officer of Wachovia Bank, caused the submission of false and fraudulent loan applications to Wachovia Bank. Specifically, Vulpis knew that the income of the applicants stated on all 11 loan applications was materially inflated. As to 10 of these real estate transactions, he knew that the applicants failed to qualify for the particular Wachovia Bank loan program. In four instances, Vulpis caused the disbursement of loan proceeds to his co-conspirator, who was the seller of the subject properties.
In one of the real estate transactions, which took place on Dec. 28, 2007, Vulpis purchased a residential property owned by a co-conspirator. The sales price was $200,000, and Vulpis applied for a $180,000 mortgage loan from the Bank of America. In the loan application, Vulpis falsely inflated his income and assets, as well as the amount of money that he would contribute toward the down payment. A co-conspirator provided Vulpis with the money for the down payment, but neither Vulpis nor the co-conspirator disclosed to the Bank of America, a FDIC-insured institution, the fact that the co-conspirator was the source of the down payment.
Co-conspirator Sang Min Kim pleaded guilty on June 15, 2019 and got 41 months in jail. Another co-conspirator, Francisco Acevedo Jr. pled guilty for his role on Sept. 9, 2011 and is awaiting sentencing (usatty12012mdfl)
MORAL
It seems like Kim cooperated but received a harsher sentence. Why? Notice how these cases in the east go back four years on loans to prosecute and then as you come farther west, the loans are from 2004 like seven years ago instead of four—interesting phenomenon.
VIRGINIA WOMAN GETS 57 MONTHS IN FEDERAL PRISON FOR RUNNING A FORECLOSURE RESCUE OPERATION
FACTS
On Jan. 26, KATHLEEN HARPS OF CHESAPEAKE, Va., was sentenced in Norfolk federal court to 54 months in prison for operating a foreclosure rescue mortgage fraud scheme.
During 2006 Harps owned and operated the now defunct Hampton Roads businesses, NEW BEGINNINGS GROUP LLC, AND IMAK GROUP LLC, which specialized in “foreclosure rescue.” Through these businesses, Harps and others solicited homeowners in financial distress and facing foreclosure, to agree to sell their homes to Harps or straw buyers working with her. Harps promised the homeowners that, during a one year period after the sale, they could remain in their homes without having to pay the mortgage, while simultaneously putting their financial affairs back in order, so that they could buy back their homes at the end of the year. This, however, failed to occur. Instead, court records show that Harps and her straw buyers made assorted false statements to fraudulently obtain mortgage loans, upon which they later defaulted. As a result, foreclosures soon followed and the homeowners lost both their homes and substantial sums of homeowner equity, which was siphoned out of the closing transactions and paid to Harps' businesses. (usattyedva1261)
MORAL
I guess she rescued herself to room and board for 54 months. Anyone else out there do foreclosure rescues in the last 10 years? Five years? See your attorney now.
