Sixto Figueroa, 58, his wife Susy Figueroa, 45, Rolando Herrera, 64, and Manuel Garcia, 41, all of Miami, Florida, were all found guilty of participating in a mortgage fraud scheme that resulted in the issuance of $832,118 in mortgage loans from Wachovia Bank.
According to the evidence produced at trial and as previously reported on Mortgage Fraud Blog, defendants Sixto and Susy Figueroa owned residential lots in Port Labelle, Florida. The Figueroas recruited associates, including defendants Herrera and Garcia, who each received a fee for their participation in the crimes, to act as straw buyers to purchase lots from the Figueroas at inflated prices. Without the bank’s knowledge, the Figueroas provided the down payment to buy the properties and money to pay the mortgages for a period of time.
As part of the scheme, the Figueroas submitted loan applications to Wachovia that contained false information. The applications contained false information regarding the straw buyers’ financial condition, including fraudulent tax returns and fabricated bank statements, which falsely suggested that the straw buyers had greater income and assets than they actually did. Additionally, the HUD-1 Settlement Statements provided to Wachovia falsely stated that the straw buyers would use their own money to pay closing obligations, including the down payment. In fact, however, the Figueroas paid all of the straw buyers’ closing obligations.
After the loans were approved, the bank forwarded the loan proceeds to a title company for closing. For three of the property sales, at the Figueroa’s insistence, the title agent improperly released these funds to the Figueroas. They, in turn, used the money to pay the straw buyers’ closing obligations for those three deals. After the closing, each of the Wachovia mortgage loans eventually went into default after the non-qualifying straw buyers failed to make the required mortgage payments, resulting in substantial losses to Wachovia.
The defendants were found guilty of conspiracy to commit bank fraud and bank fraud, in violation of Title 18, United States Code, Sections 1349 and 1344. Each defendant faces a maximum of thirty years’ imprisonment. Sentencing is scheduled for September 2010.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael K. Fithen, Special Agent in Charge, U.S. Secret Service, and James K. Loftus, Director, Miami-Dade Police Department made the announcement.
Mr. Ferrer commended the investigative efforts of the Federal State Mortgage Fraud Strike Force with special commendation to the Miami-Dade Police Department, Economic Crimes Bureau, and the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorneys Joseph B. Shumofsky and Andrew K. Levi.