5 Year Sentence in Short Sale Scheme

Rachel Dollar —  August 17, 2015 — Leave a comment

Charise Stone, 46, Ashburn, Virginia, was sentenced to 60 months in prison, followed by three years of supervised release for her role in a real estate short sale scheme that included tax and mortgage fraud, and passing fraudulent financial documents. Stone was also ordered to forfeit $721,552, and ordered to pay restitution of $2,441,174 to the victim financial institutions and the IRS.

Stone was found guilty by a federal jury on May 27, 2015 in the short sale scheme. According to court documents, from 2007 to 2010 Stone targeted distressed homeowners who owed more on their mortgage loan than the market value of the home with false promises of financial recovery. Stone acquired distressed homeowners’ properties in her own name or under entities she controlled, made false representations to mortgage lenders in order to induce approval of the short sales, and then re-sold the properties—often the same day or the next—to new buyers at a price above the short sale amount, in violation of agreements made with mortgage lenders.

Jose Marinay was also involved in the short sale scheme.  He owned a settlement company that closed every short sale transaction for Stone. Marinay pleaded guilty to wire-fraud conspiracy on May 27, 2014. At his and Stone’s direction, fraudulent HUD-1 settlement statements were prepared to facilitate the transactions in the short sale scheme, and Stone destroyed some of the incriminating documents after closings. Financial institutions suffered losses of at least $2.2 million from the short sale scheme, while Stone profited more than $720,000 from these transactions but failed to file individual income tax returns. She also sent fictitious bonds to the IRS in an attempt to pay off her tax liability, and she sent fake international promissory notes to creditors purporting to satisfy her credit card debt as well as her mortgage loan.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas Jankowski, Special Agent in Charge of IRS-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office, made the announcement after sentencing by U.S. District Judge Claude M. Hilton.

This case was investigated by the FBI’s Washington Field Office and IRS–CI. Assistant U.S. Attorney Uzo Asonye and Assistant Chief Todd Ellinwood of the Justice Department’s Tax Division are prosecuting the case.

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Rachel Dollar

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