7 Defendants Indicted in Mortgage Fraud Scheme

admin —  July 26, 2012 — Leave a comment

Steven Klebosits, 40, St. Charles, Illinois, Thomas Hyland, 40 Glen Ellyn, Illinois, Joseph Natalizio, 39, Bloomingdale, Illinois, Diomede Cardone, 32, Addison, Illinois, Jason Strever, 30, formerly of Sandwich, Illinois, Joseph Abate, 48, Downers Grove, Illinois, and Yusef Allan, 31, Chicago, Illinois were indicted for allegedly participating in a scheme to fraudulently obtain more than 20 residential mortgage loans totaling approximately $8.5 million from various lenders.

Steven Klebosits and Thomas Hyland owned SNAP Holdings, LLC, through which they bought and sold properties. Joseph Natalizio was a licensed loan originator and the president and co-owner of JNC Mortgage, Inc., which operated as United Mortgage Services in Addison, Illinois.  Diomede Cardone was also a licensed loan originator who worked at United Mortgage Services. Jason Strever owned JMS Management Corporation.  Joseph Abate owned APJ Consulting, Inc.,and Yusef Allan was a licensed loan originator who owned Silver Key Lending and Investment Group, LLC, in Orland Park, Illinois.

The indictment alleges that the mortgages were obtained to finance the purchase of properties primarily in and around Englewood and West Englewood in Chicago by buyers who were fraudulently qualified for loans while the defendants allegedly profited.  As a result, various lenders and their successors incurred losses because the mortgages were not fully recovered through subsequent sale or foreclosure. 

Between March 2007 and November 2008, all seven defendants and others allegedly schemed to obtain the fraudulent mortgages by making false representations in loan applications, supporting documents, and HUD-1 settlement statements concerning the buyers’ income, employment, financial condition, source of down payments, and intention to occupy the property.       

As part of the scheme, Klebosits and Hyland allegedly sold properties at inflated prices to buyers whom they knew were fraudulently qualified for mortgage loans.  Klebosits, Hyland, Cardone, Strever, and Abate recruited buyers to purchase properties from entities, including SNAP Holdings, owned by Klebosits and Hyland, knowing that the buyers would be qualified through false statements made to lenders, the indictment alleges. 

Klebosits and Hyland allegedly provided funds to buyers, including through Strever, Allan, and Abate, knowing that the funds would be falsely represented to the lenders as the buyers’ down payments.  Using false closing documents, Klebosits and Hyland concealed from lenders that they had provided the funds used for down payments and inflated the purchase prices, thus causing lenders to finance transactions for buyers who were actually contributing little or no equity, according to the indictment. 

All seven defendants were charged with one or more counts of mail fraud and/or wire fraud in a 12-count indictment that was returned by a federal grand jury.  The indictment also seeks forfeiture of at least $8.5 million. 

The charges were announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General; and Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. 

The defendants will be arraigned on dates yet to be determined in U.S. District Court. 

The government is being represented by Assistant U.S. Attorney Jason Yonan. 

Each count of wire fraud and mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory.  If convicted, the Court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater.  The Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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