7 Indicted in $49.6M Mortgage Fraud Scheme Involving North Carolina Property Development

Allison Tussey —  January 13, 2014 — Leave a comment

Seven defendants have been charged with running an alleged mortgage fraud scheme which resulted in the approval of approximately $49.6 million in fraudulent loans, and millions in losses to the lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank. The properties referred to in the indictment consist of multiple vacant lots in a community development in North Carolina.

The indictment charges the following individuals as co-conspirators: Domenico “Dom” Rabuffo, 77, Miami, Florida; Mae Rabuffo, 74, Fort Lauderdale, Florida; Diane M. Hayduk, 64, Miami; Raymond E. Olivier, 52, Land O’ Lakes, Florida; Curtis Allen Davis, 51, Tampa, Florida; Victor Miguel Vidal, 48, Miami; and, Lazaro Jesus Perez, 43, Miami Lakes, Florida.

According to the indictment, the defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders from 2003 to 2008. Defendants Domenico Rabuffo and Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, Cashiers, North Carolina.

According to the indictment, Domenico Rabuffo, Mae Rabuffo, Diane M. Hayduk, Raymond E. Olivier, and Curtis Allen Davis recruited numerous straw buyers to purchase lots in the Hampton Springs development. The straw buyers financed the purchase of the building lots in Hampton Springs using mortgage loans and further obtained construction loans for the same properties. Defendants caused the straw buyers to submit false and fraudulent loan applications and related documents to the lenders to ensure that the straw buyers qualified for the loans. Defendant Victor Miguel Vidal served as a loan officer at SunTrust Mortgage, where he shepherded the fraudulent loan applications of the straw buyers through the approval process, including fraudulent applications for $33 million in construction loans. Defendant Lazaro Jesus Perez furnished fictitious and fraudulent accountant’s letters to Vidal, in support of various fraudulent mortgage loan applications submitted to SunTrust Mortgage.

Ultimately, based on the indictment, the lenders were induced to advance approximately $49.6 million in loan proceeds in connection with this scheme. The proceeds of the defendants’ mortgage fraud scheme were funneled through shell-corporation accounts controlled by Domenico Rabuffo and Mae Rabuffo, and other accounts, for the use and benefit of the defendants and their co-conspirators, and to further the defendants’ fraudulent scheme.

The indictment includes charges of conspiracy to commit bank fraud and wire fraud affecting a financial institution, and substantive bank fraud offenses. The offenses charged in the indictment each carry a statutory maximum sentence of 30 years in prison, a $1 million fine, and mandatory restitution.

Wifredo A. Ferrer, United States Attorney for the Southern District, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Fred W. Gibson, Jr., Acting Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), announced the charges.

Mr. Ferrer commends the investigative efforts of the FBI and FDIC-OIG. The case is being prosecuted by Assistant U.S. Attorney Dwayne E. Williams.

 

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Allison Tussey

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