Nathan Shane Wolf, 44, Charlotte, North Carolina and John Wayne Perry, Jr., 34, Charlotte, North Carolina, and Purnell Wood, 44, were sentenced on federal racketeering charges in connection with their roles in the Operation Wax House fraud scheme.

Wolf, a licensed real estate agent, was sentenced to seven years in prison followed by three years of supervised release. Wolf was convicted by a jury in October 2013. According to trial evidence, Wolf was a participant in the enterprise’s mortgage fraud operations, accounting for over $13 million in fraudulently-obtained loans, with losses of more than $7 million. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loans from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. Trial evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000. According to the sentencing hearing, Wolf received more than $200,000 in commissions on the fraudulent transactions, which represented the vast majority of his income during the years he was committing fraud. Continue Reading…

FDLE agent gets five-day suspension, already served, in mortgage case

Kathy Smith, a Key West-based Florida Department of Law Enforcement agent who had been suspended with pay since November 2014 following allegations of mortgage fraud, received a five-day suspension without pay from Aug. 10 to 14 after her agency completed its internal affairs investigation on the matter.

“The internal investigation is closed, the outcome was a sustained violation of member conduct and unbecoming conduct,” FDLE spokeswoman Molly Best said.

Michael P. Barbour, a southern Alabama business man pled guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.  Barbour admitted to conspiring to fraudulently acquire title to foreclosed properties at artificially low prices by agreeing with others not to bid against each other at public foreclosure auctions in southern Alabama.

According to documents filed with the court, from 2003 until 2010, Barbour conspired with other potential bidders for foreclosed properties to designate one person to bid at certain public foreclosure auctions.  Once the designated bidder won the property at the public auction, the conspirators held a secret, second auction open only to members of the conspiracy where they paid each other off.  As a result of these crimes, homeowners and banks received less than competitive prices for the properties.  Continue Reading…

George Bussanich Sr., 56, Park Ridge, New Jersey, and his son, George Bussanich Jr., 35, Upper Saddle River, New Jersey, were arrested for engaging in a short sale buy-back scheme that used straw buyers and short sales on two Bergen County, New Jersey, properties to defraud mortgage lenders out of hundreds of thousands of dollar.  Each were charged by indictment with one count of conspiracy to commit bank fraud and two counts of bank fraud. They are scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.   Continue Reading…

Lawrence Foster, 50, Miami Beach, Florida, was sentenced to 152 months’ imprisonment for conspiring to commit wire fraud and committing substantive counts of wire fraud, and was ordered to pay over $8 million in restitution.  The Court also ordered the forfeiture of over $1 million that was seized by federal law enforcement.

Foster was convicted of all counts after a jury trial for his role in defrauding over 100 investors of over $8 million dollars.  Foster fraudulently promised investors that his company, Paradise is Mine, was developing land in the Bahamas. Continue Reading…

Anika N. Greene, 42, Bronx, New York, was convicted by a federal jury on charges of conspiracy to commit bank and wire fraud, bank fraud, wire fraud, access device fraud and three counts of aggravated identity theft.

Green was charged in a superseding indicted on July 15, 2014. According to court records and evidence presented at trial, Greene and three other individuals, Jeffrey Washington, Alice Howard, and Catya J. Craig, burglarized Wells Fargo mortgage offices throughout New York, New Jersey, Connecticut and Maryland in 2012 and 2013. The defendants stole over 1,800 mortgage files that were then used in a variety of bank customer impersonation and retail credit fraud schemes, targeting various banks and retailers. Washington recruited individuals to go into banks, impersonate customers and remove funds via setting up business accounts and transferring funds from the accounts of bank customers. Washington and other defendants, including Greene, traveled from New York to the Eastern District of Virginia on multiple occasions throughout 2012 and 2013. Continue Reading…

Daniel J. Flynn, III, 52, Milton, Massachusetts, was arrested and charged in U.S. District in Boston with wire fraud.  According to the criminal complaint, Flynn defrauded investors of millions in a real estate investment scheme that began in at least 2007.

The complaint details several aspects of the alleged scheme, including that Flynn falsified the value of his real estate investment fund by creating fraudulent promissory notes purportedly worth millions and representing to investors that they were legitimate debts that were owed to Flynn’s real estate investment fund.  Second, the complaint alleges that Flynn repeatedly induced investors to loan him money to purchase specific pieces of property that, in some cases, Flynn already owned.  It is further alleged that Flynn often used investor’s money to pay his personal debts and to repay prior investors.  Once investors uncovered Flynn’s fraudulent activities, Flynn changed the name of his business and created similar entities through the names of third parties in an effort to conceal his fraudulent activities.

The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of up to $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement.  The case is being prosecuted by Assistant U.S. Attorney Neil J. Gallagher, Jr. of Ortiz’s Economic Crimes Unit.

Selim Zherka, 47, businessman, Somers, New York, pled guilty to conspiring to make false statements to a bank in order to receive millions of dollars in loans and to file materially false tax returns with the IRS.  As part of his plea agreement, Zherka agreed to forfeit $5.23 million.

According to the Superseding Information filed in White Plains federal court and other court documents filed in the case:  From December 2005 through the present, Zherka conspired with others to obtain $63.5 million in loans from Sovereign Bank (now Santander), for the purchase and/or refinancing of apartment house complexes in Tennessee by lying about the purchase price of the real estate he was acquiring and the amount of the down payment he was making toward the purchase in question. Continue Reading…

A father and son schemed with a Chicago attorney and a Lincolnwood businessman to sell $2.9 million in phony mortgages to more than a dozen duped investors, according to a federal indictment.

Albert Rossini, 67, the owner of Devon Street Investments Ltd., Lincolnwood, Illinois plotted with Babajan Khoshabe, 74, Chicago, Illinois, and Khoshabe’s son, Anthony Khoshabe, 33, Skokie, Illinois, to fraudulently induce at least 15 victims into purchasing purported mortgage notes on apartment buildings in foreclosure, according to the indictment. The trio promised that investors would receive rental income from occupants of the buildings, followed by title to the properties at the conclusion of the foreclosure process, the indictment states. In reality, it was a ponzi scheme.  the trio did not own the mortgage notes, and instead used the victims’ funds to make Ponzi-type payments to other investors and pocket the rest, according to the indictment. Continue Reading…

ACI’s 18th Residential Mortgage Litigation & Regulatory Enforcement conference will be held on September 17-18, 2015 in Dallas, Texas.

I am co-chairing the conference, along with Andrew Stutzman, and I will be speaking on a panel entitled:

Mortgage Servicing Challenges: Fallout from the Servicing Rules, Issues Arising from Mortgage Servicing Transfers, Litigation and Enforcement Concerns, Servicer Liability Under the FDCPA and the FCRA, Determining and Implementing Best Practices, Defending Against Class Actions and New and Innovative Borrower Claims, and More

My co-panelists are Jon Hubbard, Michelle Canter and Kara Czanik.

The agenda can be viewed here:  http://americanconference.com/content/download-content/pdf/marketing/804L16_S.pdf

If you are interested in attending, you can contact Lisa Laratro at 212-352-3220 ex. 5522 or l.laratro@americanconference.com  If you tell Lisa that you were referred by Rachel Dollar, you will receive a discount on the conference rate.  In order to receive the discount, you need to call Lisa by tomorrow and let her know you will be attending.

If you would like more information on the conference and agenda, click the following link:

http://americanconference.com/content/download-content/pdf/marketing/804L16_S.pdf