Accountant Admits to Defrauding Mortgage Lenders

admin —  January 22, 2010 — Leave a comment

Jose I. Flores, 50, Stamford, Connecticut, waived his right to indictment and pleaded guilty to one count of conspiracy to commit wire fraud stemming from his participation in a mortgage fraud scheme.

In pleading guilty, Flores, an accountant, admitted that from approximately 2004 to 2008, he conspired with others to defraud mortgage lenders by causing so-called “accountant letters,” which contained materially false information about the loan applicant, to be submitted to lending institutions on behalf of applicants for residential real estate mortgages.

According to court documents and statements made in court, Flores, who did business as a tax preparer and accountant under the name Harvard Financial Services, Stamford, Connecticut, was approached by the owner of a real estate and mortgage broker, also in Stamford, Connecticut, to create fraudulent accountant letters. Under a mortgage program offered at the time by certain mortgage lenders, mortgage applicants could apply for a so-called “stated income loan,” which did not require income verification. Through this program, lenders required a letter from the applicant’s accountant or tax preparer verifying, among other things, the applicant’s employment status, particularly for applicants claiming to be self-employed. Flores agreed to write accountant letters containing false information for the owner of the mortgage brokerage and its loan officers knowing that the letters would be used in connection with loan applications to mortgage lenders. Over the period of several years, Flores was paid up to $100 per letter by the mortgage brokerage to provide numerous false accountant letters.

United States District Judge Christopher F. Droney has scheduled sentencing for April 9, 2010, at which time Flores faces a maximum term of imprisonment of five years and a maximum fine of $250,000, or twice the gross gain or loss from the offense.

This matter is being investigated by the Connecticut Mortgage Fraud Task Force and is being prosecuted by Assistant United States Attorney Eric J. Glover. The Connecticut Attorney General’s Office provided valuable assistance to the investigation.

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