A spate of civil lawsuits preceded last week?s indictment in Nassau County, New York of eight individuals on charges of grand larceny, money laundering and conspiracy. At least four federal civil suits were filed in the months leading up to the indictment:
On October 12, 2005, Accredited Home Lenders, Inc. filed a civil suit against LaMattina & Associates, Inc. and Joseph LaMattina alleging that defendants acted as closing agent for five transactions on behalf of Accredited and used the closing funds for their own benefit instead of apply them to the transactions. The complaint includes causes of action for conversion, unjust enrichment, breach of fiduciary duty and negligence and seeks damages of no less than $861,414.10.
Credit Suisse First Boston Financial Corporation filed a civil lawsuit on September 14, 2005 against LaMattina & Associates, Inc., Joseph LaMattina and Victory State Bank alleging an apparent fraud scheme by the LaMattina defendants to convert to their own use approximately $795,000 of plaintiff?s funds. The complaint alleges that Credit Suisse wired approximately $795,000 to an account maintained by LaMattina & Associates, Inc. for funding a residential real estate transaction. According to the complaint, LaMattina & Associates, Inc. claimed the funds had not been received despite confirmation by Victory State Bank that the wire had been received. The claims against Victory State Bank seek attachment of any remaining account funds. The complaint includes causes of action for conversion, fraud, unjust enrichment, money had and received.
On August 15, 2005, First Continental Mortgage and Investment Corp. filed a civil lawsuit against LaMattina & Associates, Inc. and Joseph LaMattina alleging that funds wired to LaMattina & Associates in its role as closing agent in three mortgage transactions were not properly disbursed. The complaint includes causes of action for conversion, unjust enrichment, money had and received, negligence and breach of fiduciary duty and seeks damage of not less than $1,545,080.78.
On May 10, 2005, Conestoga Title Insurance Company filed a civil lawsuit against GMC Land Services, Inc., James LaForte, Jr., Richmond Abstract Corp., Joseph LaForte, LaMattina & Associates, Inc. and Joseph LaMattina. Conestoga alleges that it entered into agency agreements with Richmond Abstract Corp and with GMC Land Services, Inc. appointing these parties its non-exclusive agent in connection with issuance of Conestoga title insurance policies for property located in the State of New York. The agreement with Richmond Abstract Corp. was later canceled and the agreement with GMC was terminated according to the complaint. The complaint alleges that, after termination of the contracts, Conestoga was not provided with title insurance files or trust account reconciliation reports and that GMC diverted trust account funds. The complaint includes causes of action for breach of contract, breach of fiduciary duty, conversion, tortuous interference with contract and fraudulent conveyance and seeks damages in an amount to be determined at trial but expected, at the time of filing of the complaint, to be not less than $5,000,000.
Those charged in the state criminal case were:
Joseph W. LaForte, 34, Staten Island, New York and Miami Beach, Florida;
James LaForte, Jr.., 28, Staten Island, New York (brother of Joseph W. LaForte)
Tina LaForte, 56, Staten Island, New York (mother of Joseph W. LaForte and James LaForte, Jr.)
James LaForte, 59, Staten Island; New York (father of Joseph W. LaForte and James LaForte, Jr.)
Tara Gibson, 33, Staten Island, New York and McKinney, Texas (sister of Joseph W. LaForte and James LaForte, Jr.)
Jaime Lynn Guli, 27, Staten Island, New York
Francis Alfieri, 27, of 18 Hillis Street, Staten Island, New York
Michael O?Leary, 29, Staten Island, New York was also charged in a separate felony complaint with money laundering and conspiracy)
According to District Attorney Denis Dillon, “The charges are based on allegations that the defendants conspired to steal over $12 million from various lending institutions by forming a corporation, which appeared to be a law firm. They used that corporation to act as attorneys for banks at mortgage closings and then would launder the proceeds through related entities and back to themselves. The corporation they formed, LaMattina & Associates, Inc. opened a bank account to handle the banks? funds, which was entitled the LaMattina & Associates, Inc., Joseph LaMattina Settlement Trust Account.”
“None of the eight individuals charged are attorneys,” said Dillon. “Instead, James LaForte contacted Joseph LaMattina, a Staten Island attorney and relative and arranged to make him Secretary of the corporation and use his name. No charges have been brought against Mr. LaMattina at this time. The other corporate officers were, Joseph W. LaForte, its first President, followed by Tina LaForte and Tara Caminiti (now Gibson), Vice President.”
“Once the corporation was formed, it made arrangements to represent the banks at mortgage closings,” said Dillon. “They opened an office at 220 Old Country Rd., Mineola, New York where most of the closings took place. The banks would wire the funds into the Joseph LaMattina Settlement Trust Account and LaMattina & Associates, Inc. was then supposed to write checks to either the borrower or on the borrower?s behalf. They then began moving millions back and forth between related entities. Instead they used these fund for their own benefit.”