Contractor Sentenced for Straw Buyer Scheme

Allison Tussey —  June 8, 2012 — Leave a comment

Brian Guimond, 45, Norwich, Connecticut, was sentenced by Senior United States District Judge Alfred V. Covello to 27 months of imprisonment, followed by one year of supervised release, for his participation in an eastern Connecticut mortgage fraud scheme.

According to court documents and statements made in court, from approximately 2004 to 2007, Jose Guzman and others used mortgage brokerage, property management, and home improvement companies to arrange for borrowers to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications. The fraudulent information included information regarding income, assets, employment, rent history, as well as the borrowers’ intention to make the properties their primary residence. The borrowers were compensated for participating in the scheme.

On a number of transactions, Guimond conspired with Guzman and others to sign false employment verification forms representing that borrowers were employed at his company, The Cutting Edge Contracting Inc., a home improvement contractor and landscaping company, with offices in Norwich and New London. On certain mortgage transactions, Guzman and others falsified closing records, including false work invoices from The Cutting Edge, and caused checks to be issued at the closing made payable to The Cutting Edge, from funds provided by the lenders, purportedly to pay for work that had been done on the property prior to the closing when little or no work had been performed.

The checks were converted to cashier’s checks, which were then used as purported down payments from the borrower. Through this scheme, the co-conspirators collected large commissions and fees, and a portion of the funds advanced by the lenders, which were intended to be used to finance the purchase of the properties, were in fact used for the benefit of the co-conspirators and their various companies.

According to previously filed court documents, the government believes that more than 200 fraudulent mortgages were funded through this mortgage fraud scheme, causing more than $9 million in losses to lenders.

As part of his sentence, Judge Covello ordered Guimond to pay restitution in the amount of $7,811,695.44.

As previously reported by Mortgage Fraud Blog, Guimond pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud. Fifteen other individuals, including Jose Guzman, have pleaded guilty to various charges stemming from this scheme. Jose Guzman awaits sentencing.

David B. Fein, United States Attorney for the District of Connecticut, announced the sentence.

This case has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Michael S. McGarry and David T. Huang.

In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service-Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.

To report financial fraud crimes and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.

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Allison Tussey

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