Criminal Complaint Filed in Short Sale Transaction

Rachel Dollar —  August 31, 2016 — Leave a comment

Naum Morgovsky was named in a criminal complaint filed in the United States District Court for the Northern District of California on August 24, 2016, alleging that he committed bank fraud in violation of 18 U.S.C. Section 1344.

The Affidavit in Support of the Criminal Complaint alleges that, in 2009 and 2010, Morgovsky used the name Gary Piper as a straw purchaser in the short sale of two condominiums in Hawaii for the benefit of his associate Mark Migdal who owned the properties and owed money on mortgages. Gary Piper died in 1969 at the age of 16.  Morgovsky transacted business, obtained false identification and opened bank accounts in the name of Gary Piper.

The Affidavit further alleges that, after the sale of the properties to Morgovsky, they remained under the control of Migdal,  For intstance, Midghal continued to collect the rent on the properties and transferred money to the Gary Piper account each month preceding the payment of Homeowner’s Association payments on the condominiums.  In 2016, Morgovsky transferred the properties to Migdal’s wife, using her maiden name.  The escrow instructions in one transaction stated “There will be no funds exchanged between the parties in connection with this escrow transaction.  Said consideration amount will be reimbursed to the buyer in full satisfaction of an unsecured note between the parties.”  The escrow instructions in the other transaction stated “Property is sold at the same price as it was purchased to seller a prom note.”    Four months later, Migdal’s wife transferred the properties to the Migdal family trust.

The conduct underlying the complaint was discovered by the SA during the investigation of Morgovsky and his wife for the unlawful export of night vision equipment that is controlled for export pursuant to the United States Munitions List and Commerce Control LiIst.

Morgovsky’s arraignment is scheduled for September 19, 2016.

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Rachel Dollar

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