Guilty Plea in Short Sale Conspiracy

Rachel Dollar —  November 19, 2015 — Leave a comment

Dahianara Moran, 40, Methuen, Massachusetts, pleaded guilty to one count of conspiracy to commit bank fraud for to participating in a conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in the Merrimack Valley of Massachusetts.

Moran conspired with others – including a Methuen loan officer and a Haverhill real estate agent who were not identified in the charging document – to defraud various banks via bogus short sales of homes in Haverhill, MassachusettsLawrence, Massachusetts, and Methuen, Massachusetts.

The conspiracy began in approximately August 2007 and continued through June 2010.   As part of the scheme, Moran and her co-conspirators submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales – and thereby to release the purported sellers from their unpaid mortgage debts – while simultaneously inducing the purported buyers’ banks to provide financing for the deals.  In fact, the purported sellers simply stayed in the homes, with their debt substantially reduced.  In some cases, the conspirators then re-sold the properties in genuine arms-length transactions for a profit.  Meanwhile, the short-selling banks lost millions of dollars.

As part of the conspiracy:

  • The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties, when in fact, the transactions were not arms-length, and the sellers retained control of (and frequently continued to live in) the properties after the sale. For example, Moran purported to sell two properties she owned to third parties who were, in fact, her close relatives, while actually maintaining control of both properties.
  • The conspirators submitted phony earnings statements that Moran prepared in support of loan applications that they submitted to banks in order to obtain financing for the purported sales.
  • The conspirators submitted phony HUD-1 Settlement Statements to banks, as well as to the Federal Housing Administration, that did not accurately reflect the disbursement of funds in the transactions. (A HUD-1 Settlement Statement is a standard form, developed by the U.S. Department of Housing and Urban Development, that is used to document the flow of funds in real estate transactions.HUD-1 Settlement Statements are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)

U.S. District Court Judge Rya W. Zobel scheduled sentencing for February 17, 2016.

Hayacinth Bellerose, real estate attorney, Dunstable, Massachusetts, pleaded guilty last month to the same charge and is scheduled to be sentenced on February 4, 2016.

The charge of conspiracy to commit bank fraud provides for a sentence of no greater than 30 years in prison, three years of supervised release and a fine of $1 million.

United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, the Special Inspector General of the Troubled Asset Relief Program, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.

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Rachel Dollar

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