Loan Modification Fraud Ringleader Sentenced to 11 Years in Prison

Allison Tussey —  December 10, 2014 — 1 Comment

Jason Vitulano, 39, Boca Raton, Florida, was sentenced by U.S. District Judge Kenneth Marra to 132 months in prison, to be followed by three years of supervised release, for  operating boiler rooms that collected advance fees from distressed homeowners purportedly in exchange for obtaining loan modifications for the homeowners.

Vitulano was also ordered to pay $5.9 million in restitution. Vitulano previously pled guilty to charges of conspiracy to commit mail fraud and wire fraud, and mail fraud, in violation of Title 18, United States Code, Sections 1349 and 1341.

According to the indictment and other documents filed in the case, between September 2008 and August 2009, the defendants operated boiler rooms that collected advance fees from distressed homeowners purportedly in exchange for obtaining loan modifications for the homeowners which were, with few exceptions, never provided.   All ten defendants charged in this case have pled guilty to the charges, which involved a scheme to bilk thousands of homeowners who were struggling to make their mortgage payments. Defendant Jeffrey Taylor is set for sentencing on January 23, 2015 at 10:30 am.  The remaining co-defendants received sentences ranging from 21 months to 72 months in prison.

The indictment alleges that Jason Vitulano was the organizer and operator of FHA All Day.com, Inc. and two other companies, Housing Assistance Law Center, Inc. and Safety Financial Corp., which operated the boiler rooms in Boca Raton and later in Deerfield Beach. According to the indictment and the factual proffers submitted in support of the guilty pleas, Robert Bacon was an operations manager who wrote and edited sales scripts, while the other eight defendants served as team managers of four to eight telemarketers who made thousands of phone calls to homeowners behind on their mortgage payments.

As alleged in the indictment, the defendants made false statements to the homeowners including telling homeowners they had already been approved or pre-approved for a loan modification that would save the homeowner a specific amount off their mortgage payment, reducing the interest rate and often the principal balance on the mortgage loan. The defendants, according to the indictment, routinely told customers that they had been approved by an “underwriter” and that they had a team of “expert attorneys” who would finalize the loan modifications.

The indictment further alleges that the defendants targeted homeowners across the country who were facing foreclosure, falsely telling them that the company would stop the foreclosure process and that homeowners could stop making mortgage payments while they waited for the company to finalize their loan modifications. FHA All Day, as alleged in the indictment, moved its offices and changed the corporate name several times to avoid law enforcement scrutiny and to hamper consumer complaints. Through the use of these and other false representations, the defendants, according to the indictment, induced over 2,000 distressed homeowners to pay up front fees totaling more than seven million dollars to the defendants.

Jason Vitulano was previously charged and pled guilty in federal court in two separate mortgage fraud cases, one in Palm Beach County in which he was sentenced to 63 months in prison (Case No. 09-80156-CR-DMM), and one in Pensacola, Florida in which he was sentenced to 77 months in prison (Case No. 13-CR-61-MCR), to be served consecutively to the Palm Beach case.  In sentencing Vitulano on Friday, Judge Marra specifically ordered that the 132-month sentence on the 2013 case run concurrent with the 77-month sentence Vitulano is currently serving.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, and Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, announce the sentence.

Mr. Ferrer commended the investigative efforts of USSS and USPIS. This case is being prosecuted by Assistant U.S. Attorney Lauren Jorgensen.

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