Man Sentenced for Lying to Obtain Residential and Commercial Loans

Allison Tussey —  October 30, 2013 — 2 Comments

Joseph N. Gagliano, 45, Phoenix, Arizona, was sentenced to 30 months in prison and ordered to pay $2,903,010.26 in restitution by U.S. District Court Judge G. Murray Snow.

The case against Gagliano was based on an investigation by the SBA-OIG and FBI.

Between June 2006 and July 2010, Gagliano sought mortgage loans for residential real estate located in Scottsdale and Phoenix, Arizona, as well as a SBA loan for a car wash located in Chandler.

He submitted loan applications that falsely misrepresented that his father, who has the same name, was the actual borrower, and also made misrepresentations concerning his income, assets, liabilities and intent to occupy the residential properties as a primary residence. Gagliano also forged signatures, altered bank statements and submitted bogus lease agreements.

The scheme to defraud resulted in nearly $3 million in losses to the Small Business Administration, Wells Fargo Bank, and JP Morgan Chase.

The investigation in this case was conducted by the Small Business Administration-Office of Inspector General and the Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp Assistant U.S. Attorney, District of Arizona, Phoenix.

First Assistant U.S. Attorney Elizabeth A. Strange highlighted the significance of this sentence: “These loans should have gone to qualified small business owners in need of financial support. The defendant’s fraudulent conduct denied small business owners the opportunity to obtain access to capital in a difficult economy, and the United States Attorney’s Office will continue to investigate and prosecute such borrowers who obtain SBA loans through fraud.”

“Corrupt borrowers who attempt to defraud SBA=s loan programs will be aggressively pursued by our office,” said SBA Inspector General Peggy E. Gustafson. “This successful investigation and prison sentence demonstrates our commitment to insure that SBA loans are only disbursed to deserving small businesses helping to grow our economy. We appreciate the leadership of the U.S. Attorney=s Office and the support of the FBI to bring this indictment forward.”

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2 responses to Man Sentenced for Lying to Obtain Residential and Commercial Loans

  1. Judith A. Fleming October 31, 2013 at 10:56 am

    This makes me sick because I was just a victim of Fraud from Carl Millberg of Interstate Law Group In Las Vegas, NV. This man made calls to people that he knew needed a new Modification. How he obtained this information no one knows. He contacted my Twin Sister who was looking for a Loan Modification and also knew that my fairly new Loan Modification was suggested to me as not being legal. To make a very long story short he told me that my Modification was not worth the paper it was written on and convinced me that he would do another for me that I would love. He worked with Chase on this for over one year and all of this time I was not to pay my Mortgage payment. I knew this to be true because I went through this before. As this turned out, after a year went by he dropped my Sister and I with absolutely nothing except for being $5,000 less. My home then went into Foreclosure. I called HUD right away God bless them. They worked with me for several months and managed to save my home as of yesterday. It cost me $17,000. to pay Chase for all of the past due payments. I was extremely lucky that mine turned out very well, however my Twin Sister is losing her home because she had to come up with $27,000 and no way does she have this kind of money.

    All of this makes me sick that anyone could take advantage of innocent people. This man is now doing the same thing under a new name and getting away with it. They closed down 4 of Interstate Law Groups all connected. Carl Millberg is now advertising his new business on the internet, if you can believe it.

    How do we victims cope with this knowing that the Officials know who they are but the Government does not have the right to arrest them. This is not over by any means, my Sister and I are going to sue him and there is a Police in Las Vegas who works in the Fraud Dept. who is helping me get him. Do you have any suggestions for me? I could use all the help I can get. The FTC has been wonderful to me and is still working on this case. He was the one that closed down his 4 companies. They are wonderful to work with. As of yesterday with new information that the FTC had not heard of yet will help them get closer to closing this man down. This by the way is about the fifth or sixth company he has created to steal money from desperate hard working people.

    From a victim of Fraud

  2. I am sorry to read YET another story of somebody having trusted a person or company to help them in a modification and get screwed. I AM myself, a modification specialist; a VERY good one. I worry about my clients like they are my family. Most of them have come to me from others I helped. It is so unfortunate that I KNOW I am surely not THE ONLY one who is good at my job out there. The thing is that our job is that much harder because of people like the man you wrote about who do not care, and prey on peoples desperation. It makes me sick and makes my job which essentially deserves much respect, have a very bad name because of the things they do. I mean, WHO DOES THIS? Who victimizes people who are already down??? The bad part that most will never realize is that…the borrowers get victimized on all sides when that happens- by the fraudulent “specialist third party” AND AND AND MOST OF ALL the LENDER who I cant even BEGIN to tell you what kind of foul play I have seen from almost ALL OF THEM – I must say though I am amazed you eventually got the help where you did in the end after calling FHA- THAT was a miracle.
    My heart goes out to all you who get hurt by people/companys like this. There is a company in florida who is telling people to stop paying their mortgage and having them sign over thousands before disapearing….I know this because my father goes to church with a large handful of these victimized homeowners and one by one they have been coming to me like a referral chain reaction for help- I am in New york, I cant even help them under the law firm name I work for so I do them on my own in my own time- doing a modification processing job with no backing is tedious but, I cant just turn them away they are losing their homes and I am the last hope for them after denials and fraudluent practices everywhere they turn- I cannot on good conciense turn them away KNOWING what I know and having the experience I have. The relatively small fee I charge is nothing in comparison to the amount of fight I put into doing what I do- NEVERTHELESS, I stand in the shadow of a stigma, despite my good intentions because of people like those mentioned in your comment at the end of the day—–PEOPLE LISTEN ME do not sign complicated contracts with monthly payments or huge fees that are to be charged “until the finish” of the modification because your giving permission for indefinate charges of fees if they never finish the job… and do yourselfs a favor for your own protection (this is the best advice I can give) IF you pay a “fee” or retainer to someone or some company, start small and watch closely -put down 1/2 or a 1/3 payment (be adament about this do not let them tell you otherwise) and then TAKE THE TIME to call the lender and see if that person/company submitted an authorization to represent you, ask the bank to read the notes and see what activity has taken place on your behalf and do not pay anything else until the “package” for modification is submitted to the lender. Ask your hired third party for a copy package with a confirmation of reciept by the lender for your records, if they can provide all of this, chances are they are good and your safe. When you see that the person you hired Is putting work into your modification, THEN you can show the trust. There are great salespeople out there who want to take your money and can fool anyone…so dont accept just words as gold, look for actions because there are also great processors out there who will show it as they work. If possible meet face to face with the person or company and check them out as well.
    I have to bend over backwards for my clients to trust me and that is how I do it by proving my work- I SHOW THEM. Look- dont expect free “help” services to do what someone like myself can do they are volunteers and only know so much- I cannot work for free, of course but when hiring a processor or company who is actually good it is SO WORTH IT, just enter with caution- Do they call the lender often? Do they always return your calls? do they request documents and sent you confirmations of submission ?? YOU SEE when I am finished with somebodys case regardless of the outcome, they always walk away KNOWING the best job possible was done for them and the fee paid was more than worth it.
    ONE MORE THING- DO NOT PURPOSLEY GO DELINQUENT ON YOUR MORTGAGE. I cant tell you how many people tell me they were instructed to do that before coming to me. It is not necessary, I have gotten MANY modification offers on CURRENT loans, by just doing it correctly.
    Good luck to all of you out there, I have decided to exit this business unfortunatley so I am no longer accepting new cases- I fear for my future health in this chaotic industry and I want to get out with my great track record before my heart breaks watching this insanity – Be carefull and best of luck to you all

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