Archives For California

Mark F. Friend, 62, Stockton, California was sentenced by U.S. District Judge Garland E. Burrell Jr. to two years and four months in prison and ordered to pay $1,889,379 in restitution for conspiracy to commit bank fraud in relation to a mortgage fraud scheme.

According to court documents, between September 2006 and March 2007, while working for National City Mortgage, then a division of National City Bank, in Stockton, Friend arranged loans for borrowers that contained numerous falsehoods. He submitted false loan applications and other documents, and he made down payments on behalf of borrowers who did not have enough money, and then was repaid out of escrow after the loans were funded. The borrowers eventually stopped making payments on the loans, and National City Bank and other entities sustained losses amounting to $1,889,379.

Judge Burrell ordered Friend to self-surrender and begin his incarceration on January 13, 2017.

The plea was announced by Acting U.S. Attorney Phillip A. Talbert.  The case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney John K. Vincent prosecuted the case.

Aleksandr Kovalev, 53, Rocklin, California, pleaded guilty to wire fraud involving financial institutions in connection with a mortgage fraud scheme involving the purchase of at least 31 properties.

According to court documents, Kovalev was in the business of developing, building and selling property in Sacramento, Fairfield and Stockton, California. As the real estate market began to weaken, Kovalev offered to make incentive payments to purchasers, through “down payment assistance” or by making other payments to the buyers to be used in whatever manner the buyers wanted. Most of the payments to the buyers were out of escrow and were often paid through intermediaries, originating in Kovalev’s bank account. These payments were not disclosed to the lenders, and had the effect of substantially reducing the actual sales price below that was represented to the lenders. At least 31 properties were involved in Kovalev’s mortgage fraud scheme with substantial losses to the lenders.

To date, five co-defendants have pleaded guilty and have been sentenced: Jannice Riddick, 34, Sacramento, California (two years and 11 months in prison); Florence Francisco, 65, Houston, Texas (one year in prison); Adil Qayyum, 34, Rosele, Illinois (three years of probation); Elsie Pamela Fuller, 41, Richmond, California (one year and nine months in prison); and Leona Yeargin, 49, San Pablo, California (18 months in prison). Charges are pending against co-defendant Arthur Menefee, 45, Stockton, California.

Two other defendants were charged separately for their involvement in the scheme. Valeriy Vasilevitsky, charged in U.S. v. Vasilevitsky, 2:12-cr-344 KJM, and Ruth Willis, charged in U.S. v. Willis, 2:13-cr-228 MCE, have also pleaded guilty and await sentencing.

Kovalev is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on February 9, 2017. Kovalev faces a maximum statutory penalty of 30 years in prison and a fine of $1 million or twice the gross loss or gain.

This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney Todd A. Pickles is prosecuting the case. The guilty plea was announced by Acting U.S. Attorney Phillip A. Talbert.

Michelle Lefaoseu, also known as “Michelle Bennett,” “Michelle Lee” and “Michelle Page,” 42, Huntington Beach, California, was sentenced to 12 months and one day of imprisonment, followed by one year of supervised release, for participating in an extensive mortgage loan modification scheme.

According to court documents and statements made in court, Lefaoseu worked at a California-based company that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees. The company did business, at various times, as “First Choice Financial Group, Inc.,” “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” and “Nation Star Financial.”

Aria Maleki presided over the entire structure of this scheme, and Lefaoseu was head of the processing department. Acting as representatives of the above-named entities, members of Maleki’s sales team cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. Homeowners were charged fees that typically ranged from approximately $2,500 to $4,300 for the services. To induce homeowners to pay these fees, scheme participants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants’ company, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. They also directed homeowners to mail their checks to addresses and mail boxes that Maleki and others had set up in states other than California.

After members of the sales team fraudulently induced homeowners to pay for the company’s services, the homeowners’ files were transferred to Lefaoseu and the junior processors working under her supervision. Lefaoseu was fully aware of her co-workers’ lies and, during her contact with victims, repeatedly helped to cover up those lies.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

On January 21, 2016, a grand jury in New Haven returned an indictment charging Maleki, Lefaoseu and five other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on January 26.

On July 11, 2016, Lefaoseu pleaded guilty to one count of misprision of a felony.

On March 22, 2016, Maleki pleaded guilty to one count of conspiracy to commit mail and wire fraud and, on July 18, 2016, he was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

The other five defendants, all of whom were members of Maleki’s sales team, pleaded guilty and were sentenced to prison terms ranging from 18 months to 58 months.

All seven defendants have been ordered to pay restitution in the amount of $2,390,496.59.

U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, sentenced Lefaoseu and Deirdre M. Daly, United States Attorney for the District of Connecticut made the announcement. The matter was investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case was prosecuted by Assistant U.S. Attorney Avi M.

Yun Soon Matsuba, aka Dorothy Matsuba, 65, Chatsworth, California; Thomas Matsuba, 64, Chatsworth, California; Jane Matsuba Garcia, 40, Chatsworth, California; and Jamie Matsuba, 31, Chatsworth, California, and Young Park, 53, Koreatown, California, were indicted for their alleged participation in a conspiracy to defraud banks and homeowners and were each charged with one count of conspiracy to commit wire fraud, make false statements and commit identity theft.  In addition, the 18-count indictment charges Dorothy Matsuba with five counts of wire fraud, five counts of making false statements and six counts of aggravated identity theft; Jane Matsuba Garcia with one count of wire fraud, two counts of making false statements and one count of aggravated identify theft; and Jamie Matsuba with one count of making a false statement.

Dorothy Matsuba is the alleged architect of a $30 million mortgage relief fraud scheme and the other four defendants are former employees of a purported mortgage relief company.

Dorothy Matsuba, Thomas Matsuba, Jane Matsuba Garcia and Jamie Matsuba were all arrested; Park remains a fugitive.  Thomas Matsuba is Dorothy Matsuba’s husband and Jane Matsuba Garcia and Jamie Matsuba are Dorothy Matsuba’s daughters.  Young Park is Dorothy Matsuba’s brother.

The indictment alleges that from 2005 to 2014, the defendants operated an interlocking web of companies, primarily under the names of Ownership Management Service LLC and Trust Holding Service LLC, which purported to help homeowners obtain relief from high mortgage debt through short sales, in which lenders agree to sell a mortgaged property for less than the amount owed on the mortgage.  In a scheme to defraud both the banks and the homeowners the defendants allegedly convinced homeowners to deed their property to trusts set up and controlled by the Matsubas and also promised to pay their mortgages while negotiating with banks to short sell those properties.  In the interim, the homeowners either remained in their properties or were relocated to another Matsuba-controlled property.  Instead of performing short sales as promised, Dorothy Matsuba and the other defendants failed to make mortgage payments and submitted false and fraudulent short sale purchase offers to the banks in an effort to delay foreclosure and maximize the time period over which the Matsubas could collect rent from the homeowners and other third parties placed in the properties by the Matsubas, the indictment alleges.  The Matsubas also routinely forged signatures, used false and stolen identities and filed fraudulent bankruptcy petitions—all in a scheme to delay foreclosure and maximize their profits at the expense of the homeowners and banks, the indictment alleges.

The scheme allegedly netted the defendants more than $30 million in rent during the conspiracy period.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Division, Acting Special Agent in Charge Charge Anthony J. Orlando of the Internal Revenue Service-Criminal Investigation (IRS-CI) Los Angeles Field Office, Special Agent in Charge Leslie P. DeMarco of the Federal Housing Finance Agency-Office of Inspector General’s (FHFA-OIG) Western Region and Sheriff Jim McDonnell of the Los Angeles County Sheriff’s Department made the announcement.

The FBI’s Los Angeles Division, IRS-CI’s Los Angeles Field Office, FHFA-OIG’s Western Region and the Los Angeles County Sheriff’s Department’s Real Estate Fraud Unit investigated the case.  Trial Attorney Niall O’Donnell and Senior Litigation Counsel David A. Bybee of the Criminal Division’s Fraud Section are prosecuting the case.  Senior Trial Attorney Nicholas Acker previously worked on the investigation.

Daniel Deaibes was sentenced today to 24 months for his role in a scheme to steal title to Southern California homes and then “sell” the properties to unsuspecting buyers – before the buyers realized who the true owners were.

From September 2012 through their arrest in November 2014, Deaibes and his co-conspirators, including co-defendants Mazen Alzoubi and Mohamed Daoud, fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million that actually never belonged to them. On at least 10 occasions, they were successful—earning illicit proceeds of nearly $2.2 million.

Deaibes pleaded guilty in March 2015 to participating in the fraud and was sentenced by U.S. District Judge Cynthia Bashant. As part of this plea, Deaibes admitted that he used aliases to deceive escrow and title officers into believing that he was “John Moran,” and that he was the true owner of property that was being marketed for sale. In fact, “John Moran” did not exist, and Deaibes and his co-conspirators planned to fraudulently sell the properties, divert the proceeds to their own bank accounts, and then quickly disburse the money overseas.  On at least three occasions, Deaibes, posing as “Moran” and presenting a fake driver’s license, appeared before notaries to sign title documents and property deeds.

To make it appear that they owned these properties, the co-conspirators generated forged deeds that made it appear the true property owner had sold his or her home to a sham real estate “investment” business the co-conspirators controlled. They forged the true owners’ signatures on the deeds, and used forged notary stamps to make them appear legitimate. In reality, though, the true owners were entirely unaware of the pretend sales. Once the fraudulent documents were recorded in the chain of title, Alzoubi (using aliases and stolen identities) listed the properties for sale, posing to buyers, escrow companies, and title officers as the new owner.  In this way, the co-conspirators collected all the proceeds of the sale, and the true owners were left with nothing.

Alzoubi, the ringleader of the fraudulent scheme, assumed multiple fake identities to keep the scheme going.  He also posed as real people, pretending on one occasion that he was an attorney for one of the true owners.  (Unbeknownst to Alzoubi at the time, he was talking to an undercover federal agent.)  As a result of his greater role in the scheme, Alzoubi was charged with, and in January 2016 pleaded guilty to, aggravated identity theft, which carries a mandatory sentence of two years in prison in addition to his sentence for the fraud and money laundering.  His sentencing is scheduled for November 7, 2016, at 9:00 am, before Judge Bashant.

Mohamed Daoud also pleaded guilty, in July 2015, admitting that he helped Alzoubi launder the proceeds of the scheme. They used Daoud’s company, “Norway LLC,” to pretend to acquire title to some of the properties. Daoud received approximately $270,000 in proceeds. In December 2015, before he was sentenced, Daoud fled the country and is now a fugitive.

Most of the properties the co-conspirators “sold” were post-foreclosure properties owned by banks or institutions such as Fannie Mae and Freddie Mac

Schemes like this one undermine the public’s confidence in their most personal and important investment, their homes,” said U.S. Attorney Laura Duffy. “I am committed to prosecuting people who continue to prey on the victims of the devastating mortgage meltdown, and sending those criminals to prison.”

This scheme was designed to literally rip home ownership right out of the hands of innocent victims, and for those victims the costs were far greater than a title to a house,” said Leslie P. DeMarco, Special Agent in Charge, Western Region. “This scheme is callous and the perpetrators deserve the punishment set out for them. FHFA-OIG remains committed to our relentless pursuit of individuals who try to profit from the aftermath of the housing crisis.”

Fraud targeting a family’s home, the heart of a family’s financial investment, has a ripple effect through our nation’s economy,” said FBI Special Agent in Charge Eric S. Birnbaum.  “The FBI is committed to investigate and uncover schemes by those who defraud homeowners.”

In addition to his jail sentence, Deaibes was ordered to pay $1,819,591 in restitution to the victims of the fraud.

DEFENDANT:

Daniel Deaibes, 14CR3325-BAS                 Age: 38           Rancho Cucamonga, CA     

COUNT ONE: Mail fraud, in violation of 18 U.S.C. § 1341

Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.

CO-DEFENDANTS:

Mazen Alzoubi, 14CR3325-BAS                 Age: 33           Rancho Cucamonga, CA     

COUNT ONE: Conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349.

Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution, and forfeiture.

COUNT TWO: Mail fraud, in violation of 18 U.S.C. § 1341.

Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.

COUNTS THREE AND FOUR: Aggravated identity theft, in violation of 18 U.S.C. § 1028A.

Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.

COUNT FIVE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h).

Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.

Mohamed Daoud, 14CR3326-BAS             Age: 53           Norway

COUNT ONE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h)

Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.

AGENCIES

Federal Housing Finance Agency – Office of Inspector General

Federal Bureau of Investigation

Lillian Marquez, 41, Stockton, California was sentenced by U.S. District Judge John A. Mendez to three years and one month in prison for conspiring to commit mortgage fraud.

Marquez pleaded guilty on June 14, 2016. On September 20, 2016, co-defendant Michael Keatts, 59, Stockton, California was also sentenced to three years and one month in prison for his role in the conspiracy. Both Marquez and Keatts were ordered to pay $193,134 in restitution to financial institutions harmed by their scheme.

According to court documents, from February of 2006, through at least August of 2012, Marquez and Keatts operated Colonial Home and Business Services in Stockton, California. Both defendants were licensed real estate agents who assisted clients in purchasing and selling homes. They both participated in supplying false information to mortgage lending institutions indicating that clients were employed by various businesses that the defendants set up and controlled. In fact, these clients were not employed by those businesses and their actual income from their true employment was far less than what was represented to lending institutions. To support these false claims, the defendants created and submitted fraudulent paystubs and tax documents falsely stating that their clients were so employed.

In addition, both defendants engaged in short sale fraud, in which they assisted clients facing default on their current loans to arrange for short sales of their properties. Unbeknownst to the lending institutions, the defendants arranged for the properties to be sold to straw buyers. The original owners would remain in the properties, and enjoy the benefits of the new loans that the lenders assumed were made to other individuals.

Acting U.S. Attorney Phillip A. Talbert announced the sentence.  The case was the product of an investigation by the Federal Bureau of Investigation and the Office of the Inspector General for the Department of Housing and Urban Development. Assistant United States Attorney Philip Ferrari prosecuted the case.

Kowit Yuktanon, also known as “Eric Cannon” and “Aaron Brock,” 32, Huntington Beach, California, and Cuong Huy King, also known as “James Nolan” and “Jimmy“, 32, Westminster, California, have each been sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, to 18 months of imprisonment, followed by one year of supervised release, for participating in an extensive mortgage loan modification scheme.  Judge Underhill also ordered both defendants to pay restitution in the amount of $2,390,496.59.

According to court documents and statements made in court, Yuktanon and King worked at a California-based company that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees.  The company did business, at various times, as “First Choice Financial Group, Inc.,”  “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” and “Nation Star Financial.”

Aria Maleki presided over the entire structure of this scheme, and Yuktanon and King were junior members of the sales team.  Acting as representatives of the above-named entities, Yuktanon, King and others cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans.  The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services.  To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request.  Few homeowners ever received any type of mortgage loan modification through the defendants’ company, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection.  The defendants also directed homeowners to mail their checks to addresses and mail boxes that Maleki and others had set up in states other than California.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

On January 21, 2016, a grand jury in New Haven returned an indictment charging Maleki, Yuktanon, King and four other California residents with conspiracy and fraud offenses related to this scheme.  The defendants were arrested on January 26.

YUKATANON and KING each pleaded guilty to one count of misprision of a felony.

Maleki pleaded guilty to one count of conspiracy to commit mail and wire fraud and, on July 18, 2016, he was sentenced to 112 months of imprisonment.  He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

The sentence was announced by Deirdre M. Daly, United States Attorney for the District of Connecticut.  The matter was been investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.

John Vescera, 60, Dana Point, California, was to 12 months and one day of imprisonment, followed by three years of supervised release, for false advertising and misusing a government seal in connection with the provision of mortgage modification services. On May 3, 2016, Vescera pleaded guilty to one count of misuse of a government seal and one count of false advertising.

According to court documents and statements made in court, Vescera was the President of First One Lending Corporation (“First One”) in San Juan Capistrano, California.  During the peak of the national mortgage crisis, Vescera and First One offered home mortgage loan modification assistance to homeowners across the United States, including in Connecticut, who were having difficulty repaying their mortgage loans.

From approximately February 2010 until approximately February 2012, Vescera and First One solicited clients through television advertisements and infomercials produced by National Media Connection of New London, Connecticut.  These advertisements touted the mortgage modification services of an entity known as the National Mortgage Help Center (“NMHC”).

Matthew Goldreich, of East Lyme, Connecticut, had incorporated NMHC approximately two months after the U.S. Treasury Department announced that it would partner with financial institutions to reduce struggling homeowners’ monthly mortgage payments through a program called the Home Affordable Modification Program (“HAMP”).  HAMP consisted of a number of incentives to encourage homeowners and financial institutions to modify existing loans on owner-occupied primary residences in order to help keep these properties out of foreclosure.

NMHC advertisements misrepresented NMHC as being affiliated with or regulated by the U.S. government and falsely stated that NMHC “help[ed] thousands of homeowners every day.”  When viewers called the advertised telephone number, they were connected not to NMHC, which operated only as a front and did not provide mortgage modification services for any homeowners, but to clients of National Media Connection, including First One.

Vescera and First One used NMHC’s name and logo in First One’s promotional materials, application package and other documents.  Vescera also instructed First One employees to introduce themselves to prospective clients as “with the National Mortgage Help Center.”

First One also misrepresented its status with the U.S. Department of Housing and Urban Development (“HUD”).  First One employees were instructed to inform homeowners that “[w]e’re a HUD approved lender and we represent the government loan modification programs.”  In addition, certain of First One’s forms claimed that the company provided “HUD . . . Housing Counseling assistance” and bore HUD’s seal.  In truth, First One had no affiliation with the government mortgage loan assistance programs and was not licensed or approved by HUD for housing counseling or home mortgage loan modification services.

Through this scheme, 302 victims lost a total of $374,622.  Many of these victims were previously compensated after Vescera and First One paid approximately $1.5 million to the Neighborhood Assistance Corporation of America in March 2013 to resolve a federal lawsuit in the Central District of California.  As part of this criminal case, Vescera paid restitution of $30,320 to 24 of the victims who were not identified at the time the federal lawsuit was settled.

Goldreich previously pleaded guilty to one count of false advertising.  On November 5, 2015, he was sentenced to two years of probation, including three months of home confinement.  He also was ordered to pay a $100,000 fine and $75,794 in restitution.

Vescera was sentenced by Chief U.S. District Judge Janet C. Hall in New Haven, Connecticut.  Deirdre M. Daly, United States Attorney for the District of Connecticut announced the sentence. The investigation was conducted by the U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, and Federal Bureau of Investigation.  The case was prosecuted by Assistant U.S. Attorneys Avi Perry and Liam Brennan.

Domonic McCarns, 41, Irvine, California, was sentenced to 14 years in prison by U.S. District Judge Kimberly J. Mueller for conspiracy to commit mail fraud for his participation in a nationwide foreclosure-rescue scam, Acting U.S. Attorney Phillip A. Talbert announced.

McCarns is the final defendant to be sentenced for a pair of schemes that lured homeowners with the promise to help them avoid foreclosure and repair their credit. Two indictments were brought in 2008. Four defendants were convicted after two jury trials, 13 defendants pleaded guilty, and now, all 17 defendants have been sentenced. On September 9, 2013, Charles Head was sentenced to 35 years in prison, and on October 29, 2014, his brother and fellow leader in the scheme Jeremy Michael Head was sentenced to 10 years in prison.

According to court documents, the defendants solicited homeowners facing foreclosure, and through misrepresentations, fraud, and forgery, substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants, or were solicited on the internet. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

Initially, the scam focused on distressed homeowners in California before expanding throughout the United States. In the course of the schemes, between January 2004 and June 2006, the defendants obtained over $90 million in fraudulent loans, caused estimated losses of over $50 million, and stole title to over 300 homes.

On December 2, 2013, McCarns was convicted after a five-week trial along with Charles Head, 36, Pittsburgh, Pennsylvania, (formerly of Los Angeles); and Benjamin Budoff, 49, Colorado Springs, Colorado. Head had been previously convicted in a trial in a nearly four-week trial in May 2013 with his brother Jeremy Michael Head, 34, Huntington Beach, California.

The case was the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris prosecuted the case.

Fourteen other defendants have been sentenced:

Elham Assadi, 39, Irvine, California, sentenced to 5 years’ probation with 6 months of home detention;

Leonard Bernot, 50, Laguna Hills, California, sentenced to 18 months in prison;

Akemi Bottari, 36, Los Angeles, California, sentenced to 3 years’ probation with 6 months of home detention;

Keith Brotemarkle, 51, Johnstown, Pennsylvania, sentenced to 5 years, 10 months in prison;

Benjamin Budoff, 49, Colorado Springs, Colorado. sentenced to 4 years in prison;

Joshua Coffman, 37, North Hollywood, California, sentenced to 20 months in prison;

John Corcoran, 61, Anaheim, California, sentenced to 4.5 years in prison;

Sarah Mattson, 33, Phoenix, Arizona, sentenced to 3 years’ probation with 3 months of home detention;

Omar Sandoval, 36, Rancho Cucamonga, California, sentenced to 4 years and 10 months in prison;

Xochitl Sandoval, 37, Rancho Cucamonga, California, sentenced to 8 months in prison;

Lisa Vang, 31, Westminster, California, sentenced to 3 years’ probation;

Andrew Vu, 38, Santa Ana, California, sentenced to 6 months in prison with 6 months of home detention;

Justin Wiley, 37, Irvine, California, sentenced to 18 months in prison, and

Kou Yang, 40, Corona, California, sentenced to 4 years in prison.

Acting U.S. Attorney Phillip A. Talbert said, in announcing the sentence: ‘This scheme purposely targeted the financially vulnerable during their time of greatest distress with promises of help. The defendants tricked the victims into handing over their most valuable assets, their homes. Few economic crimes are more reprehensible. This final sentence in this case will bring some measure of justice for their victims.”

In large fraud schemes like the one devised by Charles Head, we can’t forget about the individual homeowners who comprised the millions of dollars in losses,” said Monica M. Miller, Special Agent in Charge of the Sacramento division of the FBI. “Today’s sentencing ends an investigation that has been ongoing for more than 10 years and brings some closure to the innocent people who were victimized by Head’s callous scheme.”

Dominic McCarns and his co-conspirators assured innocent homeowners across the country facing foreclosure that they could turnaround their misfortunes and keep their homes,” said Michael T. Batdorf, Special Agent in Charge, IRS-Criminal Investigation. “However the defendants had other plans which resulted in one of the most harmful mortgage fraud schemes in the country. The sentence handed down today by the court is befitting of this defendant and his actions.”

Mehdi Moarefian, also known as “Michael Miller,” 37, Irvine, California, was sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, to 52 months of imprisonment, followed by three years of supervised release, for participating in an extensive mortgage loan modification scheme. Moarefian also was ordered to pay restitution in the amount of $2,390,496.59.

According to court documents and statements made in court, Aria Maleki, Moarefian and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees. The defendants did business, at various times, as “First Choice Financial Group, Inc.,” “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” “Nation Star Financial,” and “Nation Star Fin Group.”

Maleki presided over the entire structure of this scheme, and Moarefian was a senior member of the sales team. Acting as representatives of the above-named entities, Moarefian and other co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services. To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

The investigation revealed that the top tier of salesmen, including Moarefian, were paid based on commission and typically earned 45 percent to 50 percent of the final fee, after $750 to $1,000 was taken by Maleki for administrative costs.

On January 21, 2016, a grand jury in New Haven, Connecticut returned an indictment charging Maleki, Moarefian and five other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on January 26, 2016.

On February 17, 2016, Moarefian pleaded guilty to one count of conspiracy to commit mail and wire fraud.

Maleki pleaded guilty to the same charge and, on July 18, 2016, was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

Deirdre M. Daly, United States Attorney for the District of Connecticut, made the announcement. The matter was by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.