Archives For Down Payment Fraud

Joseph Pasquale, 39, Worcester, Massachusetts, to four years and nine months in federal prison for conspiracy to commit bank fraud and bank fraud. A federal jury found him guilty in January 2016.

According to testimony and evidence presented at trial, Pasquale worked as a real estate sales associate for a brokerage based in Cape Coral, Massachusetts. Between October 2007 and March 2008, he was involved in the negotiation and sale of four condominium units at the Arbors of Carrollwood, to clients in California and Massachusetts. Pasquale engaged in a conspiracy to conceal sales incentives from mortgage lenders, which these clients received from the seller, along with private loans that Pasquale made to the buyer-clients enabling them to bring cash to their respective real estate closings. As a consequence of his actions, Pasquale helped to cause a loss of approximately $937,000 to Wells Fargo Bank when the mortgages involved in the case went into foreclosure.

Pasquale was sentenced by U.S. District Judge Elizabeth A. Kovachevich.  The case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency – Office of Inspector General. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay L. Hoffer.

Angel Garcia-Oliver, 49, Miami, Florida, pleaded guilty to conspiracy to commit bank and wire fraud.  He faces a maximum penalty of 30 years in federal prison.

According to the plea agreement, Garcia-Oliver was the principal of Garcia-Oliver & Mainieri, P.A., a law firm located in Coral Gables, Florida.  Tribute Residential, LLC, which was owned by a co-conspirator, owned and sold multiple communities.  Garcia-Oliver, or employees working at his direction, served as settlement agents and conducted dozens of real estate closings for condominium units owned by Tribute, including Cypress Pointe in Orlando, Florida and the Villas at Lakeside in Oviedo, Florida. Continue Reading…

Minas Litos, 50, Saint John, Indiana; Adrian Tartareanu, 45, Saint John, Indiana; and Daniela Tartareanu, 44, Saint John, Indiana; were sentenced in federal court by Chief Judge Philip Simon  for conspiracy and wire fraud.

Litos entered a plea of guilty to one count of conspiracy and sixteen counts of wire fraud and was sentenced to 18 months imprisonment.  The Court will determine whether restitution should be imposed at a later date.

Adrian and Daniela Tartareanu were found guilty by a jury of one count of conspiracy and sixteen counts of wire fraud.  Adrian Tartareanu was sentenced to 36 months imprisonment.  His wife  Daniela Tartareanu was sentenced to 21 months imprisonment.

Minas Litos and Adrian Tartareanu owned Red Brick Investment Properties.  Daniela Tartareanu was the office manager.  They participated in an illegal scheme in which they convinced others to buy homes in Gary, Indiana.  To induce the individuals, the defendants told prospective buyers that they were not required to provide down payment funds, and that the rental income would cover the costs associated with owning rental property.  They concealed from the lenders and title companies that they paid the down payment money on behalf of the buyers.  They also paid kickbacks to the buyers.  The scheme lasted two years and involved 45 fraudulent transactions.    As a result, more than $2.5 million dollars was fraudulently obtained from the lenders with almost all the buyers subsequently defaulting on the loans.  Many of the properties are now vacant or considered a total loss by the lenders.

The sentence was announced by United States Attorney for the Northern District of Indiana, David Capp, and investigated by the Federal Bureau of Investigation.  The case was handled by Assistant United States Attorneys Gary T. Bell and Jill Koster.

Michael Yant, 40, Lexington, South Carolina, was sentenced to five months of incarceration, to be followed by five months home confinement,  in connection with a mortgage fraud scheme.   Yant also was ordered to pay almost $270,000 in restitution to the U.S. Department of Housing and Urban Development.

Evidence presented at the change of plea hearing established that between November 2011 and December 2013, Yant and others committed mortgage fraud on approximately fifteen Federal Housing Administration (FHA) loans. Specifically, Yant engaged in a prohibited rent-to-own scheme.  Yant collected rent from future buyers and used those funds for the buyer’s down payment at closing. Further, Yant added buyers to other people’s credit accounts as authorized users to enhance the buyer’s credit scores

Yant admitted to falsifying and submitting bank statements of buyers, paying off buyers’ debt and collection accounts, as well as falsifying buyers’ vehicle bills of sale in an effort to forge the origination of the buyer’s down payments. Also, Yant provided forged W-2’s and paystubs for buyers, as well as prepared false employment verifications to conceal the buyer not being an employee of certain businesses.  Further, Yant secured FHA loans for buyers who would not otherwise qualify by paying off the buyers’ debt and collection accounts to increase the buyers’ credit scores.

The case was investigated by the United States Department of Housing and Urban Development, Office of the Inspector General, and the United States Postal Inspection Service.  Assistant United States Attorney Winston Holliday of the Columbia office prosecuted the case.   The sentenced was announced by United States Attorney Bill Nettles.

Ataollah Aminpour aka John Aminpour, aka Johnny Aminpour, the former chief marketing officer at Mirae Bank, 57, Beverly Hills, California was indicted by a federal grand jury on eight counts of bank fraud and making false statements in connection with allegations that he was responsible for the bank issuing $150 million in fraudulent loans – loans that caused the bank to suffer $33 million in losses and were “a significant factor in Mirae Bank’s failure as a financial institution in 2009.”

According to the indictment, Aminpour held himself out as a successful businessman who could help people obtain financing for gas station and car wash businesses with little or no down payment. In some cases, Aminpour personally identified businesses to be purchased and negotiated a sale price, but he allegedly overstated the actual purchase price to buyers. For these buyers and others whom Aminpour introduced to Mirae Bank, the indictment alleges that Aminpour oversaw the loan process and provided loan officers with information and documentation that contained false facts and figures, including the actual purchase price of the business and the source of the down payment. As a result, Mirae Bank funded inflated loans, with excess funds secretly going to Aminpour, borrowers and/or “hard money lenders” who had surreptitiously provided funds used to make down payments. Continue Reading…

Timothy L. Ritchie, 44, Annapolis, Maryland, was sentenced to a year and a day in prison, followed by 12 months of home detention with electronic monitoring as part of three years of supervised release, for making false statements arising from a real estate closing and was ordered to pay restitution of $1,385,444.83.

In a related case, John L. Davis, real estate agent, 55, Chestertown, Maryland, previously pleaded guilty to conspiracy to commit mail fraud and wire fraud arising from his participation in the scheme, and is scheduled to be sentenced on March 31, 2016 at 3:00 p.m. Davis admitted that the loss arising from his participation in the scheme is between $400,000 and $1 million.

Ritchie owned and operated Richland Homes, Inc., and was in the business of building, purchasing and selling homes. Continue Reading…

Joseph L. Pasquale, 39, Fort Myers, Florida was found guilty by a federal jury of one count of conspiracy to commit bank fraud and four counts of bank fraud.

According to testimony and evidence presented at trial, Pasquale worked as a real estate sales associate for a brokerage firm based in Cape Coral, Florida. Between October 2007 and March 2008, he was involved in the negotiation and sale of four condominium units at the Arbors of Carrollwood, to clients in California and Massachusetts. Pasquale engaged in a conspiracy to conceal sales incentives from mortgage lenders, which these clients received from the seller, along with private loans that Pasquale made to the buyer-clients enabling them to bring cash to their respective real estate closings. As a consequence of his actions, Pasquale helped to cause a loss of approximately $937,000 to Wells Fargo Bank when the mortgages involved in the case went into foreclosure.

Pasquale faces a maximum penalty of 30 years’ imprisonment for each count. His sentencing hearing has been scheduled for April 8, 2016.

The verdict was announced by United States Attorney A. Lee Bentley, III and was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency-Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay L. Hoffer.

Cecil Sylvester Chester, 68, Mitchellville, Maryland pleaded guilty to charges arising from the fraudulent purchase of seven properties in Baltimore, Maryland, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.7 million.

“Mortgage fraud perpetrators steal by inducing lenders to make loans that will never be repaid, and they harm neighborhoods when the inevitable foreclosures drive down property values,” stated U.S. Attorney Rod J. Rosenstein.

Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland.  Co-conspirator Andreas Tamaris,  44, Bel Air, Maryland, purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in the Highlandtown,  Maryland.

According to his guilty plea, from February 2008 to July 2009, Chester and his co-conspirators, including Alexander Sivels, II, 32, Baltimore, Maryland, found buyers for Tamaris’ properties and for other property owners. Chester persuaded individuals, who were inexperienced with residential real estate transactions and who lacked the funds needed to pay the down payment and closing costs, to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators. Chester advised these “straw purchasers” that they didn’t need to contribute funds for the down payment or closing costs to buy these properties. Chester also advised that he would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester would collect the rent and make the mortgage payments.

Chester and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit.

The conspirators provided false information about the straw purchasers’ employment, income and financial assets, as well as fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.

Chester brought the straw purchasers to the closing, and then caused the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed.  Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.

Few, if any, payments were made towards the mortgages.  All of the seven properties which Chester was involved in went into foreclosure, resulting in a loss of at least $1,482,207.

Chester faces a maximum sentence of 30 years in prison and a $250,000 fine for conspiring to commit wire and mail fraud, and for wire fraud.  U.S. District Judge James K. Bredar has scheduled sentencing for March 23, 2016 at 2:00 p.m.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Special Agent in Charge Cary A. Rubenstein of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service – Baltimore Field Office.

In a related proceeding involving two of the properties at issue in the instant case, co-conspiratorTamaris, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud.  Sivels previously pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore.  Both Tamaris and Sivels are scheduled to be sentenced on September 27, 2016.

United States Attorney Rod J. Rosenstein commended the FBI , HUD OIG – Office of Investigations and the U.S. Secret Service for their work in the investigation.  Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.

Samuel R. VanSickle, 51, Accident, Maryland, pleaded guilty to conspiring to commit bank fraud arising from three fraudulent bank loans in which VanSickle received proceeds from the sale of real property in Garrett County, Maryland, and Cheat Lake, West Virginia, totaling over $5.7 million.

VanSickle and co-defendant Louis W. Strosnider, III, 49,  Oakland, Maryland, owned and developed property in Garrett County, Maryland. VanSickle used a number of different business names, including Freedom Church, Gospel Church, Equity Exchange, Unity Mortgage, Impartial Lenders, and Noble Forest Consultants, and aliases including “Donald Blunt,” “Jacob Aiken,” “Allen Helms,” and “Paul Walsh.”  Strosnider operated Stony Brook Development Company, located in McHenry, Maryland.

According to his plea agreement, from December 2001 to May 2005, VanSickle conspired with Strosnider for Strosnider to fraudulently obtain real estate loans from banks in connection with the purchase of properties controlled through aliases by VanSickle.  VanSickle concealed from the lenders his role as seller of the properties and recipient of the sales proceeds through fictitious identities such as “Donald Blunt, Trustee for Gospel Church,” “Donald Blunt, Trustee for Freedom Church,” “Equity Exchange,” “Unity Mortgage,” “Jacob Aiken” and “Allen Helms.” The scheme also involved fictitious down payments, inflated collateral, and false contracts.

For example, in 2002, VanSickle provided $600,000 for the purchase of Red Run, a restaurant and bed and breakfast which bordered on Deep Creek Lake in Garrett County, Maryland.  In April 2003, VanSickle caused Red Run to be transferred for $0 to “Donald Blunt, Trustee for Gospel Church” – a fictitious church with a fictitious trustee.  In February 2004, Strosnider signed a contract to buy Red Run from Gospel Church for $3 million.  The contract recited a fictitious $750,000 down payment.  Strosnider applied to a bank for a loan to complete the purchase of Red Run.  When the bank required additional collateral, VanSickle supplied a timber contract for land in Garrett County with a valuation signed by “Paul Walsh” of “Noble Forest Consultants.”  Both “Noble Forest Consultants” and “Paul Walsh” were fictitious.  The settlement for the sale of the property was conducted by attorney Angela Blythe, 52, Oakland, Maryland.  Blythe failed to collect Strosnider’s funds to close the loan.  At VanSickle’s direction, Blythe paid over the sales proceeds of $1.6 million to “Unity Mortgage,” which was VanSickle.  “Unity Mortgage” did not, in fact, have a mortgage on Red Run.Strosnider and VanSickle used similar fraudulent methods in Strosnider’s purchase from VanSickle of 5.87 acres on State Park Road, bordering Deep Creek Lake, and 116 acres of undeveloped land on Cheat Lake, West Virginia.

VanSickle received over $5.7 million in sales proceeds from the fraudulent transactions.   Strosnider defaulted on all three loans. As a result of the scheme, the loss to the financial institutions was $2,755,102.50, the amount of the loans minus the recovery from foreclosure and sale of the collateral. VanSickle has agreed to forfeit and pay restitution in that amount, and forfeit his interest in 40 properties held in VanSickle’s name or in the names of nominees in Maryland, West Virginia and Pennsylvania, up to the value of $2,755,102.50.

VanSickle faces a maximum sentence of 30 years in prison for the conspiracy.  U.S. District Judge Marvin J. Garbis scheduled sentencing for March 17, 2016, at 9:30 a.m.

The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.

Strosnider previously pleaded guilty to his participation in the conspiracy and awaits sentencing. In a related case, Blythe was convicted by a federal jury on October 9, 2015, after a nine day trial, of conspiring with VanSickle to commit bank fraud, bank fraud, and two counts of making a false statement to a bank.  U.S. District Judge William D. Quarles sentenced Blythe to a year and a day in prison, and entered an order requiring Blythe to forfeit $696,517 and pay restitution of $948,203.25.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorney Joyce K. McDonald and Philip A. Selden, who are prosecuting the case.

Michael P. O’Donnell, mortgage broker, 54, Middleton, Massachusetts, was sentenced by U.S. District Judge Douglas P. Woodlock to three years in prison, two years of supervised release and ordered to pay a fine of $150,000 in connection with his role in 20 fraudulent loan transactions in the North Shore area of Massachusetts.  In July 2015, O’Donnell was convicted following a three-day bench trial of attempted bank fraud. Continue Reading…