Archives For Down Payment Fraud

Michael David Scott, real estate developer, 51, Mansfield, Massachusetts, was sentenced to 135 months in prison, five years of supervised release, and ordered to pay restitution of over $11,374,201and to forfeit $7,413,712.  In June 2015, Scott pleaded guilty to counts of 32 counts of wire fraud, 14 counts of bank fraud, and 22 counts of money laundering. Continue Reading…

David B. Pick, loan originator, 47, Bowie, Maryland, pleaded guilty to making false statements arising from a real estate closing.

Pick was a loan originator responsible for preparing loan applications, obtaining documentation to support the representations in loan applications, presenting loan applications to financial institutions for funding and working with financial institutions to close loans.

In 2005, Pick sought a $900,000 construction loan from a mortgage lender to purchase and construct a residence at 1206 Tilghmans Landing Way, Annapolis, Maryland.  The residence was to be constructed by Richland Homes, Inc., owned and operated by Timothy Ritchie, 44, Annapolis, Maryland .  Continue Reading…

Antonio Pimenta, 47, Neshanic Station, New Jersey, admitted his role in a scheme that used straw buyers and phony loan documents to fraudulently obtain a $400,500 loan on a property in Irvington, New Jersey.

According to documents filed and statements made in court: Pimenta owned and managed Kelmar Construction Co. Kelmar built multiple properties in Irvington, New Jersey. These properties were sold to straw buyers utilizing fraudulent mortgage loans brokered by loan officer, Klary Arcentales, 47, Lyndhurst, New Jersey, and closed by settlement agent Linda Cohen, 57, Orange, New Jersey, who used fraudulent settlement statements to hide the true sources and destinations of the mortgage funds. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings. Continue Reading…

Hubert Rotteveel, 52, Dixon, California was sentenced  to three years and four months in prison for one count of mail fraud, .

In September 2014, Rotteveel was found guilty by a federal jury of one count of mail fraud relating to 13 properties in Dixon. According to evidence produced at trial, Rotteveel acted as a real estate salesperson for the 13 properties, with over $7 million in loans authorized for just two buyers in seven months. He inflated the values of the properties and worked with loan officers to provide false information to lenders about the income and liabilities of the buyers to induce the lenders to fund loans for the properties. Rotteveel surreptitiously made the down payments on the homes, instead of the buyers, and got that money (and usually more) back from the lenders at closing. For most of the transactions, when the sales closed, the escrow officer distributed funds to a bank account in the name of Windmill Properties, a company owned by Rotteveel, without disclosing these payments to the lenders. All 13 properties were used as rentals, with Rotteveel collecting the rents through Windmill Properties. He netted over $300,000 through the sales in just seven months, and the lenders lost more than $3 million when all 13 properties underwent foreclosure.

United States Attorney Benjamin B. Wagner stated: “Hubert Rotteveel used his knowledge of the real estate market in Dixon to defraud lenders of over $7 million, resulting in losses of over $3 million after each of the homes went into default and a foreclosure sale was held. Today’s sentence is one step in the continuing effort to hold real estate professionals responsible for their role in the mortgage meltdown.”

This prosecution should serve as a warning to those who abuse their position of trust,” said Thomas McMahon, Acting Special Agent in Charge, IRS-Criminal Investigation. “Mr. Rotteveel manipulated the MLS listings for properties, failed to disclose his true role in the transactions and made numerous misrepresentations to lenders.  Although this sentence cannot reverse the damage caused by Mr. Rotteveel, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”

Rotteveel was sentenced by Senior United States District William B. Shubb.   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 Jean M. Hobler and Justin L. Lee prosecuted the case.

Eliseo Jara Jr., 36, Bakersfield, California, was sentenced to six and a half years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $4.3 million in restitution. Sergio Jara, 34, Bakersfield, California, was sentenced to six and a half years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $3,249,624 in restitution. Melissa Rochelle Jara, 34, Bakersfield, California, was sentenced to time served and five years on supervised release for wire fraud, and was ordered to pay $271,171 in restitution. The Jaras were also ordered to forfeit their interests in six properties in Bakersfield, a 2007 Lexus, and approximately $110,419 seized from a bank account, and to pay personal forfeiture money judgments of $5,664,250 as to Eliseo Jara, $4,743,500 as to Sergio Jara, and $534,750 as to Melissa Jara. Prior to sentencing, Sergio and Melissa Jara also deposited approximately $148,000 with the Court toward their restitution obligations. Continue Reading…

Angela M. Blythe, attorney, 51, Oakland, Maryland, was convicted by a federal jury of conspiring to commit bank fraud, bank fraud and two counts of making a false statement to a bank.  Blythe was an attorney licensed to practice in Maryland and West Virginia, with an office in Oakland, Maryland.  She was a settlement attorney in real estate transactions.

According to evidence presented at the nine day trial, from 2000 to 2006, Blythe prepared deeds, mortgages and notes using false identities provided by her co-conspirator.  Blythe recorded those fraudulent documents in Garrett County, Maryland and Preston County, West Virginia, which concealed her co-conspirator’s ownership of the properties.  On at least seven occasions, Blythe also conducted property settlements in which her co-conspirator participated as buyer, seller and/or borrower using the false identities, which Blythe concealed from the lenders. Blythe failed to conduct the settlement transactions as described on the settlement statements and paid over the seller’s proceeds as her co-conspirator directed. Continue Reading…

Michael R. Anderson, 46, attorney, Framingham, Massachusetts, was sentenced to two years in prison, two years of supervised release, and ordered to pay $11,048,212 in restitution and forfeit $7,413,712 in connection with a multi-year, multi-property mortgage fraud scheme in Dorchester and Roxbury, Massachusetts.  In January 2011, Anderson pleaded guilty to sixteen counts of wire fraud, nine counts of bank fraud, and two counts of engaging in unlawful monetary transactions.   Continue Reading…

Christopher Brecciano, 37, of Stamford, Connecticut was sentenced  to 14 months of imprisonment, followed by five years of supervised release, for conspiring to defraud financial institutions through an extensive mortgage fraud scheme that involved dozens of properties in Fairfield County, Connecticut.

According to court documents and statements made in court, between 2006 and 2010, Brecciano, while working as an associate at a Stamford law firm, participated in mortgage fraud conspiracy that involved the purchase of numerous single and multi-family properties, primarily in Bridgeport, Norwalk and Stamford, Connecticut. Brecciano acted as a closing attorney for at least 50 mortgage loan transactions in which materially false information was provided to mortgage lenders by Brecciano or his co-conspirators. The fraudulent information included false verifications of down payments for real estate transactions, false deeds, and false HUD-1 Forms. In many of the transactions, Brecciano knew that the borrower was a “straw buyer,” and that other individuals intended to control the property and collect rent from the property. In many transactions, Brecciano distributed mortgage loan funds to the straw buyer and other co-conspirators at the closing. Continue Reading…

 Timothy L. Ritchie, 44, Annapolis, Maryland, pleaded guilty to making false statements arising from a real estate closing.

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

According to his plea agreement, on July 7, 2005, Ritchie attended a residential closing for his purchase of three lots located at 24058 St. Michael’s Road, St. Michael’s, Maryland.  John L. Davis, 55, real estate agent, Chestertown, Maryland, conducted the closing, and listed Ritchie on the HUD statement as the buyer/ borrower.  The HUD statement falsely stated that Ritchie provided $1,153,937.23 in cash at the closing.  In fact, Ritchie did not provide any funds to Davis at the closing. As a result of the false statement, Ritchie fraudulently obtained approximately $2,445,102 from a mortgage lender by wire transfer to fund the settlement.

Ritchie faces a maximum sentence of five years in prison.  U.S. District Judge Richard D. Bennett scheduled his sentencing for January 14, 2016, at 10:00 a.m.

John L. Davis previously pleaded guilty to conspiracy to commit mail fraud and wire fraud arising from his participation in the scheme, and awaits sentencing. Davis admitted that the loss arising from his participation in the scheme is between $400,000 and $1 million.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General; and Special Agent in Charge Fran Mace, of the Federal Deposit Insurance Corporation Office of Inspector General.  United States Attorney Rod J. Rosenstein commended the FHFA – OIG and FDIC – OIG for their work in the investigation.  Mr. Rosenstein thanked Special Assistant U.S. Attorney Kevin V. DiGregory and Assistant U.S. Attorney Kathleen O. Gavin, who are prosecuting the case.

Kevin Campbell, 53, Pyesville, Maryland, was sentenced to 19 months in prison followed by five years of supervised release for conspiring to commit mail, wire and bank fraud arising from mortgage fraud schemes resulting in losses totaling approximately $1.2 million and was ordered to pay restitution of $1,182,822.

Jonathan L. Miles, 45, Perry Hall, Maryland to 18 months in prison followed by five years of supervised release for conspiring to commit bank fraud, and entered an order that Miles pay restitution of $1,182,822.

Campbell invested in Baltimore residential real estate, and controlled four companies that bought and sold residential real estate: KMJ Realty LLC; E&W Realty LLC; C Realty LLC; and City Realty LLC. Miles was a loan officer for a mortgage brokerage company formerly located in Reisterstown, Maryland. Continue Reading…