Archives For inflated income

Barry E. Horrow was charged by information in the Eastern District of Pennsylvania with four counts of bank fraud and one count of aiding and abetting.

The information alleges that Horrow was a CPA who owned and operated Horrow and Associates, first in Delaware County and then in Chester County, Pennsylvania.  From January 2005 through March 2013, George Barnard and David Fili, Jr. (both of whom were charged separately), began operating Capital Financial Mortgage Corp (“CFMC”) first as a mortgage brokerage and later as a direct mortgage lender.  Barnard also had a direct or indirect ownership interest in various title companies, including PA/NJ Abstract, Inc. dba East Coast Land Transfer, PANJ Land Transfer LLC, Tri-State Land Transfer LLC, Nationwide Land Transfer LLC, Atlantic Closing Services LLC and Gulf Coast Land Transfer Inc. CFMC and the title companies were clients of Horrow and Horrow prepared financial statements and the personal tax returns of Barnard and the corporate tax returns of CFMC and the title companies. The financial statements Horrow prepared for Barnard and CFMC were false. Horrow purported to conduct audits of CFMC and issued audit reports that he knew were being submitted to lenders to help secure loans for CFMC and Barnard when, in fact, he did not conduct any true audits and knew the audit reports were false.

The information further alleges that, in order to qualify for a loans to purchase homes at 221 65th Street, Avalon, New Jersey, 39 E. 25th Street, Avalon, New Jersey, and 670 First Avenue, Avalon, New Jersey, Barnard prepared and submitted various documents, including documents Barnard knew were false, in order to falsely inflate his income and cause the bank to believe his cash flow and net worth were greater than they were. The false documents included false tax returns prepared by Horrow.

Kirk Douglas West aka Kirk R. Leipzig was charged with two counts of bank fraud by Information in the United States District Court for the Middle District of Tennessee (Nashville Division.)  The Information alleges that Leipzig inflated his income and net worth on personal financial statements and/or loan application documents submitted to Reliant Bank and submitted fraudulent or forged documents to support the misrepresentations – including a consulting agreement purporting to guarantee income of approximately $300,000 a year for multiple years, W-2 forms, a pay stub, and income tax returns.  Based on these misrepresentations, Reliant Bank disbursed two loans, the first on December 4, 2008 for $610,000 secured by 9569 Hampton Reserve Drive, Brentwood Tennessee and the second on March 1, 2010 for $1,600,000 secured by 4303 Harding Place, Nashville, Tennessee.  The information also seeks forfeiture.

Leipzig’s real estate investment success was featured in the Forbes article “Flipping for Profit” on July 8, 2008.  According to the Nashville Post, Greg Sturgeon filed a complaint in the Davidson County Chancery Court in March 2013, which was dismissed with prejudice a short time later, alleging that Leipzig, the manager of Home Equity Asset Partners, promised him a return on investment for contributing $60,000 to an East Nashville house flip and, that while Leipzig sold the home for $457,000 after purchasing it for $135,000, he had quitclaimed the property to Home Equity Asset Partners without Sturgeon’s knowledge and only returned about $40,000 of Sturgeon’s initial investment. The article also refers to other lawsuits against Leipzig, including lawsuits by two banks which claimed Leipzig failed to repay loans in 2011 and 2012.  A May 2013 article in the Nashville Post states that the City of Belle Meade filed a lawsuit against a land trust that owns a dilapidated property – the trustee of the trust being listed as under the care of Leipzig – claiming the property’s condition violated numerous codes.

Leipzig and his trust were also the subject of involuntary bankruptcy filings by creditors in 2014.

Sung Ho Mo, a/k/a “Douglas Mo,” 53, Totowa, New Jersey, a self-employed loan broker, admitted using bogus documents and simultaneous applications at multiple banks to fraudulently obtain home equity lines of credit, resulting in losses of $1.3 million.  Mo pleaded guilty  before U.S. District Judge Katharine S. Hayden to an information charging him with conspiracy to commit bank fraud.  He was previously arrested on August. 4, 2015 and released on bail.

According to documents filed in the case and statements made in court:

Mo was the primary owner and operator of “Douglas Mo Mortgage,” a mortgage brokerage business in New Jersey. From 2005 through January 2014, Mo conspired with others, including a tax preparer, to fraudulently obtain home equity lines of credit and first mortgages. Continue Reading…

Christian Parada-Renteria, 40, Woodland, California, pleaded guilty to one count of concealing a widespread conspiracy to commit wire fraud and one count of concealing a mail fraud transaction in connection with a mortgage fraud scheme,

According to court documents, Parada-Renteria was a loan officer at Delta Homes and Lending Inc., a Sacramento, California based real estate and mortgage lending company. Delta Homes opened one office in 2003 and eventually had five offices in Sacramento and Woodland, California. Continue Reading…

Janna Nassida, 45, West Mifflin, Pennsylvania, and James Nassida, 48, Pittsburgh, Pennsylvania, were charged by a federal grand jury in a two count indictment with wire and bank fraud conspiracy.

According to the indictment, from 2002 to 2008 James Nassida and his sister Janna Nassida knowingly conspired with other individuals known to the grand jury to defraud lenders and consumers. James and Janna Nassida worked at Century III Home Equity, a mortgage broker firm. The fraud scheme involved the submission of loan applications to lenders that contained material misrepresentations about the borrowers’ financial conditions, such as inflating borrowers’ incomes and assets. James and Janna Nassida, along with others who worked at Century III, also submitted bogus supporting documentation for the misrepresentations contained in the applications, as well as appraisals that overstated the values of the properties serving as collateral for the loans.

The law provides for a maximum total sentence of 60 years in prison, a fine of $2,000,000 or both.

The indictment was announced by United States Attorney David J. Hickton.  Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.

Ray M. Mubarak, 56, Knoxville, Tennessee, was sentenced to serve 57 months in prison for conducting a scheme to defraud financial institutions and engaging in an unlawful monetary transaction with fraudulently-obtained loan proceeds.  He was also ordered to pay $1,993,938.44 in restitution to three banks and a title insurance company that lost money as a result of the scheme.

Mubarak pleaded guilty in May 2015 to federal charges stemming from his scheme to defraud multiple banks into loaning him over $6 million. He submitted false tax returns and personal financial statements which grossly inflated his income and net worth in order to qualify for the loans. Mubarak also admitted to defrauding the banks by causing them to rely on a fraudulent title opinion letter and forged loan closing documents and deeds.

The trial for Mubarak’s co-defendants, Dianna Mubarak and Blythe Bond Sanders, III, is scheduled for March 1, 2016.

Marbarak was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge.  The investigation was conducted by the Internal Revenue Service – Criminal Investigation and Federal Bureau of Investigation.  The investigation and prosecution of Mubarak was coordinated with the Office of the District Attorney General, 6th Judicial District.  Matthew T. Morris, Assistant U.S. Attorney, represented the United States.

Steven A. Crites, 44, Martinsburg, West Virginia, was sentenced to one day in prison followed by one year of supervised release for making a false statement on a loan application.

Crites applied for a loan with Wells Fargo Bank and falsely indicated that his monthly income was $29,000. In fact, his monthly income was $2,833.33. He pled guilty in March 21015 to one count of “False Statement on Loan Application.”

United States Attorney William J. Ihlenfeld, II, announced the sentence.  Assistant U.S. Attorney Paul Camilletti prosecuted the case on behalf of the government. The Federal Bureau of Investigation led the inquiry.

Chief U.S. District Judge Gina M. Groh presided.

Jason Calabrese, 44, Watertown, Connecticut was sentenced to six months of imprisonment, followed by three months of home confinement and two years of supervised release, for his involvement in a series of fraudulent mortgage loan applications involving a straw borrower. Calabrese also was ordered to pay a $3,000 fine and $400,585 in restitution.

According to court documents and statements made in court, in November 2005, Calabrese ’s co-conspirator, Thomas Provenzano, obtained a $923,200 loan to purchase a lakefront home located at 27 Palmer Road, Morris, Connecticut, for more than $1.1 million, despite lacking the income to pay off the mortgage. The 27 Palmer Road property was owned by an entity controlled by Ryan Geddes, another co-conspirator. Continue Reading…

Glorvina Constant, 36, New Haven, Connecticut, was sentenced  to one year of probation for participating in a mortgage fraud scheme.  Her husband, Jason Sheehan, 41, New Haven, Connecticut, was sentenced to 37 months in prison for a bankruptcy and tax fraud scheme involving his company, Infinistaff, LLC.  As part of that scheme, Constant received Infinistaff payroll checks totaling $354,000 during the pendency of Infinistaff’s bankruptcy proceedings even though she performed no work for the company. Continue Reading…

Michael P. O’Donnell, 53, mortgage broker, Middleton, Massachusetts was convicted of one count of bank fraud after a three-day bench trial before the Honorable Douglas P. Woodlock, United States District Judge.  Judge Woodlock scheduled sentencing for October 20, 2015. Continue Reading…