Robert Hance, a Michigan resident and loan officer with Fifth Third Bank, was indicted on charges that he conspired with others to defraud Fifth Third Bank and obtain money through false pretenses. Specifically, straw buyers, who were paid a fee, were allegedly recruited to serve as mortgage loan applicants for the purchase ofContinue Reading...
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Hannah Noel Perlich, 29, Minneapolis, Minnesota, a former loan officer was indicted in connection with a $3 million mortgage fraud scheme that involved six properties. The defendant was charged with six counts of wire fraud and one count of conspiracy to commit wire fraud in connection to the crime. Perlich worked as a loan officer for two mortgage brokerage companies -Continue Reading...
Michael Pahutski, 48, Gastonia, North Carolina, was sentenced to 19 years imprisonment to be followed by five years of supervised release. Pahutski was also ordered to perform 200 hours of community service and pay restitution of approximately $3.5 million. As previously
Michael Pahutski, 48, Gastonia, North Carolina, was sentenced to 19 years imprisonment to be followed by five years of supervised release. Pahutski was also ordered to perform 200 hours of community service and pay restitution of approximately $3.5 million. As previously reported by Mortgage Fraud Blog, Pahutski pled guilty prior to trial, without the benefit of a plea agreement, to all twenty-one counts in the indictment then pending against him.
The sentence is the latest step in an ongoing investigation of mortgage fraud schemes carried out around the Charlotte, North Carolina area, which led to the charging of eight individuals with mail, wire and bank fraud conspiracy, money laundering conspiracy, and related charges in March 2008. The investigation also resulted in the trial of closing attorney and co-defendant Victoria Sprouse in March 2009.
A federal indictment charging Michael Pahutski with mortgage fraud-related offenses, was originally filed in August 2007, followed by a superseding indictment adding charges and five other defendants in March 2008. To date, all six of those defendants have been either convicted at trial or have entered pleas of guilty. The charges represent the results of a local investigation which stemmed from the detection of an original mortgage fraud scheme in September 2002, and focused on a group operating in and around the Charlotte area.
The indictment alleged, and the evidence presented at the sentencing hearing and elsewhere, showed that all the defendants participated in a series of mortgage fraud schemes involving more than $20 million in mortgage loans and hundreds of houses in Charlotte-area neighborhoods. The defendants included Pahutski who served as a loan officer, as well as a closing attorney, a real estate appraiser, another mortgage broker, and two real estate agents. The indictment also identified two other attorneys, three home builders (including one national homebuilder), and several real estate investors as co-conspirators in these schemes. One of the banks victimized by the schemes closed its doors in mid-2007 after 103 years of business in large part due to the scheme.
The indictment alleged that Pahutski participated in a “flip” mortgage fraud scheme where houses were purchased through fraudulent mortgage applications and use of other false documents. Pahutski was originally indicted in this case in connection with a scheme involving closing attorney Victoria Sprouse and real estate investor Stephen Hawfield, in which approximately 210 houses were purchased in a “flip scheme” through fraudulent mortgage applications to nBank for more than $15 million.
U.S. District Judge Martin Reidinger pronounced the 19 year sentence. In doing so, Judge Reidinger explained that he hoped others would note the sentence, and “see that they do not want to become mortgage fraudsters.” The Judge noted that the offense had caused substantial damage to nBank, which failed, and also had caused substantial damage to our financial system. Judge Reidinger said that the heavy sentence was based in part on the fact that Pahutski had been entrusted by the state of North Carolina with a license, and “was supposed to have been part of the firewall to prevent this [mortgage fraud] from happening, but instead became part of the problem.” Following the sentencing hearing, Judge Reidinger ordered that Pahutski be immediately taken into custody and detained as a flight risk.
Michael D. Pahutski, 48, Charlotte, NC, a Loan Officer, Guilty plea entered 3/3/09 Sentenced 5/6/11 to 228 months imprisonment to be followed by a five-year term of supervised release, 200 hours of community service, and ordered to pay $3,563,125.27 in restitution.
Victoria L. Sprouse, 40, Charlotte, NC, a Closing Attorney, Jury trial 3/23/09 – 4/1/09, Guilty verdict by jury 4/1/09, Awaiting sentencing.
Michael Gee, 61, Hilton Head, SC, an Appraiser, Guilty plea entered 3/10/2009, Sentenced 6/24/10 to 24 months imprisonment to be followed by a three-year term of supervised release and ordered to pay $3,563,125.27 in restitution
Gregory A. Mascaro, 44, Harrisburg, NC, a Real Estate Agent, Guilty plea entered 6/9/08, Sentenced 2/27/09 to 24 months imprisonment to be followed by a three-year term of supervised release and ordered to pay $62,361.21 in restitution.
Jules Springs, 43, Charlotte, NC, a Loan Officer, Guilty plea entered 7/7/08, Sentenced 5/19/09 to 24 months imprisonment to be followed by a three-year term of supervised release and ordered to pay $62,361.21 in restitution.
Gregory D. Rankin, 36, Charlotte, NC, a Real Estate Agent, Guilty plea entered 6/25/08, Sentenced 2/27/09 to five years probation, first 23 months under home confinement.
The United States Attorney’s Office for the Western District of North Carolina announced the sentence.
Joining the U.S. Attorney’s Office in making the announcement are Jeannine Hammett, Special Agent in Charge of IRS-Criminal Investigation Division; Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division; Inspector In Charge of the U.S. Postal Inspection Service, Keith Fixel; and Wayne Goodwin, Commissioner, North Carolina Department of Insurance.
The case was investigated by Special Agents of the FBI, Charlotte, Special Agents of the IRS-CI, U.S. Postal Inspectors, and criminal investigative personnel of the NC Insurance Commission. The case was prosecuted by Assistant U.S. Attorneys Kurt W. Meyers and Jenny Sugar of the U.S. Attorney’s Office, Criminal Division, Charlotte, NC, as well as former Assistant U.S. Attorney Matthew Martens.
Garret Griffith Gililland III, 29, and Nicole Magpusao, 31, both formerly of Chico, California, and now in federal custody, pleaded guilty before Senior United States District Judge Edward J. Garcia. Gililland pleaded guilty to one count of mail fraud and one count of money laundering. Continue Reading...
Larry Gene Hillard, 56, Maple Grove, Minneapolis, a former loan officer for Wells Fargo Bank, pleaded guilty to participating in a $4.3 million mortgage fraud scheme. Hillard pleaded guilty to one count of conspiracy to commit wire fraud. The Defendant, who was charged on March 10, 2011, entered his Continue Reading...
A loan officer and five straw buyers/investors were charged in federal court via a criminal information for their roles in a mortgage fraud scheme involving 26 properties throughout the Cleveland, Ohio, area and more than $7.5 million in mortgage loans:
Jeffrey S. Brown, Jr., 30, Cleveland, Ohio, a loan officer;
James Dan, 46, Annapolis, Maryland, was sentenced by U.S. District Judge J. Frederick Motz to a year and a day in prison followed by three years of supervised release for conspiracy to commit wire fraud in connection with a mortgage fraud scheme which promised to help homeowners facing foreclosure keep their homes, but left them homeless and with no equity. Judge Motz also ordered that Continue Reading...
Stanley Walton, 52, and Pamela Black, 62, both of Las Vegas, Nevada, an attorney and a mortgage loan officer, have been charged with conspiracy to commit bank, mail and wire fraud for allegedly participating in a scheme to obtain mortgage loans from financial institutions using straw buyers and false loan applications. The defendants were indicted by the federal grand jury onContinue Reading...
Six individuals were indicted on allegations that they conspired to defraud financial institutions by using straw buyers to purchase luxury homes in Paradise Valley, North Scottsdale, Arcadia, Fountain Hills and other upscale areas in the Phoenix, Arizona area. The defendants include: