Archives For Straw Buyer

Tony Huy Havens, 42, Modesto, California, was sentenced to three years and five months in prison for his role in two mortgage fraud schemes.

Havens had earlier pleaded guilty to committing mail fraud and wire fraud in the two schemes, which were charged in separate criminal cases.

According to the indictment in the first scheme, Havens devised an “advance fee” scheme that targeted victims in at least eight states who were seeking multi-million dollar loans for large construction projects that were in danger of foreclosure. Havens provided the victims with fraudulent documents that showed a third-party lender was prepared to make a loan to the victim. On Havens’ instructions, the victims wire-transferred money into a bank account controlled by Havens to pay in advance certain costs associated with the loans. No loans were ever made. In total, Havens represented that he could arrange at least $1.1 billion in financing for at least 15 victim borrowers, and collected at least $248,750 by wire transfers from these victim borrowers.

According to the indictment in the second scheme, Havens arranged to purchase a single family residence in Modesto using two relatives as straw buyers. He obtained a loan in the name of the straw buyers that exceeded the actual selling price of the property, and arranged to have a portion of the purchase price sent back to him, which he used as the down payment for the purchase.

Havens was ordered to self-surrender to begin serving his sentence on April 4, 2016.

Havens was sentenced by United States District Judge Lawrence J. O’Neill.  The announcement was made by United States Attorney Benjamin B. Wagner.  The cases were the product of investigations by the Federal Bureau of Investigation, the Stanislaus County District Attorney’s Office, and the Federal Housing Financing Agency, Office of Inspector General. Assistant United States Attorneys Mark J. McKeon and Mia Giacomazzi prosecuted the cases.

 

Mohammed N. Islam, also known as “Tanveer,” 39, Trumbull, Connecticut, was sentenced 14 months of imprisonment, followed by three years of supervised release, for participating in a mortgage fraud scheme that involved dozens of properties in Fairfield County, Connecticut.

According to court documents and statements made in court, between 2006 and 2013, Islam participated in a mortgage fraud conspiracy that involved the purchase of numerous single and multi-family properties, primarily in Bridgeport, Norwalk and Stamford, Connecticut.  During the scheme, Islam and his co-conspirators provided materially false information to mortgage lenders, including false verifications of mortgage applicants’ income, false verifications of down payments for real estate transactions and false HUD-1 Forms. Continue Reading…

Edgar A. Reyes-Colón and Francisco Quintero-Peña were indicted on charges of with making false statements in loan applications in scheme to obtain money from mortgage lending institutions.. The investigation revealed that as part of the scheme and artifice to defraud, the defendants, through straw buyers, purchased a property by obtaining mortgage loans from a federally insured financial institution in amounts substantially exceeding the selling price of the property. The excess amount of the loan was kicked back to the defendants, and then they would default on payment of the monthly mortgage premiums. In order to ensure the approval of the loan, the participants created and submitted false supporting documentation along with the loan application including  financial statements, bank statements, employment verification letters and tax returns. Continue Reading…

Paul Watterson, 55, Mountainside, New Jersey, was sentenced to 15 months in prison for his role in a multi-million dollar mortgage fraud scheme that used phony documents and straw buyers to make illegal profits on over-developed condominiums in the Wildwood, New Jersey, area.  Watterson previously pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.

According to documents filed in this case and statements made in court: Continue Reading…

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.

ChieduGeorge” Chukwuka , 47, Stone Mountain, Georgia, was sentenced to serve nine years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80 in connection with his lead role in a mortgage fraud ring that spanned five years and caused millions in losses.  Chukwuka, along with his co-defendants and other co-conspirators, engaged in a massive property-flipping scheme resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011. Chukwuka pled guilty to conspiracy to commit wire fraud on August 10, 2015.

“At the height of the recent mortgage-fraud crisis, this property-flipping scheme caused scores of homes to fall into foreclosure, costing financial institutions millions of dollars in losses,” said U. S. Attorney John Horn.  “Many communities in our district have been decimated by mortgage fraud during the last 15 years and even now struggle to recover from the effects of these schemes.”

According to U.S.A. Horn, the charges and other information presented in court:  Chukwuka, along with his co-defendants and co-conspirators, recruited straw buyers to purchase homes at a discounted price, typically a bank-owned or distressed property.  The group then recruited a second straw buyer to purchase the same home at a dramatically inflated price. In turn, Chukwuka, his co-defendants and co-conspirators applied for an acquisition loan for the second straw buyer, supporting the loan application with false income, fake employment, and fraudulent net worth data.

The group profited from their scheme by pocketing the acquisition loan proceeds paid by the victim bank to the straw seller (who was the straw purchaser in the first transaction). The amount of profit was the difference between the price paid by the straw purchaser in the first transaction and the price paid by the straw purchaser in the second transaction, less transaction costs.  Since none of the straw purchasers made any significant loan payments, the targeted properties usually went into foreclosure, resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011.

The sentencing of Mr. Chukwuka brings to a close a lengthy investigation and prosecution of a criminal enterprise that targeted the banking industry through their prolific mortgage fraud schemes.  Mr. Chukwuka, considered by law enforcement and prosecution to be head of this enterprise, caused extensive damage with high loss amounts to those victim banks involved.  The FBI is pleased with the role it played in bringing about this sentencing to federal prison of Mr. Chukwuka as well as the previous sentencings of his co-defendants in this matter,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.

The following five defendants also pleaded guilty for their roles in the scheme, and were previously sentenced as follows:

  • Shelly Gee, a/k/a Shelly Baker, 48, Atlanta, Georgia, was sentenced on November 10, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $2,243,909.99. Gee pled guilty on June 17, 2015.
  • Sandra Petgrave, 43, Stone Mountain, Georgia, was sentenced on December 4, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,051,970.77. Petgrave pled guilty on August 18, 2015.
  • Kennedy Simmonds, 54, Snellville, Georgia, was sentenced on December 17, 2015, to three years, ten months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80. Simmonds pled guilty on July 6, 2015.
  • Marcelle Welch, 37, Stone Mountain, Georgia, was sentenced on December 17, 2015, to two years, three months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $2,554,189.25. Welch pled guilty on July 29, 2015.
  • Leah Freeman, 43, Atlanta, Georgia, was sentenced on December 17, 2015, to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,828.532.94. Freeman pled guilty on June 19, 2015.

The defendants were sentenced by U.S. District Court Judge Timothy C. Batten, Sr.

In a related case, Chinedum Oli, 42, Snellville, Georgia, was sentenced on February 19, 2013, by Senior U.S. District Court Judge Marvin H. Shoob to five years in prison, followed by five years of supervised release, and ordered to pay restitution in the amount of $4,373,281.63. Oli pled guilty on October 9, 2012.

The cases were investigated by the Federal Bureau of Investigation.

Assistant United States Attorneys Jamie L. Mickelson and Steven D. Grimberg prosecuted the cases.

 

Vera Kuzmenko, 45, Loomis, California and Rachel Siders, 40, Roseville, California, were found guilty by a federal jury after a 16 day trial of multiple counts of mail and wire fraud associated with their involvement in a mortgage fraud scheme that cost financial institutions over $16 million.

Vera Kuzmenko was also found guilty of witness tampering and money laundering associated with the scheme.

According to evidence presented at trial, from late 2006 through early 2008, the defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento, California, area. The defendants were responsible for securing more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. Records introduced at trial showed Vera Kuzmenko received millions of dollars and Rachel Siders received hundreds of thousands of dollars. Continue Reading…

Miguel LaRosa, 48, Elizabeth, New Jersey, pleaded guilty  in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud for recruiting straw buyers and submitting bogus loan applications as part of large-scale mortgage fraud scheme involving properties in northern New Jersey.

According to documents filed in this case and statements made in court: Continue Reading…

Jerrold Fowler, 31, was sentenced to two years in prison, three years of supervised release, and ordered to pay restitution of $3,786,815 and to forfeit $7,413,712 and Thursa Raetz, 40, Virginia, was sentenced to two years in prison, three years of supervised release and ordered to pay restitution of $3,099,224 and to forfeit $7,413,712.  Both recruited participants into a multi-year, multi-property mortgage fraud scheme in Roxbury and Dorchester, Massachusetts.    Continue Reading…

Edward Khalfin, 58, San Mateo, California was found guilty by a federal jury of 12 counts of mail fraud and 11 counts of making false statements on loan applications. Robin Dimiceli, 53, Brentwood, California was found guilty by a federal jury of six counts of mail fraud and six counts of making false statements on loan applications.  The convictions arise out of a builder bailout scheme that provided financial incentives to straw buyers to get them to purchase homes that developers were having difficulty selling

According to court documents, from August 2006 through May 2008, two brothers, Volodymyr Dubinsky, 56, formerly of Folsom, California, and Leonid Doubinski, 50, formerly of Copperopolis, California, built, developed, and sold real estate in Carmichael, California, Sacramento, California, and Copperopolis, California. As the real estate market declined, the brothers recruited family members, employees, and associates with good credit to act as straw buyers for residential properties. The Dubinsky brothers have not been apprehended and are fugitives thought to be residing in Ukraine. Continue Reading…