Omaha real estate investors charged with mortgage fraud

In the following press release Joe W. Stecher, United States Attorney for the District of Nebraska announced that Gerald Williams, age 48, and Judith Williams, age 48, both of Omaha, are charged in a 25-count Indictment. Count I of the Indictment charges that beginning on or about January 31, 2005, and continuing to on or about October 15, 2006, Gerald and Judith Williams, both real estate investors, conspired to defraud mortgage lenders and title companies for their own personal gain. The scheme to defraud included preparing and submitting false and fraudulent documents and statements to various mortgage lenders that ultimately resulted in obtaining financing in order to purchase several residential real estate properties in the Deer Creek residential housing subdivision in Omaha, Nebraska. False statements were also prepared and submitted to mortgage lenders and title companies closing the loans in order for them to receive funds from the loan proceeds. The maximum penalty for this count includes imprisonment of not more than 5 years, a fine of $250,000, 3 years of supervised release, and a $100 special assessment.

Counts II-XIII charge Gerald and Judith Williams with mail fraud from beginning no later than on or about January 31, 2005, and through on or about October 15, 2006. It is alleged Gerald and Judith Williams used the United States Postal Service for the purpose of executing a scheme to defraud various mortgage lenders and title companies. The maximum penalty for these counts is imprisonment of 30 years, a $1,000,000 fine, 5 years of supervised release, and a $100 special assessment.

Counts XIV-XXV charge Gerald and Judith Williams with wire fraud from beginning no later than on or about January 31, 2005, and through on or about October15, 2006. It is alleged Gerald and Judith Williams transmitted interstate bank wires for the purpose of executing a scheme to defraud various mortgage lenders and title companies.The maximum penalty for these counts is imprisonment of 30 years, a $1,000,000 fine, 5 years of supervised release, and a $100 special assessment.



Denver real estate developer indicted in $3.8 million fraud charges

A Denver Grand Jury has returned an 11-count indictment against a local real estate developer accused of scamming nearly four million dollars from investors.

Jack D. Arbess (dob: 08-26-59) (pictured below) is charged with violating the Colorado Organized Crime Control Act (F2) and eleven counts of theft (F3).

The indictment alleges that Arbess, owner and President of Gulfstream Management Corporation, engaged in multiple racketeering activities between 2002 and 2007 resulting in the loss of $3,800,000 from a real estate development project called Eagle View LLC in Jefferson County. The charges further allege Arbess transferred Eagle View funds into his Gulfstream account and used the money for a variety of personal purposes.

Arbess has been released from custody on a $10,000 bond. He is scheduled to appear in Denver District Court, room 17, on June 23 at 8:30 a.m. for a status hearing.


Maryland builder who took money and failed to construct homes is charged

Attorney General Douglas F. Gansler announced today that the Home Builder Registration Unit of the Consumer Protection Division has filed charges against Altieri Enterprises, Inc. t/a Altieri Homes, Athlone, LLC of Columbia, Altieri Homes at Castle in the Woods, LLC, R & L Livezey, LLC, and Milltown, LLC of Columbia for failing to comply with Maryland’s Home Builder Registration Act, New Home Deposits Act, Consumer Protection Act, and Custom Home Protection Act.

The Home Builder Registration Unit suspended the registration of Athlone, LLC and charged each company and their principals, Greig Altieri, Daren Altieri, Frank Altieri, Todd Altieri, and Wendy Altieri with accepting payments from consumers in Howard and Harford counties and then failing to construct the homes, pay subcontractors, or refund payments made by consumers. The companies also failed to disclose to the Home Builder Registration Unit lawsuits filed by consumers and subcontractors concerning the companies’ building activities. The Unit is seeking injunctive relief, restitution, costs, damages, and civil penalties against the builder for the alleged violations of the law.

“The law in Maryland requires new home builders to honor their commitments to home buyers and properly use their deposits and payments,” said Attorney General Gansler. “My office will seek severe sanctions against builders who operate without being registered or fail to properly handle consumer deposits.”

Consumers who have had problems with homes built by Altieri Homes, Athlone, Altieri Homes at Castle in the Woods, R & L Livezey, Milltown or other builders should contact the Home Builder Regstration Unit at 410-576-6573 in Baltimore or toll free at 877-259-4525. Consumers can also email the Unit at homebuilder@oag.state.md.us. To determine if a builder is registered with the Unit, visit www.oag.state.md.us/homebuilder or contact the Home Builder Registration Unit by telephone.


Massachusetts Broker banned and fined over "repeated instances of fraud"

In the following press release Massachusetts Attorney General Martha Coakley’s Office announced that she has entered into a judgment with Leo H. Desire, Sr. resolving allegations over his role in repeated instances of mortgage fraud related to a Revere property. Under the terms of the Consent Judgment, entered late Friday afternoon by Suffolk Superior Court Judge Margaret Hinkle, Desire is permanently prohibited from acting as a mortgage loan broker or originator. In addition, Desire must pay $240,000 in restitution, disgorging monies he received as a result of the fraudulent transactions. He is also required to pay $60,000 in fees and penalties to the Commonwealth.

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On March 30, 2007, the Attorney General’s Office filed the lawsuit against Desire, Primary Mortgage Resource, Inc., and closing attorney Valerie Hanserd. The complaint alleges that together the defendants altered a deed from the Federal Home Loan Mortgage Corporation (a.k.a. “Freddie Mac”). Freddie Mac intended to sell the property at 60 Warren Street in Revere to Desire for $305,000, and prepared a deed to such effect. The complaint alleges that the defendants altered that deed by changing the purchase price of the property from $305,000 to $475,000, and by changing the name of the buyer from Desire to a straw buyer who had no intention of occupying the property or paying the mortgage obligations. The complaint also alleges that the defendants made these changes without Freddie Mac’s knowledge or approval. The complaint further alleges, as with this transaction and a prior transaction involving the same property, that the defendants provided false loan applications with falsified income verifications, and inflated appraisals of the property, which allowed them to obtain mortgage loans for straw buyers in sums greater than the property value supported. Additionally, the defendants allegedly drafted and submitted false HUD Settlement Statements to the lenders and then made and received improper disbursements from the fraudulently obtained mortgage loans.

The Attorney General’s Office announced last week that it had entered into a judgment with Valerie Hanserd regarding her alleged involvement in the 60 Warren Street transaction and an alleged foreclosure rescue scheme. A trial against the remaining defendant, Primary Mortgage Resource, Inc., commenced on June 5, 2009. Testimony in the case concluded on Thursday, June 11, 2009. Closing arguments have not yet been scheduled.

The Commonwealth continues to pursue claims against Desire and 17 other defendants regarding their participation in a foreclosure rescue scheme. In that case, the defendants allegedly conspired through their respective roles as mortgage brokers, real estate brokers, closing attorneys and straw buyers to deceive homeowners into selling their homes under the false promise of avoiding foreclosure and maintaining their homes and their homes’ equity. Trial in that lawsuit is scheduled to commence this fall.

These cases are being handled by Assistant Attorneys General Gillian Feiner and Amber Villa of Attorney General Coakley’s Consumer Protection Division, with the assistance Civil Investigators Nancy Ward and Quinton Dale and Paralegal Yolanda Kruczkowski.


Two indicted in Nevada foreclosure rescue fraud allegations

In the following press release Nevada Attorney General Catherine Cortez Masto announced the indictments of William Vargas and Michael Sinclair, on one (1) felony count of Theft of a Person 60 Years or Older and four (4) felony counts of Theft by Material Misrepresentation, for allegedly operating a foreclosure rescue scam in Las Vegas under the business name of Federal Housing Aid.

“Any individual who believes they can take advantage of the dire foreclosure market in the State of Nevada need to know they will be identified and prosecuted,” said Attorney General Masto. “Victimizing individuals who are desperately seeking a way to keep their property is the height of greed and cruelty.”

The indictment alleges that Vargas and Sinclair operated Federal Housing Aid since February 2007 offering loan modification services to assist victims in avoiding foreclosure on their homes. The Defendants allegedly charged the victims between $899 to $1500 in upfront fees and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be

The company is alleged to have solicited victims in Nevada from a call center in the Philippines. After paying for services, it is alleged that the Defendants failed to provide the services paid for and failed to provide refunds as promised in their advertisements. Defendant Michael Sinclair is believed to be at large after fleeing to the Philippines.

Collection of fees upfront for services promised for loan modification is in violation of Nevada Revised Statute 645D.400, which makes it unlawful for a mortgage consultant to collect or receive any compensation until after the consultant has fully performed the consulting services that was contracted to perform or represented that would be performed. The State alleges that the defendants failed to provide the foreclosure rescue services and failed to refund the victim’s money as promised.

The case was filed by prosecutors assigned to the Attorney General’s Mortgage Fraud Task Force, which was created by Attorney General Masto in early 2008 to address mortgage fraud scams throughout Nevada. The task force works closely with other State agencies, including the Mortgage Lending Division, to investigate and prosecute mortgage fraud crimes in Nevada.

A district court arraignment has been scheduled for William Vargas is set for June 23 at 9:00am in Las Vegas District Court Dept. 17. The indictment is not a determination of guilt or innocence, but is a finding of probable cause that a crime was committed. The defendants are presumed innocent until proven guilty.

Consumers who wish to report mortgage fraud are asked to contact the Attorney General’s Bureau of Consumer Protection in Las Vegas at 702.486.3194 to obtain a complaint form. Consumers with internet access may also obtain a Consumer Complaint Form, as well as other consumer protection and contact
information, on the Attorney General’s web site at www.ag.state.nv.us.


FinCEN clairifies guidance on information sharing

The Financial Crimes Enforcement Network today issued guidance to financial institutions intended to clarify the use of an important information sharing tool made possible by section 314(b) of the USA PATRIOT Act. The guidance clarifies the scope of permissible information sharing covered by the section 314(b) safe harbor. Section 314(b) permits participating financial institutions, upon providing notice to FinCEN, to avail themselves of a statutory safe harbor from civil liability for sharing information with one another to identify and report activities, such as mortgage fraud, that they suspect may involve possible terrorist activity or money laundering.

“Fraud generates dirty money,” noted FinCEN Director James H. Freis, Jr. “In order to be used by a criminal that money needs to be cleaned and integrated into the legitimate financial system. The more information bankers and brokers can share the more the integrity of our financial system will be protected and law enforcement can gain additional sources of valuable information.”

The privacy and security of any shared data is of paramount concern and financial institutions which participate in the section 314(b) information sharing program must maintain adequate procedures to protect the security and confidentiality of such information. Participation in the section 314(b) information sharing is voluntary and utilized at the discretion of the participating financial institution.


Con artist posed as his own deceased mother to in "theft" of townhouse

In the following press release Kings County District Attorney Charles J. Hynes today announced a 47-count indictment against two Brooklyn men charged in an elaborate fraud, which included the theft of a Park Slope townhouse, social security benefits, and social service payments, and involved one of the men, Thomas Parkin, dressing up as his deceased, 77-year-old mother to further the scam.

Charges against Parkin, 49, and Mhilton Rimolo, 47, include Grand Larceny in the First Degree, Two Counts of Grand Larceny in the Second Degree, Conspiracy in the Fourth Degree, multiple counts of Forgery in the Second Degree, Perjury in the First Degree, and Criminal Impersonation in the Second Degree.

Parkin                                          Rimolo

“These defendants ran a multi-year campaign of fraud that was unparalleled in its scope and brazenness,” said District Attorney Hynes. “I’d like to thank the Social Security Administration Office of the Inspector General and the Human Resource Administration for their assistance in this case. I’d also like to acknowledge the work of the prosecutors and Detective Investigators in my Rackets Division.”

“The type of fraud alleged in this complaint can only be properly addressed through the cooperative efforts of a joint criminal investigation, as demonstrated by this effort,” said John F. Grasso, Assistant Special Agent in Charge of the Social Security Administration’s Office of the Inspector General. “Our Office looks forward to continuing the successful partnership that has been developed over the past several years with the Brooklyn District Attorney’s Office. Our Office is not only committed to the pursuit of those who defraud SSA programs, but also those who misuse Social Security Numbers to commit financial crimes against other agencies.”

In the 1990s, Irene Prusik deeded her home, 492 6th Avenue, Park Slope, to her son, Thomas Parkin. At the time, Prusik, Parkin and Prusik’s other son lived in the building. Parkin was unable to maintain ownership, and in January 2003, the building was sold at foreclosure auction.

However, according to the indictment, after Prusik died, in September 2003, the two defendants began filing lawsuits against the new owner, Samir Chopra, in the now deceased Prusik’s name, alleging real estate fraud. They claimed that the deed Chopra had bought at auction was invalid and had actually been forged by Parkin, in the 1990s. The real owner, they claimed, was Irene Prusik.

The defendants received Prusik’s Social Security benefits every month for six years, totaling approximately $52,000, according to the indictment. They are also charged with receiving $65,000 in rental assistance from the city Human Resource Agency, claiming the deceased Irene Prusik was Parkin’s landlord and that he and his brother were unable to pay the rent because of a disability. Rimolo was listed as the property manager.

To initiate the crime, Parkin and Rimolo doctored Prusik’s death certificate, providing a false Social Security Number and date of birth, which made it appear as though she were still alive, according to the indictment. In order to perpetuate the ruse, the defendants went as far as to dress Parkin up as his deceased mother, and visit the Department of Motor Vehicles to renew her driver’s license, where, incidentally, they were captured on surveillance video (see below).

In June 2008, believing Prusik was alive, Chopra came to the Brooklyn District Attorney’s Office to report that he believed Parkin and Prusik had filed false affidavits, in the course of more than five years of lawsuits against him and various bankruptcy filings, to prevent him from evicting them for failure to pay rent for six years.

Coincidentally, unaware prosecutors had already begun an investigation into his actions, Parkin walked into the Brooklyn District Attorney’s Office in March of this year, to report to the new Real Estate Fraud Unit that he and his mother were victims. He claimed his mother was the rightful owner of the property and that the new owner had been using illegal forms of coercion and filing false documents in court filings against them, according to the indictment. Prosecutors also met with Rimolo, who identified himself as Prusik’s nephew.

To the investigators’ surprise, Rimolo and Parkin agreed to arrange a meeting with Prusik at the home on 6th Avenue. When prosecutors and detective investigators arrived, they found Parkin dressed as his 77-year-old mother, wearing a red cardigan, lipstick, manicured nails and breathing through an Oxygen tank.

An indictment is an accusatory instrument and not proof of a defendant’s guilt.

The case was investigated by Detective Investigator Third Grade Thomas Farley, Supervising Detective Investigator Shaun Winter, and Detective Investigator Second Grade Michael Seminara. George Terra is Assistant Chief Investigator. Joseph Ponzi is Chief Investigator.

The case is being prosecuted by Rackets Division Deputy Bureau Chief Dennis Ring and Assistant District Attorney Wojciech Jackowski. Financial Investigator Vincent Verlezza also worked on the case. Michael Vecchione is Chief of the Rackets Division.



Los Angeles man charged in bankruptcy frauds aimed at preventing foreclosure

In the following press release Thomas P. O’Brien, United States Attorney for the Central District of California, announced that a Los Angeles man was taken into federal custody last night on charges that he has been defrauding homeowners by falsely promising them that he could prevent foreclosures and evictions from their property.

Gilfert Welton Jackson, 64, was arrested without incident at a homeowner’s residence in Los Angeles yesterday by Los Angeles County Sheriff’s deputies and turned over to special agents with the Federal Bureau of Investigation. Jackson, a transient whose last known address was in Inglewood, made his initial court appearance this afternoon in United States District Court in Los Angeles, where he was ordered detained until he posts a $25,000 bond.

Jackson was indicted on June 4, and charged with six counts of making false representations and filing documents in bankruptcy proceedings in furtherance of a scheme to defraud. According to the indictment, which was unsealed after his arrest, Jackson’s scheme was designed to bilk distressed homeowners, as well as banks and other creditors by fraudulently obstructing lawful foreclosure and eviction actions.

The indictment alleges that Jackson falsely passed himself off as an attorney. Jackson allegedly told property owners and their tenants that he could prevent foreclosure and unlawful detainer and eviction actions in exchange for payments to purported non-profit organizations, including Silver Dollar Classic Foundation, Inc., and Herd Community Development Corporation. Jackson and others filed bankruptcy petitions to obtain an “automatic stay,” which under bankruptcy law prevents any action against the bankruptcy debtor and his property. Jackson created fraudulent notices of automatic stay that he gave to banks, their agents and others, including the Los Angeles County Sheriff’s Department, who were attempting to foreclose on properties and litigate unlawful detainer actions. In each such notice of automatic stay, Jackson fraudulently represented that the identified property was owned by a debtor in bankruptcy and was, therefore, subject to the automatic stay.

In addition to the banks and other creditors who were forced to delay taking possession of properties while they litigated the purported “automatic stay” in bankruptcy court, the indictment alleges that Jackson’s scheme victimized homeowners, who paid Jackson for his worthless services. According to the indictment, during the period of delay that Jackson caused, Jackson collected rent from third parties living in the properties based on the false representation that he was the rightful landlord of the properties.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.

The case against Jackson was referred to the United States Attorney’s Office by the Office of the United States Trustee, which is the component of the Department of Justice that oversees bankruptcy case administration and litigates to enforce the bankruptcy laws. “Protecting the integrity of the bankruptcy system is an important objective of the U.S. Trustee Program,” stated Peter C. Anderson, United States Trustee for the Central District of California (Region 16). “Our bankruptcy system is designed to provide honest people who have fallen on unfortunate times with a fresh start. Those who use the bankruptcy system to prey upon such people and others for their own financial gain undermine the fundamental purpose of the bankruptcy system and will be referred for criminal prosecution.”

Jackson was convicted of bankruptcy fraud in 1998 and sentenced to 63 months in federal prison. In 2006, the Bankruptcy Court for the Central District of California issued an order that forbade Jackson from filing any bankruptcy petitions or any other documents, without first obtaining Court approval to do so. If he is convicted of the six counts of bankruptcy fraud alleged in the indictment, Jackson would face a maximum statutory penalty of 30 years in federal prison.

The case against Jackson was investigated by the Federal Bureau of Investigation.