New York man arrested - accused of obtaining $5 million in fraudulent sale

In the following press release Lev L. Dassin, the Acting United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST JR., the Assistant Director-in-Charge of the Federal Bureau of Investigation’s New York Field Division (“FBI”), announced today that MARK M. BENUN was arrested this morning on a criminal Complaint charging him with interstate transportation of a portion of the proceeds from the fraudulent sale, for more than $5 million, of a building at 161st Street in the Bronx. BENUN was arrested this morning at his Manhattan home by agents of the FBI.

According to the criminal Complaint unsealed today in Manhattan federal court: In June 2006, BENUN and another individual purchased the commercial property located at 67-79 E. 161st Street, for approximately $9.5 million. Payment was made with $4.5 million in cash, contributed by BENUN’s co-purchaser, plus a $5 million mortgage in favor of the seller, to be paid by BENUN and his copurchaser.

BENUN and his co-purchaser later obtained an additional $700,000 mortgage from the seller; BENUN additionally obtained a $2 million loan from a bank, guaranteed by his copurchaser and secured by a further mortgage on the property.BENUN had a 25% interest in the property, and his co-purchaser held the remaining 75%.

In February 2009 BENUN, purporting to be the sole owner of the property, sold it for approximately $5.96 million to another buyer, who paid $4 million in cash and gave BENUN a note for the remaining $1.96 million. Shortly after the sale BENUN sold the note, discounted, for $1.46 million. To establish his
apparent sole ownership of the building, BENUN created false satisfactions of the three mortgages on the property, and a fraudulent transfer of ownership of his co-purchaser’s 75% interest in the property to him. BENUN persuaded a notary who works across the hall from him to notarize the forgeries, claiming that the individuals whose signatures were on the documents were stuck in traffic. Funds from the sale were traced to an account in the name of BENUN’s company, MBM1 Owners LLC. Approximately $150,000 of those funds have been identified as being wired from MBM1’s New York account to accounts out of state.

BENUN, 35, of New York, New York, is charged with one count of interstate transportation of stolen property, which carries a maximum sentence of ten years in prison and a fine of the greater of $250,000 or twice the gross gain or loss resulting from the crime.

Assistant United States Attorney CHRISTOPHER D. FREY is in charge of the prosecution. The charges and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent
unless and until proven guilty.


Oregon FBI and US Attorney announces expanded prosecution of mortgage fraud

The Portland office of the Federal Bureau of Investigation (FBI) and the U.S. Attorney’s Office today announced expanded efforts to identify and prosecute mortgage fraud. As part of a multi-agency approach, special internet and phone tip lines have been established to handle reports of mortgage fraud. Investigations will be handled by the Oregon Mortgage Fraud Working Group, which has been operating since 2007, and continues to tackle mortgage fraud on multiple fronts.

Since 2007 the U.S. Attorney’s Office in Oregon has brought charges or secured convictions in more than a half dozen major mortgage fraud cases resulting in sentences of up to 10 years in prison. These cases have been successfully investigated by the FBI, Internal Revenue Service, U.S. Postal Inspection Service, U.S. Secret Service, Oregon Department of Finance and Corporate Securities, and other federal and state law enforcement agencies. (See the list of the Oregon Mortgage Fraud Working Group member agencies below).

Virtually all mortgage fraud cases involve false representations on mortgage loan applications. The typical case involves falsification of income, liabilities or employment on a loan application, and often includes a fraudulently inflated property appraisal. The majority of the Oregon Mortgage Fraud Working Group investigators are working major cases involving multiple suspects, multiple borrowers, and millions of dollars in fraudulent loans.

U.S. Attorney Karin J. Immergut stated, “We need the public’s help to bring foreclosure scammers and mortgage fraudsters to justice. Needless to say, mortgage fraud hurts everybody.” “With the current economic climate, we know many people are hurting,” said David Ian Miller, Special Agent in Charge of the FBI in Oregon. “This makes people in our community vulnerable to false guarantees and frauds.”

The Oregon Mortgage Fraud Working Group also focuses on emerging crime trends that are associated with the growing tide of foreclosures:

Foreclosure Rescue Schemes

One of the biggest threats for consumers now is unscrupulous “foreclosure specialists.” These con-artists prey on desperate homeowners by persuading them to sign over the deeds to their homes to a “specialist,” who promises that the homeowners can stay in their homes, make “rent” payments, and eventually re-purchase their homes. In many cases, the “rent” payments, which are supposed to go to the mortgage company, are never sent. Instead, the “specialist” illegally retains the payments along with extra fees. The homes continue into foreclosure, and the homeowners suffer additional losses. In other situations, the “specialist” steals the equity in the home by re-financing it without the homeowner’s knowledge, fails to pay the new mortgage, and then the home ends up in foreclosure.

Homeowners must be alert to avoid scams and are urged to do business only with companies that they know are trustworthy. To see a list of housing counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) go to www.HUD.gov or contact the Better Business Bureau. Never transfer title to your property or give up personal information unless you are sure of whom you are dealing with.

Short Sales

A second area of concern growing out of the increased volume of foreclosures involves “short sales.” In a short sale scheme a buyer purchases a home with no intention of making payments. Often additional funds are included in the purchase loan for planned “improvements.” The buyer pockets that money. After a few months, the buyer informs the bank that the house will foreclose. The buyer presents a possible pre-foreclosure buyer who, unknown to the bank, is a part of the fraud. This second buyer offers to purchase the home at a price below the current loan amount. The lender agrees, unaware that the first buyer deliberately failed to make the payments in order to set up the short-sale situation. Sometimes the fraudulent buyers damage the house to further justify the lower offer. After the deal closes, the buyers repair the damage, get the home appraised at a higher level, and re-sell it for a profit.

Tip Line and Website

Citizens are urged to report any mortgage fraud activity or information by contacting one of the following:

Portland FBI’s website at http://portland.fbi.gov

Phone Tip Line: 503-273-5813

Email Tip Line: mortgagefraudtips.portland@ic.fbi.gov

For more details as well as tips on avoiding trouble or getting help if you are facing foreclosure, please see the FBI’s website at http://portland.fbi.gov.

The Oregon Mortgage Fraud Working Group includes the following agency members:

U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service, Criminal Investigation; U.S. Postal Inspection Service; HUD Office of Inspector General; Office of the Trustee U.S. Bankruptcy Court; Oregon Department of Justice; Oregon Division of Finance and Corporate Securities; Multnomah County District Attorney’s Office; Washington County District Attorney’s Office; Clark County Prosecuting Attorney’s Office; Portland Police Bureau; Vancouver Police Department, Clark/Skamania County Drug Task Force.


Leader of ID Theft ring sentenced to 14 yrs by New York judge

Lev L. Dassin, the Acting United States Attorney for the Southern District of New York, ANDREW CUOMO, the Attorney General of the State of New York, and RICHARD H. NEIMAN, the Superintendent for the New York State Banking Department, announced today that TAHIR ALI KHAN, the leader of a ring that used fake identification documents to bilk over 50 financial institutions out of more than $24 million, was sentenced today by United States District Judge LORETTA A. PRESKA to 14 years in prison. KHAN was indicted, along with 14 other co-defendants, in a multi-count Indictment unsealed on August 15, 2007.

Today’s sentence follows KHAN’s guilty plea on November 25, 2008, to a four-count Superseding Information charging him with one count of conspiracy to commit credit card fraud, one count of conspiracy to commit wire fraud and bank fraud, and two counts of aggravated identity theft.

As set forth in the Government’s sentencing submission and other public filings in this case, KHAN headed a ring that produced false identification documents in fictitious names. The documents, purporting to have been issued by state and federal government authorities, included driver’s licenses, resident alien cards, social security cards, and tax identification documents.

In order to build financial credit for the fictitious identities, members of KHAN’s ring, among other things, fraudulently established bank accounts, credit card accounts, apartment leases, and telephone and utility accounts in the names of the fictitious identities. Participants in the ring also applied for and obtained lucrative bank loans, home mortgage loans, increased credit card limits, lines of credit, and other financial benefits in the names of the fictitious identities or in the names of sham businesses supposedly operated by those fictitious identities. The loans and credit card debt were then defaulted on, resulting in millions in losses to numerous financial institutions. Losses from the ring’s fraudulent activities exceeded $24 million.

In sentencing KHAN to 14 years in prison, Judge PRESKA stated that KHAN had been involved in “a vast array of crimes, of frauds and thefts, extending well over a decade.” Judge PRESKA further noted that KHAN committed those crimes charged in the Superseding Information while a fugitive from justice. As set forth in the Government’s sentencing submission, after federal authorities arrested KHAN on August 15, 2007, they learned through a fingerprint match that KHAN had been previously arrested federally in 1995, in California, under the name “Jonathan Branscum,” but that KHAN absconded in that case after being granted bail. KHAN dropped the name “Jonathan Branscum,” and moved to the New York area, using a different name.

Judge PRESKA further stated that KHAN’s “entry into the United States was itself the subject of identity theft.” Count Three of the Superseding Information, to which KHAN pleaded guilty, charged KHAN with stealing the identity of a real person, “Waheed Khan,” in order to obtain a permanent resident card and other immigration benefits. In addition to the prison term, Judge PRESKA sentenced KHAN to three years of supervised release, restitution in the amount of $24,649,890.32, and forfeiture of items seized in August 2007 from KHAN’s homes in Alabama and New York.

Acting United States Attorney LEV L. DASSIN said this investigation is “a model of cooperation between federal, state and local prosecutors and investigative agencies.”

New York Attorney General ANDREW CUOMO said, “TAHIR ALI KHAN developed a comprehensive scheme to steal millions of dollars from an overburdened financial industry, and now he is paying for his crimes. My office will continue to aggressively pursue those whose greed supersedes their regard for the law in New York State.”

“We are pleased to have participated in this joint investigation and successful prosecution,” said RICHARD H. NEIMAN, Superintendent of Banks for the State of New York. “As this case demonstrates, law enforcement agencies will continue to work closely to aggressively pursue individuals who attempt to take advantage of our banking system. I commend the Banking Department’s Criminal Investigations Bureau staff for their work over the last four years on this matter.”

Of the sixteen defendants charged in the Indictment, KHAN, 32, most recently of Hoover, Alabama, is the twelfth defendant to plead guilty and the sixth to be sentenced. PRADIPT SHARMA was granted a deferred prosecution agreement. Criminal charges remain pending against four defendants, including MUHAMMAD SHARIF, ARIE BENSHIMON, SYED HASSAN, and SYED SHAH, who remains a fugitive. As to those defendants, the charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

The case is being jointly prosecuted by the U.S. Attorney’s Office and the New York State Attorney General’s Office. The prosecution resulted from a 16-month investigation conducted by the New York State Attorney General’s Office, the New York City Police Department, New York State Police, the Hoover, Alabama Police Department, and the New York State Banking Department, the Federal Bureau of Investigation, the Department of Homeland Security’s U.S. Immigration and Customs Enforcement, the United States Postal Inspection Service, the New York State Department of Motor Vehicles, the New York City Department of Probation, the Social Security Administration, and the United States Secret Service. Mr. DASSIN and Mr. CUOMO thanked those agencies for their assistance.

Mr. DASSIN praised the work of the Attorney General’s Office, the New York State Banking Department, and other state, local and federal law enforcement agencies in the investigation, stating that the indictment dismantled an extremely active and aggressive criminal ring that caused more than $24 million in losses to financial institutions in New York and other states.

Assistant United States Attorneys LISA ZORNBERG and ANNA ARREOLA, and Assistant Attorney General MERYL LUTSKY — who is designated as a Special Assistant U.S. Attorney in this case - are in charge of the prosecution.


Missouri AG adopts "zero tolerance" policy towards "mortgage deception"

Missouri Attorney General Chris Koster today announced his “zero tolerance” campaign against mortgage scams in Missouri, pledging he will “aggressively investigate any suspicion of mortgage deception and use all means in the legal system to prosecute and shut them down or end their deceptive practices.” As part of the “Zero Tolerance” campaign, the Attorney General today filed lawsuits against two businesses that sent misleading direct-mail advertisements for mortgage refinancing to consumers. These two lawsuits follow a similar lawsuit filed by Koster last week against a California-based mortgage broker doing business in Missouri.

The Attorney General filed suit against Goldstar Home Mortgage, which sent direct-mail letters to consumers with the consumers’ own bank name at the top of the letter, making it appear that the consumers’ bank was encouraging them to refinance. In addition, Goldstar marketed mortgage-refinancing products that were inappropriate for the homeowners they targeted. In at least one case, the business offered a loan that likely would have left a homeowner with a mortgage that was higher than the home was worth.

Attorney General Koster also filed suit against Oxford Lending Group, which made deceptive representations regarding the “Economic Stimulus Act of 2008” in its mailing to appear that consumers had a special opportunity to refinance, and using the HUD (U.S. Department of Housing and Urban Development) label and name to mislead the recipient that the letter was related to the federal government.

“This Attorney General’s office will have zero tolerance for any mortgage broker or refinancing lender that uses deception to lure consumers into doing business with them,” Koster said. “The Attorney General’s office will use all its powers to investigate and prosecute businesses that use deception and fraud in advertisements to Missouri consumers.”


Kansas City man pleads guilty to false loan application

In the following press release Marietta Parker, Acting United States Attorney for the District of Kansas announced that Michael J. Dean, 41, Kansas City, Kan, has pleaded guilty to one count of making false statements on a mortgage loan application and one count of money laundering.

In his plea, Dean admitted that on Jan. 7, 2008, he made false statements in an application for a loan to purchase a property in the 11000 block of Northridge in Kansas City, Kan. In his loan application, he did not disclose that in May 2004 he was sentenced to 71 months in federal prison and ordered to pay more than $113,000 in restitution after pleading guilty to one count of unlawful possession of a firearm after a felony conviction and one count of making false statements on a loan application. He also did not disclose a Feb. 24, 2004, order in Wyandotte County District Court to pay $15,030.

As a result, he obtained more than $243,000 in proceeds from the loan, which were transferred from People’s Bank to Capital City Bank. If he had disclosed the amount of money he owed in those cases, Peoples Bank would have rejected his loan application.

Sentencing is set for July 20, 2009. He faces a maximum penalty of 30 years and a fine up to $1 million on the mortgage fraud charge and a maximum penalty of 10 years and $250,000 on the money laundering charge.

Parker commended the U.S. Secret Service for its work on the case. Parker prosecuted the case.


Allen County and Indiana AG announce fraud warning system

The following is taken from the Allen County Recorders Office website:

According to the FBI, Property and Mortgage fraud is the fastest growing white-collar crime in the United States. Unfortunately, it has become all too easy for a criminal to record a fraudulent deed, making it appear as if they own your home. Once this step is complete, they can use your home as collateral on a mortgage or even attempt to sell your home to an unsuspecting buyer.

Although this type of crime is rare in Indiana, it is on the rise nationwide. The Allen County Recorder’s Office has taken a proactive step to provide you with one tool for staying ahead of criminals who prey on property owners.

Property Fraud Alert is an internet-based system that automatically alerts you via email or phone, each time a document that includes your name is recorded in the Allen County (Indiana) Recorder’s Office.

Here is the best part…The service is free. No strings attached. Click here for more information and to sign up.

Click here to answer your questions about the Property Fraud Alert system

What should I do if I get an alert from the PFA system?

[Ed. note - Other counties offer this service across the country and I cannot see any reason why anyone who has equity in a property would not want to sign up for it]


5 indicted in Virginia based ID theft and flipping scheme

In the following FBI press release it was announced that five individuals are accused of a mortgage scam fraudulently purchasing homes in Northern Virginia and profiting by using the mortgage proceeds to pay “home improvement” expenses and other payments totaling nearly $337,000.

Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Joseph Persichini, Jr., Assistant Director in Charge of the FBI Washington Field Office; and Gregory Campbell, Postal Inspector in Charge, U.S. Postal Inspection Service, Washington Division, made the announcement following the indictment and subsequent arrest of all alleged conspirators.

On April 15, 2009, a federal grand jury indicted Nelson C. Cardoza, age 37 of Ranson, W.V.; Victor A. Valdez, age 27 of Fairfax, Va.; Monica J. Lambert, age 30 of Gainesville, Va.; Liguia Abaunza Miranda, age 54 of Chantilly, Va.; and Erick G. Chavarria, age 35 of Manassas, Va., on conspiracy and wire fraud charges. Cardoza, Valdez and Lambert were each indicted on five counts and face a maximum penalty of 100 years in prison. Miranda was charged with four counts and faces a maximum of 80 years in prison, and Chavarria was charged with three counts and faces a maximum sentence of 60 years.

According to the indictment and other court documents, Cardoza provided names of two different people to purchase five different properties in the Northern Virginia region. These buyers did not know of or authorize the purchases but the conspirators used their names and Social Security numbers to apply for and obtain the mortgage financing.

Lambert, a real estate agent, prepared the sales contracts, and Valdez, a mortgage broker, prepared fraudulent mortgage applications, which falsified the income and assets of the buyers. Chavarria worked for Valdez and added the names of one of the buyers to his bank account so the buyer would appear to have the funds needed to qualify for the loan. Miranda, the mother of Lambert and mother-in law of Valdez, operated a tax preparation business and authored letters to substantiate the fake employment of the buyers as listed in the fraudulent mortgage applications.

The conspirators profited by using part of the mortgage proceeds to pay “home improvement” expenses to themselves, entities they controlled and their associates. These home improvement expenses were approximately $33,000 to $55,000 per house. Some of the conspirators also earned thousands of dollars in commissions on the sales. According to the indictment, the conspiracy resulted in a total of at least $336,957 in fraudulent proceeds. The properties involved in the scheme have been foreclosed upon, causing substantial losses to the lenders.

This case was investigated by the FBI and the United States Postal Investigation Service. Assistant United States Attorney Edmund P. Power is prosecuting the case on behalf of the United States.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.


Mortgage company and its owner plead guilty in "grow house" fraud

In the following press release the United States Attorney for the Western District of Washington announced that Jet City Mortgage, LLC and one of its owners and operators, Ha-Duyen Thi Le, a/k/a Holly Le, pleaded guilty today in U.S. District Court in Seattle to Conspiracy to Commit Wire Fraud and Money Laundering in connection with a mortgage fraud scheme. The company was first identified by law enforcement as part of “Operation Green Reaper” an investigation into large scale marijuana growing conspiracies in south King County. Financial investigation by Internal Revenue Service Criminal Investigation revealed the company had fraudulently obtained mortgage loans on many of the homes where marijuana grows were established. When sentenced by U.S. District Judge James L. Robart on July 6, 2009, LE faces up to 20 years in prison, fines of up to twice the amount of funds laundered or $250,000, and three years of supervised release. JET CITY MORTGAGE faces fines of up to twice the amount of funds laundered or $250,000 and a probationary period of up to three years.

According to the charging information and plea agreements, in 2005 and 2006, LE and her husband operated Jet City Mortgage. Le’s husband was a licensed mortgage broker and a licensed real estate agent. From the business’s office in Kent, Washington, LE conspired with others to falsify loan documents, allowing dozens of unqualified buyers to obtain mortgages and purchase one or more homes. When law enforcement began investigating garden supply stores that were providing equipment and advice to marijuana manufacturing rings, they discovered that many of the homes where marijuana grows were discovered were purchased using the services of Jet City Mortgage.

In their plea agreements,Jet City Mortgage and Le admit they falsified income and asset information, as well as documents purporting to verify that information, for borrowers seeking mortgages. Le conspired with the owners of three small businesses to provide false information to lenders who were attempting to verify the information in loan documents. These co-conspirators were paid a small fee each time they lied to the mortgage lenders. Jet City Mortgage collected fees and premiums both in the role of a mortgage broker and through LE’s husband’s work as a realtor. Financial records reveal Jet City Mortgage earned more than $230,000 from the scheme.

Many of the homes purchased through this scheme have now been foreclosed by the victim lenders. As part of the plea agreements, Jet City Mortgage will not attempt to keep the real estate and mortgage broker licenses which are being revoked by the State of Washington.

[Ed. note - The Washington Dept of Finance issued an order revoking Jet City’s license. Click here for a copy]

This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The financial investigation was conducted by the Internal Revenue Service Criminal Investigation (IRS-CI), and the Washington State Department of Financial Institutions (DFI). The drug case was investigated by the Drug Enforcement Administration, the South Snohomish County Narcotics Task Force (SSCNTF includes officers from Lynnwood Police, Edmonds Police, and Mountlake Terrace Police.), the Valley Narcotics Enforcement Task Force (VNET includes officers from the Kent, Renton, Auburn, and Tukwila Police Departments), the Seattle Police Department, Washington State Patrol, Port of Seattle Police, and King County Sheriff’s Office.

The case is being prosecuted by Assistant United States Attorney Sarah Vogel.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.