Attorney linked to FBI investigation suspended by FL Supreme Court

The Florida State Bar website states that The Daily Business Review  reported that attorney Gabriel Martin, who ran unsuccessfully for Miami-Dade public defender promising to clean up the office, has been suspended from practicing law after his firm was caught up in a federal real estate fraud investigation.

Last month, the Florida Supreme Court suspended Martin’s law license on an emergency basis as the FBI investigated an employee of Martin’s law firm. According to The Florida Bar’s petition to suspend Martin’s license, the attorney allowed an employee to complete almost 100 fraudulent real estate transactions, bringing millions of dollars into a trust account in Martin’s name. The Supreme Court required Martin to notify all his clients of his suspension, and ordered him to deposit all funds received from practicing law into a trust account to be overseen by the Bar.

Please click here to read the Supreme Court Order.

The report in the Daily Business News alleges that an employee of Martin, George Louis Garcia, was involved as closing agent in nearly one hundred fruadulent mortgage transactions.


Former police officer accused In real estate scam

The following November 1, 2006 press release from The Massachusetts State Ethics Commission’s Enforcement Division announced the issuing of an Order to Show Cause alleging that Somerville Police Officer Scott Trant violated the state’s conflict of interest law, G.L. c. 268A by attempting to purchase property from a person seeking police assistance in connection with the property. A public hearing will be scheduled within 90 days. Click here to view a video news report from WCVB-TV News in Boston, MA

According to the Order to Show Cause, on February 9, 2005, an Everett woman visited the Somerville Police Department and sought assistance from Trant, who was on duty, regarding her ex-husband. The woman told Trant about her ex-husband’s behavior and questionable mental state. The ex- husband was living in an illegal apartment in the basement of a dilapidated property that had been cited for code violations. The property, located at 21 Vernon Streetin Somerville, was owned in trust by the woman and her two children. The woman had agreed to have her ex-husband removed from the property and to correct any code violations as part of a January 2004 agreement with the Somerville Inspectional Services Division (ISD). She reported to Trant that she had considered selling the property and had rejected an offer of $100,000. Trant offered to purchase the house, which was assessed at $438,700, for approximately $200,000.

On February 9 and 10, 2005, Trant attempted to phone ISD to gain more information about the city’s action involving the house; contacted the psychiatric unit of Cambridge Hospital for “information about getting someone committed;” went to 21 Vernon Street to conduct a “welfare check;” and reported to Cambridge Hospital on the ex-husband’s condition. On February 11, 2006, the ex-husband was involuntarily committed to a psychiatric facility. On February 14, 2005, Trant discussed the ex-husband with caseworkers at Cambridge Hospital and the Department of Mental Health.

On February 23, 2005, Trant again offered by phone to purchase the house for $200,000. He had an attorney draw up a standard purchase-and-sale agreement and gave the agreement to the woman. After the Somerville Police Department began investigating Trant’s conduct regarding this matter, he increased his offer to $300,000.

Section 19 prohibits a municipal employee from officially participating in matters in which to his knowledge he, his immediate family or a business in which he is serving as a director has a financial interest. Section 23(b)(2) of the conflict law prohibits a public employee from using or attempting to use his position to secure for himself or others an unwarranted privilege of substantial value not properly available to similarly situated individuals. Section 23(b)(3) of the conflict law prohibits a public official from knowingly or with reason to know acting in a manner which would cause a reasonable person, having knowledge of the relevant circumstances, to conclude that anyone can improperly influence or unduly enjoy the public employee’s favor in the performance of his official duties.

The Commission has the authority to impose civil penalties of up to $2,000 per violation.


Florida woman arrested accused in real estate scam

The following article is taken from the Collier County Sheriffs Office website: On Oct. 26, investigators from the Economic Crimes Unit arrested Lorraine Afshari, 55, of 1090 Egrets Walk Circle, on seven warrants after an investigation into her mortgage company, Tuscany Mortgage and Investment Company.

It was discovered that Afshari would approach potential investors with the idea that they would invest money into her company, which would fund mortgages, and in return, the investors would receive a high interest rate on their return. She would issue the investors a promissory note or promise to issue one, which constitutes a sale of securities. Afshari does not have a license to sell securities or investments.

Afshari did not lend money to anyone for a mortgage. It was determined that each investor’s money was going to pay back earlier investors and pay operating expenses for the company. The total loss is $180,000.

The warrants served on Afshari were: scheme to defraud over $50,000, 2 counts of communications fraud, 10 counts of fraudulent transactions, scheme to defraud in connection with the sale of a security, engaging in a course of business to defraud, 10 counts of sale of unregistered securities and 10 counts of the sale of securities by unregistered issuer.


If anyone feels they may have been a victim of Afshari (pictured left), please contact Investigator. Tom Muscato at 239-774-8034.






Three indicted in Chattanooga mortgage fraud scheme

News Channel9 reports that three people, including two mortgage brokers, have been indicted in Chattanooga, TN on bank fraud charges relating to a mortgage fraud. It is reported that this indictment is part of a wider scheme involving at least 100 properties which is being investigated by the FBI and the US DOJ.

Those indicted are:

Darren Todd Moyer, a former principal of Baltic Mortgage Company
Phillip Howard McKinnish
, a partner at Baltic Mortgage Company
Jennifer Jewel Henson, an employee of Baltic and Moyer’s sister

nb. This company is not in any way related to Baltic Mortgage of Chicago, IL

They are charged that beginning in 2000 through to at least July 2004 they devised a flipping scheme to defraud Indymac Bank. The falsified details of down payments and inflated sales prices and supplied false HUD-1 closing documents. In addition they generated inflated fees, commissions and service charges.

The properties mentioned in the indictment are:
2104 Bennett St. Chattanooga, TN
2513 Wilder St. Chattanooga, TN
2508 East 17th St., Chattanooga, TN
1537 Lillian Lane, Chattanooga, TN
1713 Carson St.,Chattanooga, TN
211 Ridgewood Ave., Chattanooga, TN
2608 East Glass St., Chattanooga, TN

Please click here for a copy of the indictment.

Please click here to view a Video News report about the case from News Channel9.

This blog has learnt that 5 other people have been indicted as part of the wider fraud scheme. The details can be found in the entry below this one.


5 indicted in Tennessee based mortgage fraud

Court records show that the following people were indicted as part of a wider fraud scheme in the Chattanooga area. The latest details of the case can be found in the entry above this one.

Part 1. In September 2004 Angela Marie Byrd and Donavan Jean Barnes-Bass were indicted for Bank Fraud in relation to a mortgage fraud scheme. They were the owners of Executive Title Company in Chattanooga and were accused of creating false HUD-1’s and other documents for the closing of the two properties listed below.

169 East Side Drive, Whitwell, TN
4113 Sunbury Avenue, Chattanooga

On September 24, 2005 they were both sentenced to 18 months imprisonment followed by 3 years probation and were ordered to pay $191,000 in restitution. Click here for a copy of the indictment

Part 2. On July 25, 2006 Jay Ann Snyder, a mortgage broker, and Mark Estell Wilkins, a borrower,  were indicted on Bank Fraud charges and accused of being involved in the flipping of the properties listed below and falsifying sales prices and documentation.

3905 5th Avenue, Chattanooga, TN
3115 14th Avenue, Chattanooga, TN

Please click here for a copy of the indictment. The original trial date for both was set as October 16, 2006 but this was put back by 20 days. More will follow.

Part 3. On August 22, 2006 Kimberly Lynn Jones, a mortgage broker, was indicted with knowingly misrepresenting borrower downpayments, provided false documents and inflating property sales prices in relation to the properties listed below.

115 Freudenberg, Lane, Red Bank, TN
503 Arnold St. , Maryville, TN
205 South Moss Ave. , Chattanooga, TN
2923 Glenn Road , Louisville TN
1161 Stormy Ridge Dr., Soddy Daisy, TN

Please click here for a copy of the indictment.  On October 4, 2006 Jones pleaded guilty to count 1 of the indictment on the understanding that the other count would be dropped at sentencing.


Jefferson County DA announces arrest of 8 people in mortgage fraud case


In the following press release from Golden, CO - District Attorney Scott Storey announced on October 25, 2006 that in a joint effort of the Colorado Bureau of Investigations (CBI); U.S. Immigration and Customs Enforcement (ICE); U.S. Department of Housing and Urban Development (HUD); U.S. Postal Inspection Service, U.S State Department, the Jefferson County Sheriff’s Office and the District Attorney, seven men and one woman were arrested last night on suspicion of having provided forged documents to purchase FHA insured homes. These suspects are believed to have purchased homes using fraudulent citizenship and/or financial documentation.

These homes were sold by participants of a mortgage fraud ring operating in Jefferson County. Between July and September 2005, the District Attorney’s Office indicted ten people as part of that operation, following a lengthy investigation by the Gaming Division of the Colorado Bureau of Investigation. They were doing business out of the ReMax 100 Office in Lakewood, CO. In three separate indictments, the alleged illegal activity was the same: realtors, loan officers and sales agents were accused of working together to sell single-family homes to 256 persons who, because of their citizenship and/or financial circumstances, were not qualified for home loans.

According to the indictments, the defendants in the mortgage fraud ring were able to obtain loans for the unqualified buyers by creating false documents concerning the homebuyer’s identity, employment and credit history, showing that the unqualified homebuyers were in the US legally, and then submitting these false documents to legitimate mortgage lenders. They each earned commissions or other financial remuneration for each of the fraudulent house sales.

District Attorney Storey says, “The illegal activities involved in the sale and the purchase of these homes constitutes identity theft as well as mortgage fraud. All of the social security numbers used in these transactions belong to actual people. It is our job as protectors of the public trust to hold anyone who breaks the law accountable for their conduct.”

Those arrested include: (click on the name to view a picture supplied by the DA)

“Last night’s arrests resulted from the continuing, multi-agency investigation of a large scale operation of people who used fraudulent information to buy property. We expect additional arrests as the investigation proceeds,” said Bob Brown, CBI Agent in Charge of the investigation.

“To combat this type of crime, it’s critical that agencies work together to share information on such schemes as this,” said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. “ICE has created a local Document and Benefit Fraud Task Force composed of various agencies for this very purpose. It’s vital that the people who receive any such government benefit are positively identified. Otherwise, it’s the American taxpayer who may be required to pick up the tab for defaulted loans.” Copp heads a four-state area which includes: Colorado, Wyoming, Montana and Idaho.

All of the 191 houses involved were purchased using HUD-guaranteed loans. “This action is evidence of our continuing commitment to make sure HUD’s programs are administered in accordance with the law and are free from fraud and abuse. I would like to complement the staff at our Denver Homeownership Center who uncovered this abuse,” said Jereon Brown, HUD Deputy Assistant Secretary. “As much as we intend to expand the FHA program to help more families become homeowners, we will not do so at the expense of the financial integrity or reputation of the Federal Housing Administration.”

The suspects arrested last night are scheduled to have their first court appearance today at 10:00 in Courtroom 1B of the Jefferson County Courthouse.


Daily Updates - Monday 30, October 2006

The following older entries were updated today. Please click on the link to read them.

Kenneth McKinney sentenced in IN flipping case - plus indictment added to site

4 sentenced in Freeport, IL flipping scheme


Another charged in "Promise Land Mortgage" case

In the following press release Susan W. Brooks, United States Attorney for the Southern District of Indiana, announced on October 26, 2006 that JOHN WAGNER, 46, Indianapolis, Indiana, was charged with crimes related to mortgage fraud activities in which he participated from late 2000 to early 2002, when he lived in Indianapolis, Indiana. According to the Information filed today, WAGNER participated with other individuals in fraudulently obtained over $4,000,000 in loans from a Michigan lending institution by submitting false loan applications, fraudulent financial documents, and falsely inflated appraisals for the purpose of obtaining mortgage loans.

WAGNER was charged with one count of conspiracy to commit mail fraud and one count of money laundering. Today’ s charges follow an investigation by special agents of the Internal Revenue Service and the Federal Bureau of Investigation, working as part of the Southern District of Indiana Mortgage Fraud Task Force.

According to the charges, Romero Brice (who plead guilty in September of this year to related mortgage fraud charges) was the owner and licensed mortgage broker for Promise Land Mortgage, an Indianapolis mortgage brokerage business, between late 2000 and early 2002.

Brice located and obtained at fair market value (in the names of office employees or investors) properties in low income neighborhoods of Indianapolis. He then used “ investors” to repurchase the properties a very short time later at 3-4 times their fair market value. JOHN WAGNER was Brice’ s main recruiter of investors. WAGNER recruited numerous individuals to participate in the scheme, many of whom were relatives. WAGNER also held investor meetings at the business office he set up to perpetuate this scheme, and gave presentations to investors to convince them to participate in the scheme. WAGNER set up a company called Family Connections LLC, which was used by him to participate in and perpetuate the scheme.

The investors were encouraged by WAGNER to buy 3-4 properties at a time, for “no money down.” They were given $10,000.00 per property back at closing by Brice. WAGNER was generally given $1,000.00-2,000.00 by Brice to locate and bring in the investors. WAGNER was also instrumental in obtaining the false down payment monies “ fronted” for the second sales; WAGNER instructed investors to provide these monies, explaining that they were helping other investors by loaning them money to purchase properties. The investors who provided the down payments received their fronted down

payment plus $500.00 back at closing; WAGNER sometimes received additional monies from Brice subsequent to closing for obtaining the down payment monies. In addition, WAGNER provided the up-front money for the first (cash) sales on some occasions. After the second closing, WAGNER received this money back, plus several $1000.00 per property for providing the money. All of the fraudulent mortgages were obtained thru ABN-AMRO, a Michigan lender.

Brice submitted false loan packages to the lender to obtain the mortgages. Along with the fraudulent appraisals, the loan packages included false loan applications, showing that the investors had assets and bank account balances far in excess of what they had.

ABN-AMRO approved and financed at least eighty-three (83) loans, based upon the false documents submitted by Brice. WAGNER was directly involved in fifty-three (53) of these loans. The total amount of those 53 loans was approximately $2,666,400.00. The total amount of loss suffered by ABN AMRO on these 53 loans was approximately $1,753,600.00.

According to Assistant United States Attorney Susan Heckard Dowd, who is prosecuting the cases for the government, WAGNER faces a maximum possible prison sentence of 15 years and a maximum possible fine of $500,000.00. An initial hearing will be scheduled for WAGNER before a United States Magistrate Judge in Indianapolis.