4:24PM

Woman sentenced for taking downpayments for home she did not own

Westchester County District Attorney Janet DiFiore announced that Catherine Martino (DOB12/07/64) of 1940 Deer Park Avenue, Deer Park, New York, was sentenced today to 21/2 to 5 years in state prison on two counts of Grand Larceny in the Third Degree. Additionally, as a condition of her sentence, judgment orders were issued for the full amount of the thefts.

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Over a two month period from December 10, 2004 to February 3, 2005, the defendant defrauded three potential purchasers of a total of $52,250 by falsely representing herself to be the owner and seller of a property located at 339 South Fifth Avenue in Mount Vernon, New York.

On December 10, 2004, she received a down payment check in the amount of $11,750.00 from one prospective purchaser. On January 26, 2005, she received a down payment of $18,000 from another interested party for the sale of the same house. Martino defrauded a third unsuspecting victim on February 3, 2005, by taking a $22,500 check as a down payment.

District Attorney DiFiore said, “This defendant repeatedly misrepresented herself as the owner of a house defrauding a number of unsuspecting buyers. Although her greed will be rewarded with a term in state prison, her actions should alert prospective purchasers of property to the pitfalls of not carefully and methodically vetting the seller before handing over any money.”

Assistant District Attorney Gwendolyn Galef of the Economic Crimes Bureau prosecuted the case. Click here for the complete press release

4:16PM

Collections manager sentenced, stole $249,000

In the following press release United States Attorney Carol C. Lam announced that Maria De Lourdes Navarro was sentenced today in U.S. District Court in San Diego by the Honorable Marilyn L. Huff to serve 30 months in federal custody, based on Navarro’s conviction for bank fraud.

According to court papers, from December 1998 to January 2003, Navarro was a Collections Operation Manager in the San Diego office of GreenPoint Credit Corporation (“GreenPoint”), an operating subsidiary of GreenPoint Bank, a federally-insured savings bank. Navarro’s duties at GreenPoint included responsibility for collecting deficiencies on foreclosed mobile home mortgages. As part of her guilty plea last year, Navarro admitted that, during the fall of 2001, she began illegally diverting to her personal use money that she was collecting on GreenPoint’s behalf. She accomplished this diversion by virtue of her ability to negotiate settlements of outstanding mortgage balances with GreenPoint’s customers and her ability to manipulate GreenPoint’s books.

Specifically, Navarro admitted that she falsely represented to GreenPoint customers that their mortgage obligations could be satisfied by a drastically reduced lump sum payment. She directed the payments to a collection agency, which then converted part of the payments to cashier’s checks payable to Navarro or her creditors. Navarro admitted that she then covered up this fraud in GreenPoint’s books by falsely representing that certain outstanding balances had been paid or that certain accounts were in litigation (or were being monitored by the legal department) and that no contact should be made with the account holders. Navarro admitted that, through this scheme, she defrauded GreenPoint of approximately $249,000.

In addition to the 30-month sentence, Judge Huff ordered that Navarro serve a five-year term of supervised release following prison. Judge Huff also ordered that Navarro pay $249,000 in restitution to GreenPoint. Judge Huff ordered Navarro to surrender to federal custody on or before July 14, 2006.

United States Attorney Lam stated, “Navarro used her position of trust to take advantage of her employer and her customers. Her lengthy prison sentence is well-earned and well-deserved.”

2:39PM

Two convicted in real estate fraud, nearly $500,000 in fines

In the following press release it was announced that The Los Angeles County General Fund has been paid more than $499,000 in fines from a real estate fraud prosecution against a mother-daughter-son team working in the San Fernando and Santa Clarita valleys, the Los Angeles District Attorney’s Real Estate Fraud Unit announced today.

The fine, which was paid yesterday as part of the case disposition, came after the defendants pleaded no contest in San Fernando Superior Court. As part of their fines, the defendants also paid $46,056.60 to the Sheriff’s Department and $12,061.03 to the District Attorney’s Office to cover costs of investigation and prosecution of the case.

The defendants pleaded in April and were sentenced. The mother was sentenced to a four-year state prison term. Her son and daughter were placed on supervised probation and given credit for time already served in the county jail. During their 2-1/2-years on probation, the defendants cannot work in the real estate business.

Deputy District Attorney David Fleck of the Real Estate Fraud Unit said Joyce Vachon, 66, worked as a real estate loan processor for several real estate brokers in the area. Her daughter, Jeanne Vachon, 44, was an underwriter for a real estate lending firm, while the son, Henry, 43, invested and resold real estate.

Fleck said the defendants profited from the rising real estate market illegally by using “straw buyers” to purchase property, then “flipping” the homes to make a profit. Straw buyers are people with good credit whose names are used - sometimes without the person’s knowledge - to buy property. Flipping, which is the resale of the property to make a profit in a rising real estate market, is not illegal unless fraud is involved, the prosecutor added.

A fourth defendant in the case, a “straw buyer” used by the defendants to acquire property, pleaded to misdemeanor charges and was placed on summary probation after a 180-day jail term.

When Fleck filed the case earlier this year, he alleged that it was an aggravated white collar crime. If the aggravated white collar crime is found to be true, the law mandates that fines generated from certain fraud cases be paid directly to the county, the prosecuting agency and the investigating agency.

Fleck said when the defendants pleaded no contest, they also admitted they committed a fraud and a pattern of related felony conduct to take more than $500,000. This brought into play the aggravated white collar crime enhancement.

The prosecutor said Joyce Vachon pleaded no contest to grand theft and forgery charges. Her son and daughter pleaded no contest to grand theft and money laundering charges.

12:50PM

Woman arrested, alleged to have forged signature to get $235,000 loan

In the following press release from San Bernardino, CA it was announced that investigators from the San Bernardino County District Attorney’s Real Estate Fraud Unit arrested Jennifer Lehnen 43, of Apple Valley, on Tuesday, June 6, 2006. Lehnen was arrested at her residence in the City of Apple Valley for forgery and filing a forged document with the County Recorder’s Office, both felonies.

In March 2004, Lehnen allegedly forged the victim’s name on a Grant Deed and took out a loan against the property for approximately $235,000, without the victim’s knowledge. Lehnen was booked into the Victor Valley Detention Center where her bail is set at $75,000. 

Click here to see the press release

4:57PM

Dayton man pleads guilty in mortgage fraud

In the following press release the FBI in Dayton, Ohio announced that Ronald A. Waker, age 42 of 7181 Tarryton Road, Dayton, Ohio pled guilty in United States District Court here today to one count of conspiracy to commit money laundering for his role in a mortgage fraud scheme. Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, and Cromwell A. Handy, Special Agent in Charge, Internal Revenue Service Criminal Investigation,on behalf of the Greater Dayton Mortgage Fraud Task Force, announced the plea entered today before Senior United States District Judge Walter H. Rice. Click here for the indictment

“Waker took part in approximately 148 separate fraudulent real estate closings between July 1999 and December 2001,” Lockhart said. “Such actions eat away at the foundation of our community’s housing market and the neighborhoods involved.” Lockhart noted that the gross fraudulent loan amounts associated with these closings amounted to approximately $9,378,880.

According to a statement of facts filed with his plea, Waker and others prepared and submitted mortgage loan applications containing false and fraudulent documents including bank statements, deposit slips, property appraisal reports and other documents.

Waker’s role including selling various residential properties located in or near Dayton under the name of purchasers who were not the real buyers and providing down payment money to fraudulently secure mortgage loans.

Waker faces up to 20 years imprisonment and a fine of $500,000 or twice the value of the property involved, which ever is greater. Judge Rice will set a date for sentencing.

Lockhart commended the Internal Revenue Service’s Criminal Investigation Division, U.S. Postal Inspection Service, the Federal Bureau of Investigation, Ohio Attorney General Jim Petro’s Office, and the Ohio Department of Commerce along with the agencies named above. All are members of the Greater Dayton Mortgage Fraud Task Force.

For additional comment contact Fred Alverson, Public Affairs Officer at 614.469.5715. The Internet address for the homepage for the United States Attorney’s Office for the Southern District of Ohio is www.usdoj.gov/usao/ohs.

4:49PM

2 indicted in mortgage case

The following is reproduced from an article by Mike Boyer which ran in the Cincinnati Enquirer.

The owner and an employee of a West Chester real estate title company were indicted Wednesday by a federal grand jury in Cincinnati in a no-money-down mortgage scheme uncovered in an ongoing federal fraud investigation. Stephanie Corsmeier , 29, of West Chester, owner of American Security Title Co. on West Chester Road, and Stacey Lester, 29, of Loveland, a disbursement clerk for the firm, were each indicted on 11 counts of bank, mail and wire fraud and conspiracy to money launder.

Corsmeier and Lester conspired with others to defraud out-of-town lenders by submitting false loan documents in violation of federal law, according to the indictment. Ben Dusing, assistant U.S. attorney, said the indictment grew out of the federal probe into mortgage fraud in the “flipping” of low-priced real estate for profit. More than 3 dozen individuals have either been indicted or pleaded guilty to charges in the investigation.

Click here to read the indictment

Corsmeier and Lester worked primarily with Clarence Harris and Ike Bronson, according to the indictment, and recruited homebuyers looking to purchase with no money down. Harris and Bronson previously pleaded guilty to charges in the mortgage fraud investigation, Dusing said.

Relying on false loan applications, out-of-town lenders would wire loan proceeds to American Security Title calling for down payments from the buyers. Then, either Corsmeier or Lester would issue a check from a portion of the proceeds to one of their co-conspirators, who would deposit it in a bank account and immediately withdraw it in the form of a cashier’s check or other instrument to be used at the property closing as the down payment, the indictment said.

The scheme, investigated by the FBI and IRS, enabled American Security Title to generate more business volume from title fees, the indictment said. The indictment listed 42 real estate transactions from January 2002 to the end of 2004, which Dusing said was “just the tip of the iceberg” involving the title firm.

Corsmeier and Lester could face up to 30 years in prison on the bank fraud charges. They couldn’t be reached for comment, but are expected to answer the charges at a later date.

4:22PM

Brokers licence revoked by Georgia Dept of Banking and Finance

In the following press release, dated June 19, 2006 from Atlanta, GA the Georgia Department of Banking and Finance’s (“Department’s”) announced its decision to revoke the mortgage broker’s license of Universal Holdings Associates, LLC, license number 13849, formerly located at 102 Oglethorpe Professional Court, Suite 9, Savannah, Georgia 31406, became final.

This notice of intent to revoke license was issued by the Department after it obtained evidence that Universal Holdings Associates, LLC made false statements or misrepresented material facts to a lender, employed a convicted felon, failed to notify the Department of a change in ownership of the business within 30 days, made false statements or misrepresented material facts to the Department, and failed to properly maintain a loan transaction journal.

In conjunction with the issuance of this notice of intent to revoke, the Department issued cease and desist orders to Tanya Jackson and Keith Cole of Richmond Hill, Georgia. These cease and desist orders became final on June 14, 2006.

Click here to read the press release. 

4:14PM

AZ DFI Revokes Escrow Agent’s License and Removes Escrow Officer

In the following press release The Arizona Department of Financial Institutions (“DFI”) Superintendent Felecia Rotellini announced that DFI has revoked the license of an escrow agent involved in several fraudulent loan transactions. The Superintendent has also issued an order prohibiting a former employee and escrow officer from working within the financial services industry.

First Financial Title Agency of Arizona (“First Financial”) and its president, Tom Paschen, were fined $20,000.00 and $10,000.00, respectively, for knowing violations of the laws regulating escrow agents in Arizona. First Financial’s license was revoked because of its violations of statutes regulating escrow agents and because of its unsafe financial condition. In 2002 and 2003, First Financial’s former escrow officer, Victoria Cervantes, facilitated a series of fraudulent loan transactions for the benefit of real estate agents, Carmen Cantu and Betty Barbee.

DFI’s investigation focused on loan files in which Ms. Cervantes knowingly notarized false documents and signatures, used a family member as a fraudulent buyer in one transaction, caused the unauthorized disbursements of loan proceeds, and facilitated the closing of loans with straw or fraudulent buyers. After a multi-day administrative hearing, Administrative Law Judge Daniel Martin concluded that the evidence of Ms. Cervantes’ conduct, as an employee of First Financial, clearly proved that First Financial violated the statutes establishing its fiduciary duties to its customers and its responsibility to ensure proper accounting of escrow funds and to ensure against errors and fraud. Judge Martin also found that First Financial failed to maintain proper internal controls to operate its business in a lawful manner.

In addition to the imposition of a civil money penalty, First Financial was ordered to pay DFI’s remaining examination fees of $23,000.00. DFI’s extensive examination of First Financial commenced after receiving a complaint from a woman who lost her home through one of the fraudulent transactions and additional information from the Arizona Attorney General’s Office and the Arizona Department of Real Estate. The three agencies worked together to trace Ms. Cervantes’ activities, resulting in the administrative action against First Financial and the ultimate indictment and conviction of Ms. Cervantes, the real estate agents, and a loan officer.

In a separate administrative action brought by DFI, Ms. Cervantes, who is now a convicted felon, was removed from the escrow industry and the Superintendent’s final order prohibits her from working in the escrow business. By law, as a result of the final order against Ms. Cervantes, she may not be employed by any financial institution or enterprise regulated by DFI, without the Superintendent’s prior approval.

The Superintendent has the statutory authority to remove, suspend or prohibit a person from participating in the business of a regulated entity if found to be unfit, dishonest or convicted a crime involving fraud and deceit. “The statute is designed to weed out the worst actors and help our licensees police themselves through notice of the prior bad conduct,” says Superintendent Rotellini. “We expect our licensees to operate their businesses with sufficient quality controls to discourage and discover fraudulent conduct. We also know that it is difficult to detect fraud amongst employees and so we are doing everything we can to hold the individuals accountable as well.” Additional removal actions are planned and DFI is focusing more of its resources on the examination and investigation of mortgage fraud.