The following cases were updated today, click the headlne for the full entry.
In the following press release Ohio Attorney General Marc Dann and Franklin County Prosecutor Ron O’Brien today announced the indictment of LARRY CORNA and ALAN CSIPKE by the Franklin County Grand Jury.
Both were indicted for their roles in falsifying loan documents associated with the sale and mortgages of three Franklin county properties and one Ottawa county property.These indictments are part of a continuing crackdown on mortgage fraud by Attorney General Marc Dann’s Ohio Organized Crime Investigations Commission in cooperation with county prosecutor’s offices and local, state, and federal law enforcement authorities.
“These cooperative efforts by law enforcement agencies are imperative to our fight against mortgage fraud,” said General Dann. “I’m proud of their efforts and encourage other law enforcement agencies to join forces to combat these crimes and help rid Ohio of mortgage fraud.”
Larry Corna, (pictured below left) age 52, of Columbus has been associated with a number of companies in the Columbus and Upper Arlington area, including Merchants Financial, Mortgage Services Inc., and Unique Construction.
Alan Csipke, (pictured below righ) age 29, of Columbus obtained loans for the properties. Both Corna and Csipke are reported to have conspired to obtain inflated mortgages on the properties in order to obtain monies from the loan proceeds under false pretenses. Investigators identified forged appraisals and other loan documents which allowed Csipke to purchase the properties.
Charges include multiple counts of theft, money laundering, and engaging in a pattern of corrupt activity.
The Upper Arlington Police Department spearheaded the investigations of these cases a part of the Central Ohio Mortgage Fraud Task Force. The task force is led by the Columbus Division of Police, Economic Crime Unit. Other task force members include detectives from the Upper Arlington Police Department, Investigators from the Ohio Attorney General’s Office, the Franklin County Prosecutor’s Office, the Delaware County Prosecutor’s Office, the Ohio Department of Commerce, the Ohio Department of Insurance, and agents from OIG for Housing and Urban Development, US Postal, and Immigration and Customs Enforcement.
NOTE: Mortgage fraud may be defined as any crime committed in the context of a mortgage transaction. Mortgage fraud is considered one of the contributing factors to the high foreclosure rate in the state of Ohio.
In a press release Ohio Attorney General Marc Dann announced a nine count indictment of two individuals from Illinois charged with defrauding local financial institutions. Albert Pliner, 35, and Janna Pliner, 45, of Cook County, Illinois are charged with Securing Writings by Deception, Money Laundering, and Theft for their role in a mortgage fraud scheme. Arrest warrants were issued in connection with this indictment for both defendants.
The Pliners purchased a Canal Winchester home in February 2005 and executed the scheme in May of 2005. The Pliners used the equity in their $290,000.00 residence to secure mortgages and home equity loans from 5 separate financial institutions on the same day. At the closing on each loan, the Pliners certified on four of the loans that there were no other liens or encumbrances on the property.
As the result of this scheme, the Pliners obtained loans and equity credit line advances from the financial institutions in amounts ranging from $100,000.00 to $280,000.00. The total intended loss in fraudulent mortgages as the result of this scheme is close to a million dollars.
“The scams carried out by this couple undermines everything the American Dream is supposed to encompass when buying a home. These con-artists came in to one of our communities to wreak havoc on our neighborhoods and rob our local lending institutions,” said Attorney General Marc Dann. “With the cooperation of local authorities and the Franklin County Prosecutor’s Office, I will continue to protect Ohioans from this kind of illegal activity, and I will continue to crack down on mortgage fraud criminals.”
This case is part of an ongoing effort by the Central Ohio Mortgage Fraud Task Force, which is led by the Columbus Division of Police Economic Crime Unit. This task force was commissioned by Attorney General Marc Dann’s Ohio Organized Crime Investigations Commission in 2006 to combat mortgage fraud in the central Ohio area. Task Force agency members include:
• The Columbus Division of Police, Economic Crime Unit
• Investigators from the Ohio Attorney General’s Office
• Upper Arlington Police Department
• Franklin County Prosecutor’s Office
• Delaware County Prosecutor’s Office
• Ohio Department of Commerce
• Ohio Department of Insurance
• The Office of Inspector General for Housing and Urban Development
• US Secret Service
• Immigration and Customs Enforcement
An indictment is a charging instrument, as any person who is indicted is presumed innocent until proven guilty.
Baptiste used the property at 600 St. Marks Place in Crown Heights to defraud several mortgage companies. He repeatedly recruited acquaintances to pose as purchasers and allow their credit to be used in order to obtain mortgages in their names. These individuals were merely straw buyers and Baptiste, in fact, retained control of the property and resold it several times at inflated values, thus realizing a profit. For their participation in the scheme, straw buyers received a payment from Baptiste.
Between June 1 and October 29, 2003, Baptiste arranged to obtain a $512,000 loan from US Mortgage property and purchase the property. The straw buyer earned $10,000; Baptiste earned $69,000. In 2003 and 2005, Baptiste again arranged for the fraudulent sale of the property at inflated values, thus obtaining several additional fraudulent mortgages, totaling $1.5 million.
The case was prosecuted by Assistant District Attorneys Michael Ryan and Laura Neubauer. Michael Vecchione is Chief of the Rackets Division.
In the following press release U.S. Attorney for the District of New Jersey, Christopher J. Christie announced that federal prisoner originally from Philadelphia and another man were indicted today for allegedly running a wire fraud and money laundering scheme that involved misdirecting approximately $2 million in wire transfers from Cendant Mortgage Corporation to a Florida title agency.
The nine-count Indictment describes a scheme in which Reginald Greene, 47, a.k.a. “Amin,” a federal prisoner at the time of the crime, and an unidentified Cendant Mortgage Corporation insider(s), attempted to cause 15 wire transfers that Cendant directed to Sunbelt Title Agency to be misdirected to banks accounts controlled by their co-conspirators, including Greene’s co-defendant Michael Umali, 38, a.k.a.“Khadafi,” of Oxon Hill, Md. Seven of the 15 wire transfers, totaling approximately $845,000, were successfully misdirected.
Greene, Umali and other unindicted co-conspirators, including relatives and associates, then allegedly laundered the proceeds of the seven successfully misdirected wire transfers by moving the funds through various bank accounts, cashing checks made out to “cash,” and purchasing expensive items. During the laundering phase of the crime, Greene
escaped from federal prison in Atlanta, Ga., where he was serving a 13-year prison sentence for a bank fraud.
According to the Indictment, the funds being transferred represented the proceeds of 15 residential mortgage loans and were intended to pay sales prices and closing costs totaling approximately $2 million.
According to the Indictment, from July 2003 until January 2004, Greene devised and operated the scheme to defraud Cendant, now known as PHH Mortgage. The Indictment alleges that Greene conspired with an unidentified individual(s) who had access to the operations software system of Cendant. With the ability to access the software system, the unidentified individual(s) allegedly altered the wire transfer instructions within the software system to misdirect funds that were intended to be wire transferred to Sunbelt Title Agency, which has locations throughout Florida.
As a result, the funds were wire transferred to the accounts of Umali and Dan Hutchinson Jr., 28, of Washington, D.C., instead of Sunbelt Title Agency. Thereafter, the funds were transferred to the control and benefit of Greene, the unidentified individual(s), and their associates and relatives, including Greene’s son, Reginald Greene, Jr., 27, a.k.a. “Duane Massey” of Upper Darby, Pa.
Hutchinson and Green, Jr., have pleaded guilty to their roles in the scheme and await sentencing. Greene and Umali were in federal custody prior to being indicted and will be arraigned on the Indictment when the case is assigned to a U.S. District Judge. During the time period covered in the Indictment, Greene was an inmate and an escapee from a federal correctional facility in Atlanta. Greene was captured and returned to prison to continue serving his unrelated prison sentence. Umali was serving a term of supervised release at the time the alleged offenses were committed. Umali and Greene met while they were serving prior prison terms. Umali was recently arrested on a violation of supervised release for allegedly committing the offenses contained in the Indictment.
Greene is charged in Counts One through Seven of the Indictment with wire fraud, which carries a maximum penalty of 20 years in prison and a fine of $250,000 or twice the aggregate loss to the victims or gain to the defendants. Greene and Umali are charged in Count Eight of the Indictment with conspiracy to commit money laundering, which carries a maximum penalty of 10 years in prison and a fine of $250,000 or twice the aggregate loss to the victims or gain to the defendants. Count Nine charges both defendants with money laundering, which carries a maximum penalty of 10 years in
prison and a fine of $250,000.
In determining an actual sentence, the judge to whom the case is assigned would, upon a conviction, consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant’s criminal history, if any, and other factors. The judge, however, is not bound
by those guidelines in determining a sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time. Despite indictment, each of the defendants is presumed innocent unless proven guilty beyond a reasonable doubt.
Christie credited Special Agents of the FBI’s Trenton Resident Agency, under the direction of Special Agent in Charge Weysan Dun in Newark, with the continuing investigation. The Government is represented by Assistant U.S. Attorney Ronald Chillemi of the Criminal Division in Camden.
In the following press release from Columbus, OH it was announced that a federal grand jury here has returned a 68-count indictment charging nine people with conspiracy, tax evasion, wire fraud, bank fraud and money laundering for their roles in a mortgage fraud scheme that involved more than 500 pieces of property and more than $25 million in mortgage loans in the central Ohio area between 2003 and 2006.
Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service Criminal Investigation, and J. Mark Batts, Acting Special Agent in Charge, Federal Bureau of Investigation, announced the indictment returned late yesterday.
The indictment alleges that the defendants conspired to exaggerate the value of real estate properties in and around Columbus, Ohio, both to lending institutions and to prospective purchasers. The prospective buyers had been recruited largely because of their relative ignorance regarding real estate business and investment practices.
The defendants allegedly used fraudulent documents to misrepresent the credit worthiness of those purchasers to lending institutions in order to get the institutions to approve excessive mortgage loans secured by the inflated-value properties.
The indictment charges:
DONALD F. GREEN , age 48, of Columbus. Green sold rental properties he owned as part of the scheme.
SHAWN A. GRIFFIN , age 37, of Cleveland, a real estate investor who recruited unwitting buyers.
GEORGE T. “Terry” JORDAN , age 50, of Canal Winchester, a licensed real estate agent who helped arrange the sales.
ARYEH M. SCHOTTENSTEIN , age 33, of Oak Park, Michigan, real estate investor who helped recruit individual and organizational investors.
JEFFREY M. LIEBERMAN , age 56, of Bexley, real estate appraiser who helped prepare exaggerated appraisals of the properties.
DWAYNE L. CARTER , age 37, of Columbus, loan officer who helped arrange the sales.
JONATHAN L. BOYD , age 38, of Columbus, loan officer who helped arrange the sales.
JAMES DARNEIL GAITHER , age 37, of Columbus, appraiser who helped prepare exaggerated appraisals of the properties.
KENYATTA JOHNSON , age 37, of Michigan, loan officer with ABN AMRO who helped arrange the sales.
A typical pitch used to lure prospective buyers would be to tell them they could buy property with no money down and, in fact, that they would receive money back at closing. They would also be told that they would not be responsible for monthly payments and that repairs would be made to the property without costing them anything.
The defendants allegedly used fraudulent documents and phony appraisals to overstate the value of the properties involved. They would secure mortgages based on the inflated value of the properties, promise repairs and improvements on the property, then take the money and leave the buyer owing more than the property was worth.
The indictment alleges three counts of conspiracy punishable by up to five years imprisonment and a $250,000 fine, four counts of tax evasion punishable by up to five years imprisonment and a $250,000 fine, 25 counts of wire fraud each punishable by up to 20 years imprisonment and a $1 million fine, nine counts of bank fraud punishable by up to 30 years imprisonment and a $1 million fine, and 25 counts of money laundering punishable by up to 10 years imprisonment and a $250,000 fine.
“While financial institutions are the victims of such crimes, entire neighborhoods pay the price,” Lockhart said. “Mortgage fraud leaves in its wake vacant houses with liens much larger than the properties are worth.”
Lockhart commended the investigation by IRS and FBI agents and Assistant U.S. Attorney Daniel A. Brown, who is prosecuting the case.
The following Columbus, OH properties are mentioned in the indictment:
165 N. 21st St
726 S. Champion Ave.
970 S. Front St .
538 Berkeley Rd.
665 S. 22nd St.
672 S. 22nd St .
1760 Sixth St.
992 S. 22nd St .
68 N. Eureka Ave.
1580 E. Fourth Ave.
788 Gilbert St.
35 S. Richardson Ave.
1590 Aberdeen Ave.
228 E. Hinman Ave.
832 N. St. Clair Ave.
2682 E. Sixth Ave.
452 Garfield Ave.
978 S. Front St.
53 Barthman Ave.
813 Carpenter St.
239 S. Warren Ave.
1262 Atcheson St.
189 N. Ohio Ave.
On October 24, 2008 two of the defendants were sentenced
Dwayne L. Carter a loan officer sentenced to two years in prison
Kenyatta Johnson a loan processor was sentenced to 1 month in prison followed by 11 months of home confinement.
Both offered their apologies to the court Federal Judge Algenon L. Marbley.
On Wednesday February 4th, 2009 four defendants in this matter were sentenced:
Aryeh M. Schottenstein, who was described by the judge as the “ringleader”, was sentenced to 3 1/2 years in prison for conspiracy and money laundering.
Donald F. Green, 49, a property investor who unloaded many of his vacant, rundown houses in the deals, was sentenced to three years in prison for conspiracy, bank fraud and tax evasion.
Jeffrey M. Lieberman, 58, an appraiser and Schottenstein partner, was sentenced to 16 months in prison for conspiracy and money laundering. Lieberman had assured lenders that proper appraisals would be done before closing deals, but many appraisals were done afterward and then backdated, authorities say.
George T. “Terry” Jordan, 52, a real-estate agent who listed properties and funneled stolen money through his bank accounts, was sentenced to one year for conspiracy and money laundering.
The remaining two defendants still to be sentenced are:
Jonathan Boyd a loan officer
Shawn A. Griffin who was responsible for fixing up properties and recruiting straw borrowers
The Columbus Dispatch reports that Jonathon Boyd was sentenced to 6 years in Federal prison for his part in a Ohio flipping scheme. He is the last of 10 defendants to be sentenced.
He was also ordered to pay $469,000 to 12 lending institutions.
In the following press release the New Jersey State Attorney General’s Office and the Division of Consumer Affairs have filed suit against a Gloucester County businessman who allegedly collected tens of thousands of dollars in surplus funds that homeowners otherwise would have received for a small fee after their homes were sold in foreclosure.
The state’s two-count complaint against Samuel E. Goodwin, III is the first action filed under the state’s Consumer Fraud Act to address deceptive practices in the area of surplus funds recovery.
Goodwin allegedly charged homeowners 15% to 65% of the total surplus funds to which they were legally entitled by misleading the homeowners into believing that the process to recover the funds was complicated and could not be filed by the homeowners on their own. Surplus funds are the monies remaining after the foreclosure sale takes place and mortgage, tax and other legal obligations have been paid. Homeowners in foreclosure can claim surplus funds by filing a simple form available from the Superior Court Trust Fund Unit and after paying nominal fees totaling less than $100.
The state alleges that in one instance, Goodwin received approximately $79,000 in surplus funds for making the application for release of such funds.
“Because of the ongoing subprime mortgage crisis, an increasing number of homeowners are facing foreclosure. These individuals can be a ripe target for those who would exploit their misfortune for profit,” Attorney General Anne Milgram said. “Consumers who have lost their homes in foreclosure need and deserve all of the surplus funds to which they are entitled.”
“We continue to educate consumers about the surplus funds process and to alert them to deceptive practices,” said Acting Consumer Affairs Director Stephen B. Nolan. “The Division will vigorously pursue those who would take advantage of vulnerable consumers. Anyone going through the foreclosure process is urged to get all the facts about how the process works and to be suspicious if anyone unexpectedly offers to help with obtaining surplus funds.”
The state’s complaint, filed in State Superior Court in Gloucester County, alleges that Goodwin, who maintains business addresses in Gloucester City and Woodbury, violated the state’s Consumer Fraud Act by the following:
- Misleading consumers into believing that he is a practicing attorney;
- Leading consumers to believe that the surplus funds application is a complicated process that requires his “expertise” and assistance;
- Leading consumers to believe that they could not make a pro se application for surplus funds;
- Aggressively pursuing and pressuring consumers into retaining his services and executing documents;
- Orally representing a surplus funds allocation between himself and the consumer, and then preparing written documentation that increases his share of the surplus funds recovery;
- Charging consumers varying percentages for the recovery of surplus funds when the same application process applies to all consumers;
- Recovering amounts ranging from $8,900 to $79,000 as a result of making a surplus funds application on behalf of consumers; and
- Failing to disclose to consumers the actual charges incurred in connection with the filing of a surplus funds application.
In addition, the state seeks restitution for affected consumers, maximum civil penalties, reimbursement of its attorneys’ fees and costs and compliance with the Consumer Fraud Act. The Superior Court Trust Fund Unit has assisted the Division with its investigation.
Any consumer who believes that he or she may be a victim of a surplus funds scam should file a complaint with the Division of Consumer Affairs. Complaints forms are available online at www.NJConsumerAffairs.gov . Complaints also may be filed by calling 800-242-5846 (within N.J.) or 973-504-6200 .
Deputy Attorney General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section, is handling this matter for the state.
Earlier this year, the Division issued a Consumer Brief concerning surplus funds which can be found at www.NJConsumerAffairs.gov/brief/surplus.pdf