Florida DFS Media Release - April 27, 2004

FORT LAUDERDALE — State regulators announced today that they are seeking revocation of a South Florida mortgage lender’s license for predatory lending practices, including misrepresenting loan terms and fees. The lender, First Mortgage America, Inc ., provided loans to consumers through several of its branch offices, including Miami, Dania, West Palm Beach, Sarasota and Tampa.

The Office of Financial Regulation (OFR) filed an Administrative Complaint against First Mortgage America, Inc., d/b/a The Financial Group, Inc., on April 16, 2004. The Complaint seeks revocation of the firm’s mortgage lender’s license and other penalties. The Financial Group, Inc., is headquartered in Ft. Lauderdale.

State regulators initiated a statewide examination into the lender’s activities and its owner, Blair Wright, after receiving more than fifty consumer complaints alleging, in part, ” misleading advertisements, misrepresentation of loan terms and conditions and misrepresentation of fees.”
According to examiners, The Financial Group, Inc., engaged in frequent radio advertising of very low interest rates. Potential borrowers were led to believe that the low rates advertised on the radio were fixed rate mortgages, when in fact they were adjustable rate mortgages. The loans were structured such that the monthly payment may not be sufficient to cover the monthly principal and interest payment resulting in an increase rather than a decrease to their mortgage loan balance.

Examiners also determined that The Financial Group, Inc., failed to disclose or underestimated to potential borrowers the total costs to be incurred in obtaining their mortgage loan.


Two men plead guilty to fraud in PA home improvement scam

Times Leader — April 26, 2004

PITTSBURGH - Two men have pleaded guilty to federal charges stemming from a scheme that targeted poor homeowners by offering them cash incentives to take out loans worth more than their homes, officials said.

William McKee , 51, of Pittsburgh, and Terry Boring, 54, of Cheswick, pleaded guilty Monday to conspiracy, mail fraud and false representations to a government agency.

Federal and Pennsylvania prosecutors said McKee and Boring ran home remodeling business from 1993 through November last year and encouraged people to sign home improvement contracts even if they had poor credit. One of the men’s companies, Zintron, sent people door-to-door, used fliers and placed ads promoting home improvement and finance services to consumers, prosecutors said. The company also offered cash incentives to sign contracts and that, in some cases, the defendants altered customers’ signatures and customer information before sending them to finance companies.

Since the alleged scam was discovered in 2001, more than 75 homeowners have said they were defrauded and the state has stepped in to stop a dozen of mortgage foreclosures, according to the Pennsylvania Attorney General’s Office. The men also defrauded the federal Department of Housing and Urban Development by entering some homeowners in a federal program that required the federal government to repay lenders if the people defaulted on the loans.

Meanwhile, the state Attorney General’s Office is continuing with a civil lawsuit seeking to make the men forgive some of the loans and mortgages or repay homeowners and bar the men from operating a business in the state again.

The lawsuit said that after the customers signed the contracts, the home improvement work that was done was substandard in some cases. In one, a Northumberland County man claimed that siding put on his house blew off shortly after it was installed and his home’s foundation was not fixed as promised.

In some other cases, work was not completed or performed at all, and the company refused to pay refunds, officials said.


Disbarred lawyer gets prison term for ID theft

St Petersburg Times - April 23, 2004

Iric Vonn Spears will also have 10 years of probation after his 10-year sentence in prison is over and must pay more than $100,000 in restitution.The once-promising Pinellas County lawyer was sentenced to 10 years in prison Thursday after he was convicted of stealing the identity of one of his clients.

Iric Vonn Spears, 38, was arrested in December 2002 on charges he used the client’s identity to buy a $250,000 home in Atlanta and to open credit card accounts on which he charged almost $8,000. Spears was charged with 16 counts of grand theft, mortgage fraud, identity fraud and forgery. He pleaded no contest to the charges in January, and faced up to 135 years in prison on all counts, said assistant state attorney Bob Lewis. The minimum sentence he faced was just more than six years in prison.

Judge Douglas Baird on Thursday sentenced Spears to 10 years in prison, to be followed by 10 years of probation. He also ordered Spears to pay restitution of more than $100,000, Lewis said. Investigators said Spears assumed the identity of Reginald Dalton, whom he met at a social function in August 2000.

Dalton soon hired Spears to represent him in an employment contract dispute with a former employer. Spears obtained personal information and employment documents from Dalton and then used those items to steal Dalton’s identity, investigators said.

Months later, Dalton was called by a bank, which told him it was foreclosing on his property in Atlanta. Dalton knew nothing about the property.

Investigators said Spears had purchased the $250,000 property in Dalton’s name, then attended the closing, posing as Dalton’s attorney. Spears received more than $63,000 after the closing for legal services, arrest affidavits state.


Mortgage broker pleads guilty in Poconos realty fraud

East Poconos Community News — April 23, 2004

The first person charged in the three-year-old Poconos real estate fraud probe pleaded guilty to forgery in Monroe County Court on Tuesday.

Authorities say this first conviction could lead to more. Keith Doug Buchanan , 35, pleaded guilty to forgery, a felony, and faces a maximum of seven years in prison. He originally was charged with 22 third-degree-felony counts

In exchange for the guilty plea, five counts of forgery were dropped. Buchanan, a mortgage broker with Northstar Mortgage in Allentown, was charged for forging a home mortgage he arranged for Kellie and Larry Nau so that the couple could buy a Tunkhannock Township home.

He cut and pasted Larry Nau’s signature onto documents the Nauses said they never saw and falsely represented another man as being Kellie Nau’s father, with the man’s phony signature on a $36,000 “gift letter” used to support a false downpayment on a mortgage package, prosecutors say.

“This is the first conviction. It shows me we are moving forward with this,” said Assistant District Attorney Robert Saurman, who handled the case. “The investigations are getting results.”

Buchanan could be key to getting more convictions. He reportedly has agreed to share information with the Pennsylvania Attorney General’s Office that may implicate others. In return, the Martinsville, N.J., resident could avoid jail time.

Prior to joining Northstar about three years ago, Buchanan was a loan officer for Leading Financial Mortgage in Stroudsburg , which was investigated in 2001 by the D.A.’s real estate fraud task force, which has been inundated with claims of real estate fraud.


Mortgage broker admits fraud in obtaining loans

Pittsburgh Post-Gazette - Thursday, April 22, 2004

A Westmoreland County mortgage broker has pleaded guilty to mail fraud and agreed to help the FBI in an ongoing investigation into fraud by mortgage brokers, appraisers and notaries since 1999.

Todd D. Breninghouse , 38, who ran Platinum Financial Services from his house on Cleveland Drive in Lower Burrell, admitted in U.S. District Court that he had bilked banks and private lending companies of almost $1 million by obtaining fraudulent loans.

In waiving indictment and pleading guilty, Breninghouse entered into an agreement with the U.S. attorney’s office to cooperate in the investigation, including testifying before the grand jury and at trial in Pittsburgh and elsewhere.

In exchange for his help, he could get a more lenient sentence. Prosecutors said Breninghouse, who advertised in the print media throughout Western Pennsylvania and targeted borrowers with financial problems, applied for mortgages for seven people, and for himself, between 2000 and 2002.

The mortgage loans for him and his wife, Roberta, totaled $250,000 from Meritage Mortgage Corp. He applied for the other loans through National City bank and Peoples Choice Home Loan Inc. The largest loan was $280,000 from Peoples Choice for a woman identified in court papers as Rose Conte. Another for a man named Robert Sherrow came from National City and totaled $200,107.

Breninghouse admitted that, for the applications, he submitted fake or forged records of all kinds, including W-2 forms, title insurance, employment records, real estate appraisals and property deeds, to deceive the lenders about the credit-worthiness of the borrowers.

In all, the loans totaled $987,467.


AG Cooper puts mortgage con artist behind bars

NC Attorney General Press Release - April 21, 2004

Raleigh : A Wilmington mortgage broker who embezzled close to $1.8 million and caused some consumers to lose their homes has been arrested, Attorney General Roy Cooper announced today.Tim Caviness, president of Homesavers Financial and Equality Mortgage, was arrested late Friday on criminal charges brought by Cooper. Caviness was arrested by State Bureau of Investigation Agents in Guilford County after the New Hanover County Grand Jury indicted him last week on 18 counts of obtaining $849,042.62 by false pretenses and 18 counts of embezzling $849,042.62 from consumers. He is currently being held in New Hanover County jail on $1.5 million bond.

Caviness is scheduled to appear in New Hanover County Superior Court for a bond hearing at 2 PM Wednesday. The examination by SBI agents and Department of Justice prosecutors working for Cooper will continueand may result in additional charges. Between 1999 and 2001, approximately 48 consumers in southeastern North Carolina lost $1.8 million through Caviness’ mortgage scheme. According to consumers who came forward, Caviness approached them about refinancing their mortgages, promising that the new mortgage could be paid off in five years. Caviness convinced homeowners to refinance 100% of their existing mortgage at a higher interest rate and with higher fees, telling them that the equity they had already paid on their home would go into a trust fund. He promised consumers that they would be able to retire the new debt within five years by using money in the trust fund to make payments on the new mortgage.

Within a matter of months, homeowners found that Caviness had drained their trust funds. Families lost between $8,000 and $177,000 each. Many consumers saw their interest rates and their monthly payments more than double, and some lost their homes as a result. Consumers who have sought new home loans with more reasonable payments have had a difficult time finding reputable lenders who are willing to refinance the entire mortgage.

The Attorney General’s Office first became aware of the scheme in August 2001 because of consumer complaints to the N.C. Office of the Commissioner of Banks. Within weeks, Cooper filed suit against Caviness and put a temporary halt to his business. In 2003, Cooper won a ermanent injunction and a judgment of $1.5 million against Caviness and his company. Caviness has failed to make the court-ordered payment. A bond held by Equality Mortgage worth $150,000 was used to repay consumers a small fraction of the money they lost.


Man indicted in attempted theft of neighbors home

Bronx DA Press Release - April 20, 2004

Bronx District Attorney Robert T. Johnson announced today that a 41 year-old Bronx man has been indicted on charges of attempting to steal and sell the property of a 62 year-old neighbor.

A grand jury has charged Paul Marino, aka “Brian Cartania” of 4385 Vireo Avenue with one count each of Attempted Grand larceny in the 2nd degree and Criminal possession of a forged instrument in the 2nd degree, both “D” class felony offenses. It is alleged that Marino acted in concert with an unapprehended individual, in an attempt to sell the home of Maureen McMahon, a retired schoolteacher. If convicted, Marino faces a term of up to seven years imprisonment on each count. Marino is next scheduled to appear in Bronx Supreme Court, on Friday, May 14, 2004, in Part M60.

The attempted theft of property was uncovered when McMahon, the owner of targeted property on Vireo Avenue, in the Woodlawn section of the Bronx, found an employee of T. Eason Land Surveyors of Port Jefferson, L.I. surveying her property on behalf of Cartania Real Estate Holding Company. The victim contacted authorities who initiated a four-month joint investigation by the Bronx District Attorney’s Detective Squad and the United States Postal Office.

The indictment alleges that in November 2003, Marino, acting as a representative of the Cartania Real Estate Holding Company, and possessing a counterfeit deed with a forged signature, approached a third party and attempted to sell the McMahon home. The indictment further alleges that in the process of attempting to sell the house to the third party, the defendant supplied contracts for the sale of the house to the third party. The third party wrote a check in the amount of $37,500 as a down payment to a fictitious lawyer, who supposedly represented the Cartania Real Estate Holding Company, named on the forged deed.

Noah Fowle of the Bronx Times (read Noah’s full story here) reported conversations with the victim and US Postal Inspector Robert Moriarty.

“I realized somebody was doing something very wrong,” McMahon said. “Then a Woodlawn property owner who had bought my house showed up and wanted to know when I was leaving.”

McMahon said she then contacted the Bronx D.A.’s Office, which in turn began an investigation with the borough’s detective squad and the postal service.

Moriarty said Marino is a seasoned, white-collar criminal who has served time in prison before. “Marino operated under an alias, Brian Cartania, and made up a fake real estate agency and used an address on Webster Avenue as a mail drop,” Moriarty explained. “He has a pretty good background in real estate. He is also capable of getting government grants.”

McMahon, who knew Marino before the incident, said this situation has left her feeling uneasy. “He asked me if I wanted any repair work and mentioned getting a government grant to do the contract,” she said.

“I felt in danger. My peace of my mind is gone,” she said. “I was not even selling my house and someone bought it. How can someone get away with this?”


FBI says Hezbollah raising money through Mortgage Fraud

April 18, 2004 - The Detroit News

DEARBORN — An FBI report says two men indicted in Detroit sent more than $200,000 (Canadian) to buy military equipment for Hezbollah, a terror organization based in southern Lebanon.

The FBI affidavit made public Friday links two high-profile government investigations of alleged funding of Hezbollah in Dearborn. FBI Special Agent Timothy Waters said in a May 2003 affidavit that Mohammed Krayem , who spent time in Canada and Michigan, “sent approximately $200,000 (Canadian) to his brother.” The money was used to “purchase military equipment from United Nations Protection Forces stationed in southern Lebanon” including American-made night vision goggles for Hezbollah.

In January, the government unsealed an indictment charging Mahmoud Youssef Kourani of Dearborn with conspiracy to provide material support or resources to Hezbollah, the Lebanese group that has committed many acts of terror against Israel, as well as the 1989 murder of a U.S. Marine. Waters’ affidavit was filed to get judicial approval to search Kourani’s home in May 2003.

“To support Hezbollah, these criminal enterprises, primarily based in the Detroit area, are engaged in a wide range of offenses, including credit card fraud, bank fraud, mail fraud, mortgage fraud, wire fraud, bankruptcy fraud, money laundering,” among 11 felonies, the FBI said.