Entries in New York (260)


23 people indicted in New York mortgage fraud scheme

In the following press release MICHAEL J. GARCIA, (pictured left) the United States Attorney for the Southern District of New York, MARK J. MERSHON,Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and MARTIN D. FICKE, the Special Agent-in-  MikeGarcia.jpgCharge of the New York Office of the Department of Homeland Security’s United States Immigration and Customs Enforcement (“ICE”) announced the indictment of 23 individuals on charges of participating in an illegal scheme to defraud various banks and financial institutions by submitting fraudulent applications and supporting documentation for mortgages and home equity loans. As a result, the lenders were induced to make loans to persons and at terms that the lenders otherwise would not have funded. The defendants include brokers and processors who worked at the mortgage brokerages AGA Capital NY, Inc. (“AGA Capital”) and Northside Capital NY, Inc. (“Northside Capital”), in Brooklyn, New York, real estate appraisers and loan account executives. As alleged in the Indictment unsealed in Manhattan federal court earlier today (a copy of the indictment was kindly provided by the US Attorney’s office - click here to read it):

From 2004 through December 2006, Northside Capital, AGA Capital, and its successor, Lending Universe Corporation, brokered over one thousand home mortgages and home equity loans, with a total face value of at least $200 million dollars, with various banks and lending institutions. Northside Capital, AGA Capital and Lending Universe earned a total of at least $4 million in commissions and fees on these loans. The lenders that issued the mortgages and loans brokered by Northside Capital, AGA Capital and Lending Universe have suffered actual losses of at least $3.5 million as a result of the defendants’ fraud scheme.

The eight-count Indictment charges defendants ALEKSANDER LIPKIN, IGOR MISHELEVICH, ALEX GORVITS, MARINA DUBIN, IGOR BUZAKHER, JOSEPH PAPERNY, DANIEL MIKHLIN, JOHN GELIN, FRANSWA LIGON, FUAD YAKUBOV, RICARDO ACOSTA, ERIC CALLAHAN, DOUGLAS ELLISON, OLEG ANOKHIN, DAVID NEUSTEIN, TOMER SINAI, NATHANIEL KESSMAN, CARL CARR, JOHN CIAFOLO, LUCIANNE MORELLO, FAINA PETROVSKAYA, MARIYA BADYUK, and MARINA KLOTSMAN, with conspiracy to commit bank and wire fraud, and several of the defendants with bank and wire fraud in connection with the procurement of seven specific mortgage and home equity loans.

As part of the fraud scheme, the defendants identified properties for sale in multiple locations including all five boroughs of New York City, New Jersey and Sullivan County, New York. The defendants typically purchased the target properties with one or more mortgages and/or home equity loans amounting to 100 percent of the purchase price of the property, thus ensuring that the defendants did not have any money at risk in the fraudulent transactions.

The fraud also involved paying individuals who fit a certain financial profile to act as phony purchasers, or “straw buyers” of the target properties. The defendants then prepared and submitted false and misleading information concerning the straw buyer’s current residence, employment, income, assets, and existing debt. In support of these false and misleading representations, the defendants also created false documentation, such as bank statements and proof of income, on which the lenders relied to verify the statements in the loan applications.

In addition, the defendants sought mortgages and home equity loans for the target properties at values that were in excess of the properties’ actual sale prices and, thus, the properties’ true market values. To support applications for loans in excess of the properties’ market values, the defendants procured artificially inflated appraisals of the market value of the target properties. Using these false appraisals, the defendants received mortgages and other loans in excess of the actual sale price of the properties securing the loans. The difference between the appraised value of the property and the property’s actual sale price represented, in part, the defendants’ profits from the scheme. The defendants distributed the profit from each fraudulently obtained mortgage loan amongst themselves for their personal gain. The defendants also earned commissions of at least 2 percent and as much as 4 percent on the fraudulently inflated loan values, in addition to fees and other monies distributed upon the closing of each property.

The properties mentioned in the indictment are:
1370 Park Place, Brooklyn
184 Willowbrook Road, Staten Island
221 Washington Avenue, Brooklyn
1058 Decatur Street, Brooklyn
100 Oceana Avenue, Apt. 3E, Brooklyn
225-19 113th Ave, Queens Village
330 Old Tacy Road, Kauneonga Lake
457 Bedford Avenue, Staten Island
212 Lefferts Place, Brooklyn
924 Jefferson Avenue, Brooklyn
553 Gates Avenue, Brooklyn
99 Avenue U, Brooklyn
284 Mac Dougal Street, Brooklyn
67 Sharrotts Road, Staten Island
100 Oceana Drive West, Apartment 6J Brooklyn
40 Oceana Drive West, Apartment 9C, Brooklyn

Of the 23 individuals who were charged, 18 were arrested earlier this morning and 4 are expected to surrender tomorrow. Defendant ANOKHIN is still at large. The defendants will be arraigned before United States Magistrate Judge JAMES C. FRANCIS this afternoon. The case was assigned to United States District Judge RICHARD J. HOLWELL. If convicted, each defendant faces a maximum sentence on each count of the Indictment in which he or she is charged of thirty years in jail and a fine of the greater of $250,000 or twice the gross gain or loss resulting from the crime.

The charges arise from an investigation conducted by a joint task force of the FBI and the New York City Police Department, and by ICE. Mr. GARCIA praised the efforts of these agencies in conducting the investigation. Assistant United States Attorneys JONATHAN B. NEW, KATHERINE R. GOLDSTEIN, and CHRISTINE MEDING are in charge of the prosecution.

The charges and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.


Three men indicted with stealing home of woman who was dying of cancer

In the following press release from Brooklyn, issued on December 28, 2006 by Kings County District Attorney Charles J. Hynes  it was announced that three men had been indicted, charged with stealing an elderly Brooklyn woman’s home, while she was dying of cancer.

The defendants are charged with forging documents to give defendant Russell Pitt power of attorney over a building owned by the woman at 39 Herkimer Street in Bedford-Stuyvesant. The indictment charges that in September 2004, Nathen Fark as and Pitt sold the home to Winston Roche, 59. However, Roche was involved in the criminal conspiracy, and he and the other defendants divided the $476,000 mortgage. The woman died in 2005.

One defendant, Jerry Brauner, 53, who notarized the power of attorney, is charged with falsifying a notary public renewal application, in which he denied that he was a convicted felon. At their arraignments yesterday, Farkas, 31, and Brauner were held in lieu of $85,000 bail. Roche’s bail was set at $45,000. Pitt remains at large.

Brauner is charged with Offering a False Instrument for Filing in the First Degree. Charges against Farkas, Roche, and Pitt include Grand Larceny in the Second Degree, Conspiracy in Fourth Degree and Forgery in the Second Degree.

Assistant District Attorney Michael Vaccaro is prosecuting the case. Michael Vecchione is Chief of the Rackets Division.


Attorney charged with theft of over $1 million in real estate proceeds

In the following press release on December 28, 2006 Westchester County District Attorney Janet DiFiore announced that Shelley Ann Rivera (DOB 7/18/66) of 26 Pardee Place, East Haven, Connecticut was arraigned today on one count of Grand Larceny in the Second Degree, a class “C” Felony.

Between May, 2005 and August, 2006, Rivera, a practicing attorney in White Plains, New York represented Annette Rivera, her aunt, in a number of real estate and financial matters. In May of 2005, the defendant received a check for approximately $480,000 from Annette Rivera as the proceeds of the sale of a house in Riverdale, The Bronx, New York.

In August of 2006, the defendant received an additional check in the amount of $522,248 which was a portion of the proceeds for the sale of another house in Warwick, Orange County, New York. The defendant held these monies in trust for Annette Rivera to be used in a subsequent real estate transaction.

On October 9, 2006 the defendant failed to provide Annette Rivera with $860,000 needed by her to purchase a property in Riverdale, New York. The defendant could not account for the disposition of that money and absconded to Las Vegas, Nevada. She was arrested there in late October, waived extradition and returned to Westchester County last week.


Rivera (pictured here) was remanded to the Westchester County Jail. She faces a maximum of fifteen years in state prison.






Assistant District Attorney Brian Conway, of the Public Integrity Bureau, will prosecute the case.


Attorney pleads guilty to theft of down payment

In the following press release  Westchester County District Attorney Janet DiFiore  announced on December 12, 2006 that Robert Dell’Aquila, (DOB 7/13/69), of 65 Shoreview Drive, Yonkers, New York plead guilty to Grand Larceny in the Second Degree, a class “C” Felony.

Between February 10, 2006 and April 27th, 2006, Dell’Aquila, a former attorney who had been disbarred in 2001, stole approximately $90,668.00 from a client. The client was not aware that Dell’Aquila was disbarred.

The money was entrusted to Dell’Aquila as a down payment in the sale of his client’s home on Pelton Road in Yonkers. At closing, in April, 2006, Dell’Aquila did not have the more to pay his client. He had taken the funds for his own personal use.

Dell’Aquila was taken into custody by investigators from the Westchester County District Attorney’s Office in August 2006. Upon further investigation, it was discovered that three additional clients were defrauded by Dell’Aquila in the amount of $90,000.00.

Dell’Aquila (pictured below) faces up to fifteen years in state prison on the Grand Larceny charge and will be ordered to pay restitution of $180,668.00. He is scheduled to be sentenced on March 15th, 2007.









Assistant District Attorney Brian Conway, of the Public Integrity Bureau, is prosecuting the case


Brooklyn home stolen from elderly holocaust surviver

In the following press release  from Brooklyn, the Kings County District Attorney Charles J. Hynes  announced on December 20, 2006 the indictment of a married couple for stealing total ownership of a home they co-owned with an elderly Holocaust survivor and his wife who narrowly escaped Hitler’s Germany in 1938.

This is another example of the real estate fraud epidemic that is plaguing the city and especially Brooklyn, said District Attorney Hynes. In this particular case, an aging couple was robbed of their share in a very valuable property and were lucky they never lost their home.

In 1987 Harry Langer, now 88, and his wife Hanna, purchased a one-third share of a home on 51st Street in Borough Park. Defendants Mendel and Chaya Rosenfeld already owned the other two-thirds share. The couples agreed to each live in one of the four apartments and rent the other two, the income paying for maintenance and taxes on the building and any profits being split according to their stake in the property.

The indictment alleges that in 1999 the Rosenfelds stole the Langers’ share of the house. The theft was accomplished by a forged deed and other forged documents. Among the false documents was a forged affidavit claiming that the Langers gave their share to the Rosenfelds for free because the Rosenfelds were the Langers’ nephew and niece. In fact the couples are not related. The Rosenfelds immediately took out a $300,000 mortgage on the house. The mortgage is still on the house, even though the Rosenfelds deeded the house to Julius Spitzer, a relative, who in turn deeded the house to a shell corporation called Madison Realty Management.

The Rosenfelds are charged with Grand Larceny in the Second Degree, a Class-C felony which carries a maximum sentence of 15 years in prison.

Assistant District Attorney Richard Farrell is prosecuting the case for the Rackets Division. He is being assisted by Financial Investigator Vincent Verlezza. Michael Vecchione is Chief of the Rackets Division.


Mortgage fraud in Brooklyn leads to kidnap of 10 year old boy in London

On December 18, 2006 the BBC in London  reported on the conclusion of a trial after the Metropolitan Police Kidnap Unit was called in on 16 February this year by the family of a 10-year-old boy who had been grabbed from his home in Walthamstow, east London, by a gang from New York. The boy’s mother told them one of the gang had posed as a postman to gain entry to the flat during the half-term holidays.

At their trial at Middlesex Guildhall Crown Court  the jury heard that the gang were looking for a man called Sheldon Stone who they believed had stolen $600,000.

The money was from a mortgage fraud in Brooklyn, masterminded by a New Yorker called Adonis Perez. The $600,000 had been transferred to a bank in Britain using Sheldon Stone as an intermediary, but had gone missing.

The gang, who were armed with guns and a meat cleaver, spent more than two hours searching the flat but eventually they left the boy’s mother bound and gagged and forced him to “kiss her goodbye”. They took him to a tiny flat on the Peabody estate in Westminster and locked him in the bathroom while they negotiated a ransom, set at £100,000.

Perez’s girlfriend, Dawn Fields, had been heavily involved in planning the kidnap. She had bought guns and balaclavas for the gang, borrowed the flat from a friend and recruited her brother, Jeriah Simpson, to drive them around.

dawn fields.jpggadwell gibbs.jpg






      Dawn Fields               Jeriah Simpson               Edwn Phillip                 Gadwell Gibbs

The family pleaded for more time to raise the cash and, in desperation, decided to call the police. The Kidnap Unit was brought in and managed to track down the gang’s lair. Armed police burst into the flat and rescued the youngster.

The boy, who cannot be named for legal reasons, told the court by videolink: “After a day they put me in a bathroom because a girl was coming in, that was when I heard an explosion and the police came in.”

Americans Gadwell Gibbs, 24, and Edwin Phillip, 22, along with Trinidadian national Damien Francis, 24, pleaded guilty to kidnap and false imprisonment. But Fields, 26, and Simpson, 21, tried to bluff it out.

Fields, from Clapham, South London, denied hiring the New York gang, although she admitted she was investigating the missing money which had “come from the underworld”.

But Gibbs and Francis testified against her and, together with forensic and mobile phone evidence and a series of incriminating entries in her diary, helped convict her and Simpson. The guns used by the gang were highly convincing replica weapons.

On 18 December the gang were sentenced to a total of 62 years at Middlesex Guildhall Crown Court. Fields was jailed for 15 years, Phillip for 13 years, Francis and Gibbs both got 12 years and Simpson 10 years. Judge Simon Smith commended the police.

He said: “It is very commendable how quickly they managed to target this particular address on a kidnap which could have gone on a great deal longer.”

Scotland Yard want to speak to Perez, who remains on the run and is also wanted by the US authorities.


Two men charged in Brooklyn real estate investment fraud

In the following December 12, 2006 press release Kings County (Brooklyn) District Attorney Charles J. Hynes announced the indictment of two licensed stockbrokers, Damascus Lee and Ian Bynoe, who are charged with creating a fake real estate investment firm to launch a million-dollar securities fraud. The case was referred to the District Attorney’s Office by the NASD (National Association of Securities Dealers), a private-sector regulator of the securities industry.

These rogue brokers violated their clients’ trust and emptied their life savings for their own greedy purposes, said District Attorney Hynes. I’d like to thank NASD for bringing this case to our attention, and I promise we will not close this investigation until every penny is recovered for all the victims of these crooked investors.

The indictment charges that Lee and Bynoe, both 34, created a fake real estate development company called Vanguard Development and Management and then sold stock in it. The company was based in Wyoming but did no actual business. However, from the J.P. Turner & Company branch office they operated at 469 Clinton Ave., in Clinton Hill, Lee and Bynoe had other stock brokers working for them contact potential investors around the world. The brokers Lee and Bynoe supervised told potential clients that investments in Vanguard Development were officially approved by J.P. Turner, when no such approval existed. They were also told to say the company had incredible growth potential and was on the verge of taking off.

The investigation is ongoing, and more victims are expected. J.P. Turner & Company cooperated fully in the investigation and is not facing any charges. Led by Fordham Law School Professor Marcella Silverman, students in Fordham’s Securities Arbitration Clinic have begun working to recover the funds one victim lost.

While the Brooklyn District Attorney works to prevent future victims of this securities fraud, one such victim is seeking recovery of her stolen funds through a private arbitration at the NASD filed last Friday, Dec. 8, against the individual brokers and the brokerage firm which empowered them, said Silverman.

Thanks to Professor Silverman and her law students, at least one victim may soon be compensated for the money she lost, said DA Hynes. Fordham’s Securities Arbitration Clinic represents small investors who have lost money through overreaching or criminal activity of brokers. At the clinic, law students handle actual cases under the supervision of a professor, who is a practicing attorney.

Lee and Bynoe are charged with numerous felonies, including Grand Larceny in the Second Degree, Grand Larceny in the Third Degree, Scheme to Defraud in the First Degree, and Money Laundering in the Second Degree. If convicted, they face up to 15 years in prison. NASD has revoked Lee’s license to sell securities in the US.

Assistant District Attorney Bryan Wallace is prosecuting the case and is being assisted by Assistant District Attorneys Gavin Miles and Noel Downey. Michael Vecchione is Chief of the Rackets Division.

New York AG Spitzer files suit against alleged mortgage fraud ring

In the following press release New York State Attorney General Eliot Spitzer  today (November 29, 2006) announced that he has filed a lawsuit alleging that a group of real estate sellers, mortgage brokers, attorneys, and appraisers pursued a fraudulent real estate flipping scheme targeting minority neighborhoods in Brooklyn. In addition, the Attorney General announced that he has entered into consent decrees with some of the defendants that will provide substantial monetary relief to victims and stringent oversight of future real estate activities by the settling defendants.

According to the lawsuit, defendants Isaac Katz and Yoel Silberstein devised a scheme in which they purchased distressed properties in the Brooklyn neighborhoods of Crown Heights, Bedford-Stuyvesant, East Flatbush, East New York and Bushwick, and then enlisted the services of a front-man, mortgage brokers, and real estate lawyers to dupe purchasers and lending institutions in order to obtain significant resale profits.

The lawsuit alleges that defendant Amenophis Alleyne found prospective minority buyers with excellent credit to purchase the properties. The minority buyers, many of whom were Alleyne’s family and friends, allegedly were told that the properties were “investment opportunities” that could be purchased with no money down. They were also assured that rental income they would receive from prospective tenants would more than cover any mortgage payments.

According to the complaint, the mortgage brokers, defendants Theodore Welz and Shaya Saks, induced banks into issuing loans for the properties by preparing loan applications that misrepresented the borrowers’ income and assets and falsely stated that the borrowers were making significant down payments. According to the lawsuit, the banks were also provided with false appraisals, prepared by real estate appraisers including defendants Jeffery Richardson and Erik Johnson, that significantly inflated the values of the properties.

Defendants Benzion Frankel, Rephoel Weitzner, Devon Clarke, and Joseph Treff, the real estate attorneys who represented the lenders, the buyers and the sellers at the closings, prepared loan documents and public filings (including deeds and real estate transfer tax records) that allegedly misrepresented the actual sales prices of the properties.

Companies mentioned in the complaint as owned or controlled by some of the defendants are:
Johnson and Rose Appraisal Services
440 Cleveland Realty
865 Belmont Realty Corporation

According to the lawsuit, defendants Katz and Silberstein reaped substantial profits from their fraudulent scheme, which was carried out dozens of times between 2002 and early this year. In one case identified in the suit, they purchased a property for $205,000 and sold it later the same day for $370,000. The buyers, the lawsuit alleges, were unaware that their “no money down” deals were being accomplished only by hiding the true nature of the transactions from their lenders. As a result, many buyers were saddled with large, high-interest-rate mortgages they could not afford. Some allegedly ended up in default and foreclosure, ruining their once-excellent credit. The lawsuit further alleges that the scheme artificially inflated market prices of homes in the affected neighborhoods as appraisers, sellers, real estate brokers and others seeking to value properties in those areas relied on the false sales prices reported in deeds and other public records.

“The perpetrators of this scam promised minority home buyers an opportunity to climb the economic ladder,” Spitzer said. “In reality, the defendants profited handsomely while their victims saw their financial security impaired or even ruined. By imposing significant monetary penalties on the participants in the scheme, we hope to send the message that fraudulent and discriminatory real estate deals will not be tolerated in the State of New York.”

The Attorney General has entered into consent decrees resolving the lawsuit against defendants Katz, Silberstein, Welz and Saks. The decrees require:

• payment of nearly $1.8 million in restitution and penalties
• a detailed accounting of the real estate transactions conducted by the mortgage fraud ring
• extensive monitoring of future real estate activities by defendants Katz and Silberstein
• significant restrictions on mortgage brokering activities by defendants Welz and Saks.

The funds remitted pursuant to the decrees will be used to compensate victims of the scheme who file complaints with the Attorney General. Any remaining funds will be retained by the State as penalties.

The lawsuit will proceed against defendant Alleyne as well as defendants Clarke, the lawyer for the buyers at the closings; Frankel and Weitzner, lawyers for the defrauded banks; Treff, the lawyer for defendants Katz and Silberstein; and Richardson and Johnson, the appraisers.

This case is being handled by Assistant Attorneys General Brian J. Kreiswirth, Beth S. Frank, and Brian J. Schmidt under the supervision of Natalie R. Williams, Chief of the Civil Rights Bureau.

Click here for the complaint