Entries in Operation Malicious Mortgage (25)

3:54PM

9 indicted in Phoenix area mortgage fraud allegations

The following case forms part of Operation Malicious Mortgage and was never the subject of any specific press release by the US Attorney or the FBI nor featured in this or other similar sites. The 9 defendants named below form part of the 36 people mentioned in a very general press release from the FBI and US Attorney. I found it while investigating something else!!.

On June 17, 2008 an indictment was filed in the United States District Court in Arizona charging 9 people with Conspiracy, Wire Fraud, Money Laundering and Aiding and Abetting in relation to allegations of a “cash-back” mortgage fraud scheme.

The alleged scheme involved at least 22 properties which were purchased by straw borrowers and at the closing of each one defendant Daniel Morar received cash-back from the loan funds even though he was not the borrower. The cash-back received from the transactions totaled some $1,515,000 which was shared amongst the defendants with the lions share going to Morar. The scheme was facilitated by an escrow officer, a mortgage broker and the owner of CI Custom Builders.

The properties that were to be part of the scheme were identified from those that were for sale for between $375,000 and $900,000. They then obtained appraisals that “substantially inflated” the fair market value of each one and identified title company’s that would falsify the HUD-1. The sales price in each transaction exceeded the sellers’ asking price by between $69,000 and $180,000.

The Uniform Residential Mortgage Applications (1003’s) used in the scheme misrepresented borrowers income and employment, assets, intent to occupy and other real estate that the borrowers owned. In addition the final HUD-1’s omitted details of the payments to Morar.
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Additional Materials

Indictment
Original Press Release
Arizona DFI consent order against Smart Mortgage and Catherine Zebarth
Nevada Secretary of State records for D Contractor Invest, Inc
Arizona Secretary of State records for CI Custom Builders
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Defendants

Daniel Morar – The sole owner of D. Contractor Invest, Inc
Gheorghe Babeti – buyer of 10 properties
Cosmina Bunea – buyer of 11 properties
Dorel Irimiciuc – buyer of 1 property
Samuel Dobos – associate of Morar
Brandon Azadegan – employee of CI Custom Builders and associate of Morar
Cipriano Ionutescu – owner of CI Custom Builders and associate of Bunea
Christina Mejia – escrow officer at Great American Title Agency in Phoenix
Catherine Zebrath – sole owner of Smart Mortgage

Properties mentioned in indictment

6325 E Sweetwater Ave, Scottsdale, AZ
18402 N 75th Ave, Glendale, AZ
6518 W Molly Lane, Phoenix, AZ
6202 W Gambit Trail, Phoenix, AZ
4933 W Fallen Leaf, Glendale, AZ
27929 N 64th Lane, Phoenix, AZ
6224 W Hedgehog Place, Phoenix, AZ
6802 W Briles Road, Peoria, AZ
27838 N 60th Avenue, Phoenix, AZ
16942 E Monterrey Drive, Fountain Hills, AZ
38209 N 24th Drive, Phoenix, AZ
26155 N 68th Avenue, Phoenix, AZ
5639 E Thunderbird, Scottsdale, AZ

14858 N El Sobrante Avenue, Fountain Hills, AZ
1001 E Northview, Phoenix, AZ
5549 E Pershing, Phoenix, AZ
6809 W Cottontail, Peoria, AZ
606 W Los Corrales Drive, Desert Hills, AZ

I will update court dates and case progress asap.

8:44AM

TX couple indicted in flipping scheme

In the following press release Johnny Sutton, United States Attorney for the Western District of Texas announced that two former San Antonio area residents are charged with carrying out a mortgage fraud scheme involving three San Antonio and Spring Branch residential properties, three financial institutions and over $1,000,000 in foreseeable losses.

The five-count indictment, [Indictment] returned yesterday afternoon, charges Fred DeGuzman and Veronica DeGuzman with three counts of financial institution fraud and two counts of aggravated identity theft.

According to the indictment, from June 25, 2007, to November 5, 2007, Fred DeGuzman, using an alias, and Veronica DeGuzman would contact individual sellers of residential property and enter agreements to purchase the property for an inflated price, with the excess of the stated price over the actual sales price being returned to a corporation owned and controlled by Fred and Veronica DeGuzman. Using the alias, as well as falsified employment and income information, Fred and Veronica DeGuzman applied for and obtained 100% financing. After one or two mortgage payments, the mortgage went into default causing losses to the lenders.

Upon conviction, each defendant faces up to 30 years in federal prison and a maximum $1 million fine plus restitution for each of the financial institution fraud charges, plus up to 2 years and a $250,000 fine for each of the aggravated identity theft counts which must be served in addition to any imprisonment for financial institution fraud.

8:30AM

Oregon loan officer pleads guilty - received $25k kickbacks

In the following press release Karin J. Immergut U.S. Attorney for the District of Oregon announced that Marty Ray Folwick, 50, pled guilty today before United States District Court Judge Garr M. King to four counts of a 15-count federal indictment which was returned by a grand jury on June 12, 2008.  The guilty plea was entered as part of a plea agreement in which Folwick pled guilty to one count of bank fraud, two counts of wire fraud, and one count of money laundering.  Folwick also agreed to submit to a polygraph test to determine the extent of his assets to satisfy the property forfeiture provisions of the plea agreement and the indictment.  Sentencing in this matter is scheduled for December 8, 2008 at 10:30a.m.

The charges to which Folwick pled guilty, relate to a single property in Woodburn, Oregon, which was purchased for $390,000.  The indictment alleges that Folwick, a real estate loan officer, found buyers for the property and then falsified their loan application by overstating their monthly income, failing to disclose that the buyers had an outstanding mortgage on another property, and failing to disclose that Folwick was receiving a $25,000 kickback from the transaction.  At the plea hearing, prosecutors alleged that Folwick had engaged in similar illegal conduct with respect to almost seventy properties.

“This case involves the kind of fraud that is at the very heart of the mortgage crisis,” stated U.S. Attorney Karin J. Immergut.  “The U.S. Attorney’s Office for the District of Oregon has made mortgage fraud a top priority and will continue to hold accountable those who seek to profit from the mortgage industry through lies and deception.”

The charges to which Folwick pled guilty could result in a sentence of up to 30 years in prison.  However, as part of the plea agreement, the parties have agreed to a joint recommendation of a sentence of 63 months in prison.  The court is also free to order restitution to the victim banks.

The case was investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation, and the U.S. Postal  Inspection Service.  The case is being prosecuted by Assistant United States Attorney Allan Garten.

9:38AM

7 indicted in $10 million mortgage fraud allegations

In the following press release on July 9, 2008 R. Alexander Acosta, United States Attorney for the Southern District of Florida, Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, Don Saxon, Commissioner, State of Florida Office of Financial Regulation, and Henry Gutierrez, Postal Inspector in Charge, United States Postal Inspection Service, announced the unsealing of a seven defendant, 28-count mortgage fraud indictment, involving a $10,000,000 mortgage loan scheme to defraud mortgage lenders on properties located in Broward County.

Charged in the Indictment are defendants Anthony Dehaney, 56, and Andrea Dehaney, 42, both of Coral Springs, FL; Howard Gaines, 57, of Delray Beach, FL; Marcia Mestre, 51, of Lauderhill, FL; Beverly Ireland, 51, of Plantation, FL; Donna Patricia Grant, 49, of Wilton Manors, FL; and Angela Manalaysay, 37, of Plantation, FL.

Defendant Anthony Dehaney was arrested late Tuesday afternoon by police officers from the Coconut Creek Police Department in Coconut Creek, Florida.  Dehaney is scheduled to appear for his initial appearance at the West Palm Beach Federal Courthouse today at 1:30 PM before Magistrate Judge Vitunac.  Defendants Beverly Ireland and Donna Patricia Grant were arrested this morning and will also appear in court today at 1:30 PM.  On Monday, July 7, 2008, defendant Howard Gaines appeared in U.S. District Court in Washington, D.C., and waived removal to the Southern District of Florida.  The remaining defendants remain at large.

The Indictment charges Anthony Dehaney with orchestrating a conspiracy to commit and committing mail and wire fraud, and bankruptcy fraud.  Defendants Andrea Dehaney and Howard Gaines, Marcia Mestre, Beverly Ireland and Dona Patricia Grant are all charged with conspiracy to commit mail and wire fraud.  Defendant Angela Manalaysay is charged with one count of substantive mail fraud.

According to the Indictment, defendant Anthony Dehaney and his co-defendants engaged in a scheme to obtain mortgages from various mortgage lenders using straw purchasers.  To execute the scheme, the defendants would submit and cause the submission of false documents, including false loan applications, false employment verification forms, false salary statements, and false bank account statements.

If convicted, the defendants face up to 5 years in prison on conspiracy to commit mail and wire fraud; up to 20 years in prison on each substantive count of mail and wire fraud; and up to 5 years in prison on each substantive count of bankruptcy fraud.

Mr. Acosta commended the investigative efforts of the FBI, the State of Florida Office of Financial Regulation, and the United States Postal Inspection Service. This case is being prosecuted by Assistant U.S. Attorney Jeffrey H. Kay of the Fort Lauderdale Office.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.   Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.        

2:44PM

Six indicted by Dayton Mortgage Fraud Task Force

In the following press release it was announced that agencies participating in the Dayton Mortgage Fraud Task Force today began arresting six current or former Dayton-area residents accused of operating an extensive mortgage fraud scheme affecting 210 residential properties, including 205 in Montgomery County, along with 63 investors, and leading to foreclosure of more than 90 percent of the properties. A federal grand jury here indicted the six yesterday.

Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation; Jose Gonzalez, Special Agent in Charge, Internal Revenue Service Criminal Investigation, and other members of the Dayton Mortgage Fraud Task Force announced the indictment today after agents and officers began arresting the defendants.

The indictment charges the following individuals:
JULIAN M. HICKMAN, age 30, of East Cleveland and formerly of Centerville,
KAMAL J. GREGORY, age 34, of Centerville,
JESSICA A. ZBACNIK, age 41, of Monroe,
ROBERT MITCHELL, age 42, of Vandalia,
EDWARD MCGEE, age 74, of Dayton,
KENNETH O. MCGEE, age 49, of Dayton,

The indictment alleges that the six operated a scheme in which they actively recruited unsuspecting individuals to buy residential properties, the majority of which were low income, dilapidated and otherwise depressed residential properties, at prices artificially inflated above legitimate fair-market values. The alleged scheme involved financing the purchases with $15 million in mortgage loans obtained through fraud committed against 33 lending institutions. The indictment also alleges that the defendants paid “kickbacks” to the buyers they recruited, promised to pay for all repair costs to the properties, and promised to make the mortgage payments until they located suitable renters.

The indictment alleges that the defendants kept $7 million from the loans for their personal benefit.
According to the indictment, the six operated and controlled various real estate, mortgage and title insurance-related businesses and corporations throughout the Greater Dayton area including Commercial Property Advisor Group (CPAG), Diamond Vision Capital Group, First Union Appraisals, Gem City Professional Services (GCPS), Option One Appraisals, JMH Real Estate, River City Appraisers, Alliance Mortgage, Gregory Investments, Inc., KG Enterprises, Mad River Properties, Premier Mortgage Funding of Ohio, Star Point Mortgage, Ohio Financial Group, Mortgages Unlimited, Allied Mortgage, E & A Investments, and KM Investments.

“These charges grew from other successful investigations conducted by the Dayton Mortgage Fraud Task Force,” Lockhart said. “The Task Force will continue to unravel the web of deceit that strangles the neighborhoods where mortgage fraud occurs.”

The 13-count indictment charges all six defendants with one count of conspiracy to commit mail fraud, wire fraud, and money laundering. The indictment also contains six counts of mail fraud, two counts of wire fraud involving a financial institution, and one count of money laundering conspiracy. Each count carries a maximum punishment of 20 years imprisonment. The indictment also charges Hickman with three counts of willful failure to file an income tax return, each punishable by up to one year imprisonment. The indictment includes forfeiture allegations that would require the defendants to forfeit their interests in any property traceable to the fraud.

Agencies participating in the Greater Dayton Mortgage Fraud Task Force in addition to the FBI and IRS include the Ohio Department of Commerce Division of Financial Institutions, the Ohio Attorney General’s Office, the U.S. Postal Inspection Service, the U.S. Department of Housing and Urban Development Office of Inspector General, and the Perry Township Police Department.

An indictment is merely an accusation. All defendants should be presumed innocent until and unless the government proves their guilt beyond a reasonable doubt in court.

3:03PM

5 indicted in Sacramento area scheme allegations

In the following press release United States Attorney McGregor W. Scott announced that late yesterday afternoon (6/27/2008) a federal grand jury returned an eight-count indictment charging ROBERT MARTINSON, 45, of Newcastle, California; his wife, SHERYL HAYDEN, 41, also of Newscastle; KATHLEEN DELAPP, 44, of Auburn, California; MELISSA VILLEGAS, 34, of Sacramento; and her husband RICK VILLEGAS, 31, of Sacramento, with conspiracy to commit bank fraud and other related charges in a mortgage fraud scheme.

This case is the product of an extensive joint investigation by the Federal Bureau of Investigation and the Department of the Treasury, Internal Revenue Service–Criminal Investigations, and the California Department of Real Estate.

According to Assistant United States Attorney Russell L. Carlberg, who is prosecuting the case, the indictment alleges that the defendants schemed to defraud mortgage lenders by submitting fraudulent loan applications in the names of straw buyers and other investors. HAYDEN was licensed as a real estate salesperson. She and MARTINSON operated a branch of MAC Real Estate Services at 7031 Watt Avenue, North Highlands, California. MARTINSON and HAYDEN also owned and controlled “Sheryl’s LLC,” which they also operated from the same location. Beginning in 2003, MARTINSON and HAYDEN purchased dozens of homes throughout the Sacramento area as investment properties and placing title to them in “Sheryl’s LLC.” In 2005, MARTINSON and HAYDEN wanted to unload properties from Sheryl’s LLC as the housing market began to slow, so they recruited straw buyers and others to purchase the homes.

According to the indictment, co-defendants RICK and MELISSA VILLEGAS, who were loan processors, helped MARTINSON create fraudulent loan applications to ensure that the deals would close. They also assisted MARTINSON and HAYDEN in paying substantial kickbacks to at least one straw buyer.

DELAPP was a loan processor for MAC Real Estate Services, and was an account executive for Aegis Mortgage. DELAPP used her position with MAC Real Estate Services to forge signatures and to knowingly forward at least one false loan application in order to ensure the transactions were processed. She also placed the majority of loans with her employer, Aegis Mortgage, for which she received loan broker commissions or related compensation. Defendants also defrauded IndyMac Bank, a federally insured financial institution.

According to the indictment, after the lenders funded the loans, MARTINSON and HAYDEN, through Sheryl’s LLC, would receive substantial loan proceeds from the sales of the homes. DELAPP, RICK VILLEGAS, and MELISSA VILLEGAS would receive fees and other compensation as a result of the fraud.

HAYDEN was arrested today on these charges. RICK VILLEGAS surrendered to the United States Marshals today; MARTINSON and MELISSA VILLEGAS were previously arrested on criminal complaints in this case and released on bond.
The maximum statutory penalty in this case is 30 years in prison and a $1,000,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.

The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

United States Attorney McGregor W. Scott also announced today that in another mortgage fraud matter, PAUL BRIDGE, 43, of Davis, California, pleaded guilty yesterday to paying an illegal referral fee of $7,500 in violation of the Real Estate Settlement Procedures Act of 1974 (RESPA). The fee was paid in connection with the financing of a home through Zone Funding in November 2006. As part of his plea, BRIDGE admitted that between January 2006 and April 2006, he paid a loan coordinator at Long Beach Mortgage (later Washington Mutual) at least $1500 in exchange for the loan coordinator to falsify documents used in real estate loan transactions. BRIDGE faces a maximum sentence of 12 months in prison and a fine of $10,000. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
3:00PM

Two mortgage fraud fugitives arrested in So Cal

In the following press release Keith Slotter, Special Agent in Charge (SAC) of the San Diego FBI Office announced the arrest of two San Diego “Operation Malicious Mortgage” fugitives today. The two fugitives arrested today were Angel Armendariz, age 27 and Rafael Santiago, age 39. The arrests took place in San Diego and Los Angeles, California. Both fugitives were arrested pursuant to a federal arrest warrant involving federal fraud charges.

The first arrest occurred at approximately 8:30 a.m., this morning June 24, 2008, at the San Diego FBI Office located at 9797 Aero Drive, San Diego. At the time of the arrest, Angel Armendariz, age 27, self surrendered to FBI Agents. Armendariz was accompanied by his attorney at the time of his arrest.

Armendariz was fingerprinted and photographed at the offices of the FBI and then transported to the Metropolitan Correctional Center (MCC), 808 Union Street, San Diego, California. Armendariz will remain at MCC pending his appearance before a U.S. Magistrate Judge.

On this same date at approximately 1:30 p.m., FBI Agents arrested Rafael Santiago, age 39, in the 11400 block of Sunset Blvd., Los Angeles, California. Santiago was arrested without incident after the FBI received information from the public concerning Santiago’s location.

Santiago is expected to be booked into the Metropolitan Detention Center (MDC), 535 N. Alameda Street, Los Angeles, California. Santiago will remain at MDC pending his appearance before a U.S. Magistrate Judge.

The FBI appreciates the public’s cooperation in this investigation to date. The FBI is still asking the public’s help to locate Lucette Montane, the last fugitive in this investigation. Please see the information below concerning Lucette Montane.

3:32PM

FBI announces 400+ arrests in Operation Malicious Mortgage

mortgagefraud500a.jpg

Many of you will have read in the news last week that the FBI has announced a major crackdown on mortgage fraud. Because there are so many separate cases and news stories involved we have created page on the site just to cover these events. For now and the foreseeable future we will continue to track new cases and results etc and update the site accordingly.

 


Please click here to see the new page which can also be found in the left hand menu.