In a press release the Manhattan Distrcit Attorney announced that MICHAEL A. SZEGDA, an attorney who formerly practiced at 300 East 42nd Street, was retained to represent Delwar Hussain in the sale of a property in upper Manhattan in 2001. The proceeds of the sale, $350,000, were placed in SZEGDA’s escrow account. The completion of the transaction was delayed due to litigation involving the property until 2003. Despite the resolution of that litigation and repeated requests that the escrow funds be dispersed to Mr. Hussain, SZEGDA has never done so. SZEGDA was suspended from practice in September, 2005 after failing to respond to complaints of ethical misconduct filed against him with the Departmental Disciplinary Committee. SZEGDA has been charged in a felony complaint with Grand Larceny in the Second Degree.
Entries in Closing Agent/Attorney (319)
The St Louis Business Journal reports that the former vice president of a Clayton title insurance agency pleaded guilty Wednesday for his role in a $2.8 million mortgage fraud scheme, said U.S. Attorney Catherine Hanaway. Thomas Kurzenberger Jr., 37, of Ballwin, pleaded guilty to one felony count of mail fraud. He faces a maximum penalty of 20 years in prison and/or a $250,000 fine, and restitution is mandatory. He is scheduled to be sentenced in January.
Click here for the Information (defendant waived his right to prosecution by Indictment). A copy of the plea agreement is not yet available.
Click here to read the Press Release from US Attorney Catherine L. Hanaway
Between January 2000 and June 2005, Kurzenberger withdrew nearly $2.8 million from several of Title Insurers Agency ‘s escrow accounts. He used $1.25 million to pay his personal credit card bills and the rest for general operating expenses of the company.
In addition, Kurzenberger continued to make escrow agreements and accepted escrow deposits from customers without disclosing that the agency’s escrow accounts were deficient. Title Insurers Agency at 226 S. Meramec Ave. collapsed in June 2005. Its two underwriters were Chicago Title Insurance Co. and Columbian National Title Insurance Co.
Thomas B. Kurzenberger Jr., a former vice president of the business, was sentenced on Jan. 24 to six years in prison for taking $2.7 million from customers’ escrow accounts.
Prosecutors said Kurzenberger Jr. had a cocaine addiction and used more than $162,000 to pay off credit card charges at a strip club in Illinois.
On January 26th, 2006n the DOJ released the following press release
St. Louis , Missouri : Thomas Kurzenberger, Sr., the President of a Clayton title insurance agency has been indicted on mail and wire fraud charges involving a $5.7 million mortgage fraud scheme, United States Attorney Catherine L. Hanaway announced today.
After Title Insurers Agency collapsed in June 2005, many individuals and entities suffered losses, some of which were caused by Mr. Kurzenberger’s withdrawals from customer escrow accounts. People who believed their money was being held in escrow pending a loan’s closing and those who believed their money was being held in construction disbursing escrow accounts lost in excess of $1,000,000. Chicago Title Insurance Company covered over $200,000 of insufficient funds escrow checks and construction disbursing checks; First American Title Insurers Company covered over $4.5 million worth these checks.
“As we have said previously, escrow means escrow,” said Hanaway. “When title company executives get into customers’ escrow funds, they will be prosecuted.”
THOMAS KURZENBERGER, SR. , 64, Cerromar Drive, Eureka, Missouri, was indicted by a federal grand jury on one felony count of mail fraud and four felony counts of wire fraud. Additionally, Kurzenberger was charged with a forfeiture count, which, if convicted, will require the forfeiture of any property derived from the illegal activity.
According to the indictment, between January 2000 and June 28, 2005, Kurzenberger, Sr. withdrew approximately $1,517,836 from customers’ escrow accounts to cover general operating expenses of Title Insurers Agency. Additionally, between January and June 2005, Kurzenberger, Sr. continued to enter into escrow agreements, and accepted escrow deposits from customers, without disclosing that there was a deficiency in the agency’s escrow accounts.
The indictment states that on February 24, 2005, after Chicago Title Insurers discovered approximately $250,000 missing from their construction disbursing account, Kurzenberger, Sr., transferred the same amount from the main escrow account at First Bank, through his personal bank account back to the construction disbursing account to make it appear that he reimbursed the missing money rather than just moving it from one account to another.
If convicted, Kurzenberger faces a maximum penalty of twenty years in prison and or a $250,000 fine, per count of the indictment.
Title Insurers Agency, Inc. was formed in 1981 and had its main office at 226 South Meramec Avenue, Clayton, Missouri. They used two underwriters which were Chicago Title Insurance Company and Columbian National Title Insurance Company (now First American Title Insurance Company).
Hanaway commended the work performed on the case by the United States Postal Inspection Service, the Federal Bureau of Investigation, Department of Housing and Urban Development-Office of Inspector General and Assistant United States Attorney Jeffrey Jensen, who is handling the case for the U.S. Attorney’s Office.
The charges set forth in an indictment are merely accusations, and each defendant is presumed innocent until and unless proven guilty.
On April 12, 2006 the St. Louis Post Dispatch reported that Thomas Kurzenberger Sr and his Andrea had been found dead at their home in Eureka, MO in what is apparantly a double suicide.
Police and Prosecutors say that the couple were distraught about the indictment of Thomas Sr, their son’s conviction and humiliated by the information that came out at their son’s trial. Court documents from the trial revealed that Kurzenberger Jr. spent from $200 to $500 a night at the Diamond Cabaret in Sauget, renamed the Penthouse Club, beginning in March 2002. There were more than 220 visits thereafter, with single-day charges peaking on July 28, 2004, at $6,666. He visited the club as often as five times a week, prosecutors said, and routinely tipped hundreds of dollars.
An attorney for Kurzenberger Sr., Art Margulis, is reported to have said that his client acted only to keep the company afloat at a time of losses, "and not for any improper purposes."
Kurzenberger Sr. was due in U.S. District Court in St. Louis today to plead guilty, said another of his lawyers, William Margulis. Under an agreement with prosecutors, Kurzenberger would have faced a prison sentence and would have had to make restitution, William Margulis said
The York Daily Record reports that Harrisburg real estate attorney Michael Sedor will begin serving his prison sentence Nov. 28 for his role in a conspiracy to defraud the government in connection with the Barwood Estates development in Dover Township… . Sedor, 59, pleaded guilty in May 2003.
He was sentenced to seven months in prison followed by seven months home confinement, fines of $5,100, and two years of supervised release when he is released from federal custody… . U.S. Attorney Thomas A. Marino said Sedor was the settlement agent for most of the Barwood home sales. He was convicted of defrauding U.S. Department of Housing and Urban Development’s mortgage insurance program by disbursing loan proceeds knowing that the seller/developer was providing home buyers with their down payment and closing costs, which is in violation of HUD regulations.
STATEN ISLAND, NY - Richmond County District Attorney Daniel M. Donovan, Jr. announced today the arrest, Wednesday evening, of attorney Dennis Vourderis (DOB: 4/27/1955) of the Tottenville section of Staten Island on charges of Grand Larceny in the 2nd and 4th Degrees, Criminal Possession of a Forged Instrument in the 2nd Degree, and Criminal Possession of Stolen Property. Vourderis, whose license to practice law has already been suspended in New York is accused of bilking over $155,000 from two clients and cashing two forged checks stolen from a Staten Island real estate firm.
District Attorney Donovan stated, “Dennis Vourderis is alleged in this complaint to have betrayed the fiduciary responsibility placed in him by his clients, by purposely misappropriating, for his personal use, the funds remitted to him for financial transactions. As a result of these actions three individuals are facing serious financial issues and one victim is even facing bank foreclosure of his home. My office is meeting with additional clients of the defendant who may have been similarly victimized. We believe there may be scores of additional victims across the metro area and I would encourage them to contact my office as soon as possible.”
On December 14, 2004 Vourderis represented a 51 year old male resident of West New Brighton, in the refinancing of the victim’s home with a loan of approximately $190,000. The defendant was to pay-off the victim’s first mortgage valued at approximately $135,000 and a second mortgage valued at approximately $37,000; with the victim receiving $7,000. The defendant is alleged to have only paid the $37,000 mortgage in September 2005, while neither paying the first mortgage nor refunding the balance of approximately $150,000 to the victim. As a result of the alleged actions of the defendant, the victim’s home is currently in foreclosure.
The defendant is also alleged to have stolen $5,400 from a 36 year old male who had retained his representation on January 20, 2005 to facilitate the closing of the sale of his residence in the Port Richmond section of the borough. The victim provided the defendant with $6,000 to be held in escrow and ultimately to be dispersed in the amount of $5,300 to pay outstanding debts of the victim; with $700 ultimately to be released back to the custody of the victim. The defendant is alleged to have only paid $600 of the outstanding debts and failed to refund the victim the remaining balance.
In May of 2005, while utilizing desk space within a real estate brokerage located in the Pleasant Plains section of the borough, Vourderis is alleged to have deposited two checks, in the amounts of $67,000 and $68,000, from accounts belonging to the real estate firm, that were reported to be stolen and forged by the holder of the accounts.
The investigation is being conducted by Richmond County District Attorney’s Detective Investigators Gary Mercer and Robert Keating under the supervision of Chief Investigator Robert Turbiak. The case is being prosecuted by Assistant District Attorney David Frey, Computer and Technology Investigations Unit Chief, under the supervision of ADA Mario Mattei, Chief of the Investigations Bureau.
Anyone who believes that they may have been victimized by Dennis Vourderis are encouraged to call Detective Investigators Mercer or Keating at 718-876-6300. The defendant is schedule to be arraigned Thursday in Staten Island Criminal Court. He is represented by Patrick Broderick, Esq.
The top count, Grand Larceny in the 2nd Degree, is a Class C felony punishable by up to 15 years in prison. The charges are merely accusations, and the defendant is presumed innocent until and unless proven guilty.
On June 15, 2006 the Richmond County District Attorney filed a 15 count indictment against Vourderis which laid charges of Grand Larceny and Forgery.
Sally Quillian Yates, Acting United States Attorney for the Northern District of Georgia, and James H. Byers, Special Agent in Charge, U.S. Secret Service, Atlanta Field Office, announce that Atlanta real estate lawyer, R H H, III (all charges dismissed on March 14, 2007 - see below), 38, and former lawyer SHAREL L. PAYNE, 37, were arraigned in federal court today before United States Magistrate Judge Janet F. King on mortgage fraud charges made in a superseding indictment returned by a federal grand jury on October 19, 2005.
This superceding indictment follows that issued earlier in the year against Nathan Parker and others. Click here for that blog entry.
Click here for the indictment, please note it is a 3.2 MB file - 100 pages long - and may take a little while to download on a dsl connection and a while longer on a dial-up connection.
The properties mentioned in the indictment are (all in Atlanta):
86 Burbank Avenue
3115 Rilman Road
246 Atlanta Avenue
272 Atlanta Avenue
537 Angier Avenue
3708 Austin Woods Court
15280 Highgrove Road, Alpharetta
199 Grffin Street
2026 Emery Place
955 Harte Drive
577 Rankin Street
64 Ormond Street
908 Crew Street
819 Glendale Terrace
According to Yates H and PAYNE entered not guilty pleas to the charges and bond was set for each at $100,000. H is a principal in the Atlanta law firm of R H H, III and Associates. PAYNE was a principal in the Atlanta law firm of the Payne Group.
In addition to HIPPE and PAYNE, the superseding indictment charges Atlanta lawyer MICHAEL BROCHSTEIN, 49, with mortgage fraud, conspiracy, money laundering and related violations in a multi-million dollar mortgage fraud scheme. BROCHSTEIN made his initial appearance before Magistrate Judge E. Clayton Scofield, III on October 25, 2005, where bond was set at $100,000. He is scheduled to be arraigned on the charges on Wednesday, November 2, 2005, before Magistrate Judge Janet F. King. BROCHSTEIN is a partner in the law firm of Brochstein & Bantley.
The indictment supersedes the original indictment filed January 27th, 2005. The superseding indictment also charges Atlanta mortgage broker/loan officer NATHAN PARKER, a/k/a “Nathan Pasha,” 48, his brother, Atlanta loan processor DANIEL PARKER, III, 54, Atlanta real estate appraiser CARLA KINSEY, 40, Atlanta real estate investor DAVID PINNIX, 42, and Atlanta real estate investor LARRY BOLTON, 56.
The superseding indictment charges that beginning in January 1999 and continuing until October 2001, the defendants defrauded financial institutions and other mortgage lenders by recruiting and causing straw borrowers to submit false qualifying information and false documentation to obtain mortgage loans to buy residential properties. The defendants used stolen identities and false Social Security numbers for some of the loan applicants. In other cases, the defendants paid straw borrowers to obtain mortgage loans with false employment, income, assets and liabilities. The indictment charges that the applications for numerous loans totaled approximately $4 million.
The superseding indictment charges that the defendants used fraudulent appraisals, prepared by CARLA KINSEY and others, to inflate the market value of the properties. The defendants also inflated the contract sales prices, thus, substantially increasing the amounts that the lenders would lend on the properties. The superseding indictment also charges that PAYNE, BROCHSTEIN and H, created materially false settlement statements, which failed to disclose to the lenders, their clients, the accurate receipt and disbursement of loan proceeds, thereby facilitating their co-conspirators’ efforts to conceal the true property sales prices from the mortgage lenders. The superseding indictment also alleges that at certain closings BROCHSTEIN, PAYNE and H allowed other participants in the scheme to close on properties without the down payments that were required in the sales contracts. The superseding indictment further alleges that BROCHSTEIN, PAYNE and H failed to disclose to the lenders that the purchasers did not have the required down payments at closings.
According to the public documents filed in this case, the properties are all residential houses in the metro Atlanta area. Some of the lenders and financial institutions which were victimized in the mortgage fraud scheme are located in the Atlanta area.
Members of the public are reminded that the superseding indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
On March 14, 2007 the charges against R H H were dismissed by prosecutors in a Government’s Motion for Leave to File Dismissal. Please click here to read the motion which was accepted.
Caryn Tamber reports for The Daily Record, Baltimore, that according to a class action lawsuit filed in Baltimore County Circuit Court this week, a title company and a mortgage broker formed a sham settlement firm to bilk borrowers. The suit was filed by Patricia M. and Timothy J. Benway of Baltimore. The Benways allege that they took out a $36,000 second mortgage last year using Access One Mortgage Group as the broker and Resource Real Estate Services as the title company, for which they paid “exorbitant” title fees of $1,165.
Access One and Resource Real Estate set up a company called Clipper City Settlement Services Inc. so they could charge higher fees to borrowers, according to the suit. One of the Benways’ attorneys, Kieron F. Quinn, said he does not know the size of the class of borrowers affected by the alleged scam.
For all the defendants, the Benways allege violations of the Real Estate Settlement Procedures Act and the Maryland Consumer Protection Act, negligent misrepresentation, fraud and civil conspiracy. They also claim that Access One violated Maryland’s Finders Fee Act and Resource Real Estate aided and abetted those violations, and that both companies conspired to violate that law.
The suit claims that Resource Real Estate and Access One fraudulently listed Clipper City’s name on settlement documents as having provided title or closing services, allowing it to charge fees between $400 and $1,000 for each settlement.
“The fees or other consideration was received or paid to Access One without disclosing to the borrower that the consideration was a kickback to reward the mortgage broker for the referral of the closing settlement work to Resource Real Estate,” the complaint reads.
“In so doing, Access One and Resource Real Estate were able to systematically and deceptively hide and conceal the fact that Clipper City was a sham ‘Affiliated Business Arrangement’ and served no purpose other than to: (1) permit the mortgage broker to pocket additional monies, paid by the borrower, while providing no additional goods or services; and (2) facilitate the payment of a referral fee and kickback at the increased expense of the borrower and in violation of the borrower’s rights under state and federal law.”
Jimmie E. Gates reports for The Clarion-Ledge in Jackson MS reports that an attorney, a real estate broker, a real estate agent and three others are the latest to face federal charges for their alleged role in submitting false information to obtain more than $3 million in mortgages. The alleged scheme was uncovered during an ongoing IRS-FBI investigation into mortgage lending practices. The federal probe has resulted in 10 arrests this year. Facing money laundering and wire fraud charges are Greenwood attorney Bobby F. Fisher Jr., Ridgeland real estate broker John William Emory III and Greenwood real estate agent Jim L. Pruett.
"They all are cooperating and have agreed to waive formal indictment and plead guilty," U.S. Assistant Attorney Cindy Eldridge said. Each faces a maximum penalty of 30 years in prison and a $1 million fine.
Click the relevant text for: 1.Goss Indictment; 2.Emory Indictment; 3. Fisher Indictment; 4. Pruett indictment
Joni Lynn Goss, who once owned a mortgage company with her ex-husband, is charged with wire fraud. Ernest Wayne White Jr ., who worked for a mortgage company, is charged with wire fraud.Daniel Floyd, who worked for Fisher, is accused of failure to report mail fraud and wire fraud.
From September 1999 to the indictment, "Fisher and others successfully obtained loans for approximately 48 borrowers totaling more than $2.5 million by creating false documentation and making false entries on documents submitted to the lenders to obtain the loan," the indictment says.
Emory is accused of recruiting prospective borrowers who typically couldn’t afford the loans. "Emory, or others at their direction, would enter false information onto the loan application forms in an effort to induce the lender to make the loan," the indictment says.
The alleged fraud involving Emory totals about $100,000 and occurred from June 2000 through October 2002 in Hinds County and elsewhere when he worked for Wholesale Mortgage Inc. and Mississippi Mortgage Inc.
Pruett is accused of successfully obtaining loans for approximately 17 borrowers totaling $800,000 by creating false documentation and making false documentation and false entries on documents.
The Greenwood Comonwealth reports that on Friday 13th, January 2006 Fisher, Pruett, White, Goss and Flloyd all pleaded guilty and will be sentenced in April 2006.
Nassau County District Attorney Denis Dillon announced today the filing of Grand Larceny charges against attorney Kenneth B. Carnesi, 53 years old, last known address 114 Wyatt Road, Garden City. Carnesi is accused of stealing clients’ funds amounting to $247,102.81. Carnesi is charged with two counts of Grand Larceny in the Second Degree, which is punishable by up to 15 years in prison; one count of Grand Larceny in the Third Degree; and one count of Grand Larceny in the Fourth Degree. Count 2 charges Carnesi with Grand Larceny in the Second Degree in that Carnesi stole $51,090.13 from another client, between November 3, 2003 to November 6, 2004 in connection with various legal matters.
Click here for the Nassau County court records for this matter.
Count 1 alleges that Carnesi stole $148,562.68 from a client between August 5, 2002 and December 14, 2002. The stolen money had been held in escrow in regard to two separate real estate transactions.
Count 3 charges Carnesi with Grand Larceny in the Third Degree for having stolen $45,450 from other clients, between April 11, 2003 to September 14, 2004. The stolen funds had been held in escrow in a mortgage foreclosure action.Count 4 charges Carnesi with Grand Larceny in the Fourth Degree for having stolen $2,000 from another client, between March 2, 2004 to September 14, 2004 in regard to false representations that Carnesi made to his client concerning the progress of a legal matter. Carnesi was disbarred on the court’s acceptance of his resignation as an attorney on November 29, 2004. He was prosecuted federally on Money Laundering charges on which he was sentenced October 14, 2005. He is presently housed at the Queens Private Correctional Facility.
Carnesi will be arraigned later today in First District Court in Hempstead. The charges are merely accusations, and the defendant is presumed innocent until and unless proven guilty.