3 plead guilty in flipping scam

According to Court Records and a report by Ken Alltucker in the Cincinnati Enquirer, Federal prosecutors laid information’s and plea agreements for 3 men accused in a Mortgage Fraud scheme.

Donald M. Powers Jr., is accused of two counts of which involves the flipping of the property 1794 Carll Street, Cincinnati which was bought by Powers for $37,000 and sold 2 months later for  $78,000. Powers has agreed to plead guilty to the fraud involved in this transaction and an offence against the IRS. Powers formerly ran a title company, Premier Land Title of Glendale. Powers’ deals cost lenders estimated losses or potential losses of $3.5 million.

Click here for the Information and here for the Plea Agreement.

Richard J. Fraser was a loan officer at Charter First Banc in Fairfield who was involved in recruiting investors (straw borrowers) to purchase flipped properties. Fraser cost lenders estimated losses or potential losses of $1.6 million. He pleaded guilty to 3 counts, Conspiracy, Fraud and an IRS offence.

Click here for the Information and here for the Plea Agreement.

David Green purchased the property, 1858 Denham Street, Cincinnati for $19,400 and then 8 months later sold it for $78,000, a fourfold increase. Green also agreed to plead guilty to 3 counts, Conspiracy, Fraud and an IRS offence.

Click here for the information and here for the plea agreement 


Title company owner and employee charged in widespread scheme

US DOJ Press Release - February 1, 2005

Michael A. Battle, the United States Attorney for the Western District of New York, announced that Janet Faticone, age 40, of 705 Mackenzie Court, Webster, New York, and Ronald DiPonzio, age 63, of 990 Center Road, Greece, New York, were charged in a criminal complaint signed by the Honorable Jonathan W. Feldman with mail fraud in connection with a mortgage fraud scheme, in violation of Title 18, United States Code, Section 1341, which charges a maximum term of imprisonment of 20 years, a $250,000 fine, or both.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that Faticone, DiPonzio and Denise Strollo orchestrated a scheme to defraud various individuals seeking to obtain mortgage loans from Strollo. Strollo was a mortgage broker operating a branch office for Professional Mortgage Group located at 1800 English Road, Suites 2 & 4, in Rochester, New York. Faticone was the owner of Pogal Title Agency, Inc. located at 16 East Main Street, Suite 260, Reynolds Arcade Building, Rochester, New York 14614. DiPonzio was an employee at Pogal Title.

The scheme involved charging Strollo’s customers with false and inflated expenses. The defendants did this by falsifying the HUD1 settlement statements, which were required to list and identify the actual costs and expenses associated with a mortgage loan. For example, on or about October 29, 2004, James Washington of 65-67 Barlett Street, Rochester, New York obtained a refinance mortgage loan in the amount of $67,500.00 from Argent Mortgage Company located in White Plains, New York. Strollo was the mortgage broker who assisted Washington in obtaining the loan.

DiPonzio, on behalf of Pogal Title, represented Washington at the closing of the mortgage loan on October 29, 2004. Faticone’s duties included preparing the HUD1 settlement statement. At the closing of the mortgage loan on October 29, 2004, DiPonzio had Washington sign a HUD1 settlement statement which grossly inflated the actual costs and expenses associated with the loan. Faticone prepared this false HUD1 settlement statement. Washington was then charged these false and grossly inflated costs and expenses. Washington was unaware of what the actually costs and expenses should have been.

After the closing, a different HUD1 settlement statement listing what should have been the actual costs and expenses associated with the loan was sent to Argent Mortgage Company to trick Argent Mortgage Company into believing that the defendants only charged Washington the proper costs and expenses. Washington’s name was forged on this document. Faticone also prepared this HUD1 settlement statement.

As a result of the scheme, Washington was charged excess costs and expenses in the amount of $5,925.00, which represented the difference between the total costs listed on the two HUD1 settlement statements. The defendants, however, by sending or causing to be sent to Argent Mortgage Company the HUD1 listing what should have been the actual expenses charged to Washington, concealed from Argent Mortgage Company the amount of costs and expenses the defendants were charging Washington. The defendants then split the fraudulently received proceeds after the closing.


Law firm recovers $400,000 from fraudsters in Jan 05

A press release from the Prieston Group revealed that it’s affiliated law firm, Lanahan and Reilley, LLP had recovered $400,000 from fraudsters in the month of January 2005.

Ryan Thomas, a lawyer at Lanahan and Reilley, said that his firms motto was “mitigate first and litigate second”, a strategy that was bringing great success to his clients.

Read the full Press Release here


Foreclosures distort local market in Akron, OH

Gloria Irwin reported in The Akron Beacon Journal that foreclosure sales have distorted markets, driven down prices and enriched some Real Estate Agents.

Read the full article here



US DOJ Press Release – January 28, 2005

Susan W. Brooks, United States Attorney for the Southern District of Indiana, announced that ANDRE WILLIAMS, 30, of Indianapolis, was sentenced today for crimes related to mortgage fraud activities in which he participated between March 2001 and February 2002. WILLIAMS was sentenced to 35 months imprisonment by U.S. District Court Judge Larry J. McKinney. This case was the result of an investigation by special agents of the Internal Revenue Service and the Federal Bureau of Investigation, working as part of the Southern District of Indiana Mortgage Fraud Task Force.

WILLIAMS previously pleaded guilty on November 4, 2004 to all charges against him, including five counts of mail fraud and four counts of money laundering for obtaining large amounts of money from several lending institutions by submitting false loan applications, use of fraudulent financial documents, and submission of falsely inflated appraisals for the purpose of obtaining mortgage loans. WILLIAMS operated as a mortgage broker for Pinpoint Mortgage, a company which he owned.

According to facts presented at the guilty plea hearing, WILLIAMS fraudulently obtained over $500,000 through five separate mortgage loans. In one of these loans, WILLIAMS fraudulently obtained a $340,000.00 loan on the purchase of his own personal residence. WILLIAMS submitted false applications and appraisals showing the property was being purchased for $400,000, when in fact he only paid $280,000.00 for it. On the other four fraudulent loans, WILLIAMS used the names of two different women whose identity he had stolen to appear to be the purchasers of the properties. WILLIAMS obtained loans for these properties for amounts far in excess of the properties’ values by submitting fraudulent loan applications, W-2 forms, appraisals and other supporting documents to the lenders.WILLIAMS obtained a total of almost $450,000 in loans on these four properties, when in fact, the total value of these properties was only approximately $150,000. On one of these properties, which had a purchase price and true value of $8,000, WILLIAMS obtained a loan of $198,750.

After obtaining the fraudulent loan proceeds, WILLIAMS engaged in various transactions to hide or “launder” the money, primarily by using bank accounts in the names of his wife, daughter and other family members. The fraudulently obtained loans were not repaid as agreed, and are or have been the subject of foreclosure proceedings.

To accomplish his fraudulent activities, WILLIAMS engaged the assistance of several individuals who have previously been convicted of and sentenced for mortgage fraud, including Jabbar Watts who prepared many of the fraudulent appraisals, and Patricia Loving and Deborah Barnes, closing agents who assisted WILLIAMS in the closings on the fraudulent loans. Watts, Loving and Barnes all have been incarcerated for their illegal activities.


Builder/developer pleads guilty in construction loan scam

The Kentucky Post - January 28, 2005

Fairfield , Ohio, Chester Calkins, President of Homes by Calkins, Inc has pleaded guilty to bank fraud charge in connection with a scheme involving homes built in Campbell County. His wife, Antonette, also pleaded guilty to aiding and abetting in bank fraud.

Read the full indictment here and read the plea agreement here

The charges were that construction loans obtained to fund the building of the home were not paid off when the homes were sold. The homes were built between 1999 and 2002 in Cold Springs, Kentucky with funding provided by Bank One, U.S. Bank, Huntington Bank, Provident Bank and Bank of Kentucky.

The indictment mentions that the couple were charged in relation to one property: 532 Fawn Run Drive, Cold Spring. The records show that this property was bought with cash by the new owners for $89,536. However there is still a lien on the property held by Huntington Bank in the sum of $75,565.


Settlement agent being investigated by DA

Tribune-Review - January 27, 2005

According to an article by Richard Gazarik in the Tribune-Review the Westmoreland County District Attorney is investigating Susan Dougherty, of Hempfield Township, who is a former Greensburg real estate settlement agent who is accused in a civil lawsuit of misappropriating nearly $700,000 for her personal use.

A civil complaint has been filed by Stewart Title which alleges that Dougherty stole $682,000 through her firm, Dougherty Settlement Services. The article further states that foreclosure proceedings have been started by First Commonwealth Bank of Indiana on a Greensburg house Dougherty purchased in 2001.

Stewart filed suit last summer, charging that Dougherty failed to deposit money from the sale of homes into an escrow account and alleging that she used the money for personal expenses. The suit centers on money that home buyers paid to Dougherty at closings. The money was supposed to be deposited into an escrow account to pay closing costs and other fees.

The complaint accuses Dougherty of “fraudulent misappropriation and conversion” of the money for her “exclusive benefit.” The company commissioned an audit that revealed Dougherty was involved personally in the misappropriation, the lawsuit contends.

Dougherty’s lawyer has filed documents with the court denying his clients guilt.


Loan Officer convicted in scam that targeted Latino's

Ventura County District Attorney Press Release - January 26, 2005


District Attorney Gregory D. Totten announced today that the Consumer and Environmental Protection Unit filed a 27-count felony complaint against Edgar Mauricio Berrazueta aka Edgar Mauricio Berrazueta Gonzalez (DOB 10/8/61), an Ecuadorian national residing in Camarillo, charging him with grand theft, forgery, manufacture of false identification documents, attempting to dissuade witnesses, and special allegations under the aggravated white-collar crime statute, and excessive-takings enhancements. Ventura County Superior Court Judge Kevin McGee issued a temporary restraining order freezing Berrazueta’s assets and properties so that they may be used to pay criminal fines and restitution to victims upon Berrazueta’s conviction.


Berrazueta is employed as an assistant loan officer by Pacific First Bancorp in Oxnard, specializing in sub-prime home loans. Berrazueta allegedly promised homeowners lower monthly payments on their home loans if they refinanced through his company. Instead, the homeowners received worse loans than they already had, and loans with higher payments, for which Berrazueta and his company received thousands of dollars in commission fees. Berrazueta misrepresented and failed to disclose the true interest rates, fees, penalties, payment amounts and costs to refinance these home loans. The homeowners were not aware of the terms of their new loans because all of the documentation was in English and the homeowners read and speak only Spanish.


When Berrazueta later became aware that some of his customers were cooperating with the District Attorney’s  investigation, he went to their homes or place of work and pressured them not to pursue charges against him.


Some of the loans arranged by Berrazueta were supposed to be “cash-out” refinances. However, Berrazueta concealed this fact from the homeowners, intercepted their cash-out checks, and deposited them (in amounts up to $15,000) into his own bank accounts by forging their signatures on the checks.


During the execution of a search warrant at Berrazueta’s residence, several fraudulently manufactured social security cards were obtained. Berrazueta admitted to manufacturing these cards to enable him and others to misrepresent their status as United States citizens to their employers.