Phoenix business owner arrested for ID Theft and mortgage fraud - used dead persons SSN

In the following press release the Maricopa County Sheriff’s office announced that deputies executed search warrants this morning at the Phoenix based business Aracruz International Granite located at 2310 W. Sherman St. and at the business owner’s home in Anthem located at 42514 N. Bradon Ct.

Deputies received information through Sheriff Joe Arpaio’s illegal immigration hotline that Raphael Libardi, the co-owner of the business, is in the country illegally from Brazil and that he was using the social security number of a deceased person.

Libardi was booked on felony identity theft and mortgage fraud charges under suspicion of using the deceased person’s social security number to purchase two vehicles and two homes (one of which has been foreclosed on). Two adult children of Libardi’s, Ive Libardi (25) and Isac Libardi (20), were also arrested at the business for suspicion of being in the country illegally.

Aracruz International is a supplier of granite counter tops which employs between 15-20 people and is believed to generate about $1.9 million in annual sales.

During the execution of that warrant other employees, some of which were related to Libardi, were also found to be in the country illegally.  

It has been noted that Libardi has donated $5,000 annually to the Republican Congressional National Committee.

During the course of 21 employer sanctions investigations, the Sheriff’s Office has arrested 166 out of 262 illegal aliens for felony identity theft and forgery charges.

“Identity theft is a serious crime. Despite the fact that it seems the President of the United States and the U.S. Secretary of Homeland Security will shift their focus to only go after employers, I will continue to pursue all illegal aliens in business establishments who take away valuable jobs from U.S. citizens” Arpaio says.

Former mortgage broker pleads guilty in Minnesota flipping scheme

In the following press release Frank J. Magill, United States Attorney for the District of Minnesota announced thata 29-year-old Minneapolis man pleaded guilty today in federal court to wire fraud and tax evasion in connection with a mortgage fraud scheme.

Frederick Earle Deen, III, pleaded guilty to one count of wire fraud and one count of tax evasion. He entered his plea July 1 in St. Paul before United States District Court Judge Richard Kyle. Deen was charged on April 21. According to Deen’s plea agreement, he admitted that from September 2005 to July 2007 he, along with four unnamed individuals, knowingly and willfully engaged in a scheme to commit wire fraud. _____________________________________________________________________________________________

Additional Materials

• Press Release
• Criminal Information

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Deen was a loan officer and part-owner of Legacy Lending, a mortgage brokerage company in Minnesota. The others involved in the mortgage fraud scheme include the co-owner of the mortgage brokerage company, a residential real estate appraiser, a real estate agent and someone who recruited individuals to act as “straw buyers” for real estate transactions in which mortgage loans were obtained for dollar amounts substantially in excess of the purchase price.

Deen admitted that payments from those mortgage loan proceeds were concealed and diverted to himself and his co-conspirators through the use of fraudulent underwriting and closing documentation which they submitted to lenders to induce the lenders to provide mortgage loans. The funds in excess of the purchase price were then misappropriated by the scheme’s participants.

Deen also admitted that he acted as the loan officer on most of the transactions, causing fraudulent loan application documentation to be provided to potential lenders for purposes of loan underwriting. The fraudulent documentation misrepresented the true terms of the proposed transaction, such as falsely identifying the purchaser; falsely indicating that the property would be “owned-occupied;” inflated the borrower’s income and/or assets; inflated the purchase price of the property; inflated the appraised value of the property; failed to disclose to the lenders that funds in excess of the actual purchase price would be misappropriated by the co-conspirators; and concealed payments that were to be made from the loan proceeds to Deen and others.

This case is the result of an investigation by the Federal Bureau of Investigation and theInternal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorneys Timothy C. Rank and Christian S. Wilton.

The false representations and omissions were material because mortgage lenders rely on the actual purchase price paid by the buyer to assure that the loan is fully collateralized by a realproperty of a sufficient value. The fraudulent payments of loan proceeds to the co-conspirators were also concealed from the lenders.

Individual B owned the mortgage brokerage company through which most of the fraudulent mortgage transactions were conducted. In every transaction, in addition to the concealed payments, Deen admitted that he and Individual B received substantial fees for arranging the fraudulent transactions.

In order to support the falsely overstated purchase price, the conspirators obtained fraudulently inflated appraisals from Individual C, the real estate appraiser. As a result, Individual C was paid funds in excess of a standard appraisal fee.

Individual D acted as the buyer’s real estate agent on multiple real property transactions, and knew that the documents submitted to the lenders falsely identified the straw buyers as the purchaser of the properties when in fact the actual purchaser was Individual E. Individual D was paid substantial commission payments on these fraudulent transactions.

Individual E recruited straw buyers and was paid a portion of the funds misappropriated by the scheme’s participants.

Deen admitted participating in 27 separate fraudulent real estate transactions, worth approximately $18 million in total loan proceeds. There was at least $2 million made in fraudulent concealed payments.

In order to effect the scheme, Deen admitted that on Oct. 17, 2006, in furtherance of the scheme he knowingly transmitted by means of wire communications more than $575,000 in mortgage loan financing for the purchase of a residence in Otsego. During tax years 2006 and 2007, Deen also admitted that he evaded his personal income taxes on approximately $200,000 in taxable income and owes more than $50,000 in income tax.

Deen faces a potential maximum penalty of 20 years in prison on the wire fraud count and five years on the tax evasion count. Judge Kyle will determine Deen’s sentence at a future date.  

13 charged in $9 million Ohio flipping scheme which involved 30 homes

In the following press release Ohio Attorney General Richard Cordray and the Ohio Organized Crime Investigations Commission announced today details of an investigation which has led to the indictments of 13 people alleged to have perpetrated a $9 million mortgage fraud scheme involving more than 30 properties in central Ohio.
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Additional Materials

• Press Release
• Indictment [1.7mb]

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Benjamin Tubbs, 49, of Pickerington, Kevin Murphy, 50, of Blacklick, and Karl Mullins, 33, formerly of Columbus and now residing in Florida, are alleged to have acted as the mortgage brokers and orchestrators of a scheme to buy and sell houses at highly-inflated prices and to falsify loan documents in order to skim ten of thousands if not hundreds of thousands of dollars from each sale.

Tubbs, Murphy and Mullins operated under the business names of Premier Mortgage Funding, North American Real Estate Services, One Residential and other names in a scheme that allegedly netted the group millions of dollars in fraudulent loan proceeds. Tubbs, Murphy and Mullins face charges including engaging in a pattern of corrupt activity, theft, receiving stolen property, and money laundering.

Cynthia Underdew, 53, of Columbus, also alleged to be among the primary orchestrators of the scheme, acted as a loan officer and mortgage loan coordinator for many of the loans involved, though investigators indicate she was not licensed to perform such work. Charges against Underdew include engaging in a pattern of corrupt activity, theft, identity fraud, falsification, and receiving stolen property. Underdew and Tubbs also are alleged to have fraudulently purchased properties using the personal identifying information of other individuals without their authority or permission.

Karen Axline, 48, of Granville, was indicted on charges of engaging in a pattern of corrupt activity and receiving stolen property. Axline operated the now-defunct Granville Title Agency in Granville and is alleged to have colluded with Tubbs, Murphy, Mullins and Underdew in structuring many of the transactions to deceive lenders.

Kevin Gray, 48, of Reynoldsburg, is alleged to have been a co-conspirator who purchased and sold a number of properties and is alleged to have laundered thousands of dollars in illicit proceeds. Charges against him include engaging in a pattern of corrupt activity, theft, money laundering, and receiving stolen property.

Real estate agents Nina Masseria and Tim Arrington of Carriage Trade Realty are alleged to have been involved in four of the sales and each was indicted on a charge of engaging in a pattern of corruptactivity. Appraisers Joseph Colegrove and Scott Walisa and Assistant Appraiser Terri White face charges including engaging in a pattern of corrupt activity, theft, and falsification.

Earron West, 38, of Columbus, allegedly acted as a loan officer in three of the transactions in question and was indicted on charges including engaging in a pattern of corrupt activity, theft, falsification, money laundering, and receiving stolen property. Nina Dearing, 29, of Columbus, is accused of purchasing and selling some of the properties involved and faces charges including engaging in a pattern of corrupt activity, theft, receiving stolen property, and money laundering.

Investigators report that more than 30 loan transactions are at issue in this case and some properties were recycled through multiple fraudulent loan transactions. It is alleged that loan applications and documents were falsified on behalf of borrowers, and that orchestrators made down payments allowing borrowers to secure loans in which tens of thousands of dollars were laundered through fictitious home contractor companies.

Further, most of these loans ended in foreclosure, exacting a detrimental toll on the neighborhoods within which the properties are located. Many of the houses are located in urban areas of Columbus that have experienced a stream of foreclosures in recent years.

Some of the properties involved in the transactions in question include homes located at the following Ohio addresses:
988 S. Champion, Columbus
57 S. Champion, Columbus
1001-1003 Linwood, Columbus
1638 Granville, Columbus
471 S. Champion, Columbus
70 Wilson, Columbus
1590 Cordell, Columbus
1611 Sullivant, Columbus
49 N. Ohio, Columbus
932 Bryden, Columbus
1227 Bryden, Columbus
357 Linwood, Columbus
153 Monroe, Columbus
1000 Studer, Columbus
256 E. North Broadway, Columbus
106 Tar Heel, Delaware

The indictments come as the result of a multi-agency collaboration among local, state and federal investigators in conjunction with the Ohio Organized Crime Investigations Commission. That collaborative body, known as the Central Ohio Mortgage Fraud Task Force, investigated the case over the past year. The task force is led by the Columbus Division of Police Economic Crime Unit. Other members of the task force include the Office of Inspector General for Housing and Urban Development, the Upper Arlington Police Department, the office of Ohio Attorney General Richard Cordray, the Internal Revenue Service, the U.S. Postal Inspection Service and the office of Franklin County Prosecutor Ron O’Brien.

In addition to the indictments and resulting arrests today of Murphy, Underdew, Gray, Masseria and
White, task force partners report that a 2002 Jaguar XJ Sport automobile was seized; the car is believed to have been purchased with proceeds from the scheme.

Investigators report that as the investigation continues, more people could be charged.

Husband and wife indicted in Staten Island title fraud allegations

In the following press release Richmond County District Attorney Daniel M. Donovan, Jr. today announced that Joseph DeVito (DOB: 2/20/1970) and his wife, Mary Ann Palladino-DeVito (DOB: 3/24/1968), (both pictured below) former residents of Staten Island now residing in Wilkes-Barre, Pennsylvania have been arraigned on an indictment alleging that from 2002-2004 they embezzled over $1 million from homeowners seeking to clear titles, as well as their franchise’s parent company. The defendants are also accused of failing to pay personal income tax to the State of New York for the tax years of 2002 through 2004.

The defendants, who formerly resided on Kramer Street, Staten Island are accused of a top count of Grand Larceny in the 1st Degree, a Class B felony, punishable by a maximum penalty of up to 25 years in prison.
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Additional Materials

• Press Release
• Indictment

Picture courtesy of silive.com___________________________________________________________________________________

District Attorney Donovan stated, “As part of this mortgage fraud scheme, these defendants are alleged to have victimized new homeowners and their franchiser by accepting payment for mortgage fees, mortgage taxes, customer fees, real property filing fees, and escrow account funds and then misappropriating the funds for their own purposes. They are also alleged to have failed to file any tax returns to the State of the New York, depriving our state of essential funds for services such as healthcare and education.”

The District Attorney further stated that the defendants were franchisees of Fidelity National Title, a Jacksonville, Florida based title insurance company. The defendant’s operated their business from an office suite located at 1100 South Avenue, Staten Island.

The defendants [were] arrested Tuesday in Pennsylvania and were arraigned on the charges today in State Supreme Court before Justice Leonard P. Rienzi who ordered the defendants held on $150,000 bail until their next court date on July 22, 2009. In addition to the top charge of Grand Larceny in the 1st Degree, the defendants are also charged with one count each of Repeated Failure to File Personal Income and Earning Taxes, a Class E felony.

The case against Joseph DeVito and Mary Ann Palladino-DeVito is being prosecuted by Assistant District Attorney Om Kakani of the Investigations Bureau under the supervision of Assistant District Attorney Mario F. Mattei, Bureau Chief. The investigation was conducted by Richmond County District Attorney’s office forensic accountant Dominick Perrotta.

Joseph DeVito and Mary Ann Palladino-DeVito are represented by Manuel Ortega, Esq. and Michael Harding, Esq, respectively. The public is reminded than an indictment is merely an accusation, and that the defendants are presumed innocent until proven guilty in a court of law.

Beazer Homes agrees to pay up to $53 million to settle mortgage fraud claims

In the following press release the Department of Justice announced that Beazer Homes USA Inc. has agreed to pay the United States $5 million dollars, plus contingent payments of up to $48 million dollars to be shared with victimized private homeowners, to resolve allegations that it, and Beazer Mortgage Corp., were involved in fraudulent mortgage origination activities in connection with federally insured mortgages. Beazer Homes, which is headquartered in Atlanta, operates in at least 21 states.

The U.S. Department of Housing and Urban Development’s Federal Housing Administration guarantees home mortgage loans for low and low-to-moderate income families. The settlement resolves allegations that when Beazer Mortgage Corp. made Federal Housing Administration (FHA) insured mortgage loans for the purchase of homes built by Beazer Homes USA Inc., the companies fraudulently and improperly: 1) required purchasers to pay “interest discount points” at closing, but then kept the cash and failed to reduce interest rates; 2) provided cash “gifts” to home purchasers through certain charities, so purchasers could come up with minimum required down payments, with assurances the “gifts” would not have to be repaid, and then increased home purchase prices to offset the amount of the gifts; 3) obscured which of its branches made defaulting mortgage loans to avoid FHA detection of excessive default rates, and; 4) ignored “stated income” requirements in making loans to unqualified purchasers.

As a consequence, unqualified home buyers were induced to enter into FHA insured mortgages, interest rates for and the amount of FHA insured mortgages were improperly inflated, and Beazer Mortgage branches involved in fraudulent activity were hidden from the FHA. In some instances, mortgages that resulted from these fraudulent activities defaulted. When they did so, holders of the loans made FHA mortgage insurance claims and the FHA was wrongfully required to pay inflated claims, and to pay for the management, maintenance, rehabilitation and marketing of defaulted properties.

The settlement is in conjunction with a Deferred Prosecution Agreement (DPA) entered into between the companies and the U.S. Attorney’s Office for the Western District of North Carolina, also announced today. The DPA provides for restitution to private homeowners who were victims of the companies’ fraudulent activities, as well as to the FHA.

“Fighting mortgage fraud is a top priority for this Administration, especially when public dollars are at stake,” said Assistant Attorney General Tony West, who heads the Civil Division. “We will aggressively pursue fraud claims against federal mortgage insurance programs, which are so vitally important to this economy.” Assistant Attorney General West commended both the United States Attorneys’ Office and HUD for their work on this lawsuit and stressed that this is an example of the success that can be achieved when there is collaboration among agencies.

“This action shows that the Administration is serious about making the housing market safe from mortgage fraud and will crackdown on those who violate the trust of American homebuyers,” said HUD Secretary Shaun Donovan. “At this time of uncertainty in the mortgage market, it is especially important that lenders, including builder-affiliated lenders, are held to the highest standards of conduct.”

Ohio AG files lawsuits against three foreclosure rescue companies

In the following press release Ohio Attorney General Richard Cordray [announced he has filed] three lawsuits in a continuing effort to rid the state of foreclosure rescue scams operations. The lawsuits, filed against 21st Century Legal Services (Franklin County), Foreclosure Home Assistance, LLC (Cuyahoga County), and Michael Brotherton, who does business as Financial Emergency, Inc. (Greene County) seek to shut down the companies’ ongoing operations in Ohio.

“Ohio has zero tolerance for these predators,” Attorney General Cordray said. “They prey on Ohioans who are vulnerable and are seeking answers during desperate times. We issued warnings last month ordering them to stop their illegal practices, but they continued anyway. Now, we will work through the courts to stop them permanently.”

According to Cordray’s lawsuit, Cleveland-based Foreclosure Home Assistance, LLC (which also does business as Global Home Rescuers, Homesavers USA, AW Gordon and Associates and Gordon and Associates.) charged consumers $1,500 for loan modifications, forbearance plans and other foreclosure prevention services. In some cases, the company offered foreclosure protection to tenants, claiming it could transfer the property deed from the landlord to the tenant. Despite its promises, the company failed to deliver.

Michael Brotherton, operating as Financial Emergency, Inc., offered similar foreclosure prevention services in Greene County. According to Cordray’s lawsuit, Brotherton advertised his services on the Internet and through the mail. Brotherton charged consumers up to $1,269, saying he could work with lenders and creditors to negotiate debt settlements or workout agreements with mortgage holders. Brotherton failed to deliver.

Also failing to deliver was 21st Century Legal Services, which promised to help homeowners restructure their home loans, a promised service for which they charged $1,500 to $2,600. According to the lawsuit, the company instructed consumers to stop making payments on their home loans and to stop contacting their lenders. Consumers were instructed to make out several post-dated checks, each approximately equal to their monthly mortgage payment, and believed 21st Century would take care of the rest.

Attorney General Cordray’s lawsuits charge each company with violations of Ohio’s Consumer Sales Practices Act and Debt Adjusters Act. Cordray asks the court to hold the companies responsible for reimbursing consumers and to assess a $25,000 civil penalty for each violation.

“In all three of these cases, we believe more victims are out there,” said Cordray. “If you or someone you know has fallen victim to these operations I strongly urge you to contact my office.”

Today’s lawsuits against 21st Century Legal Services and Foreclosure Home Assistance, LLC are the result of a first wave of 13 cease and desist notices issued by Cordray in May. This month, Cordray issued 10 more cease and desist notices and subpoenas to foreclosure rescue operations targeting Ohioans. The cease and desists demand that the companies halt all predatory practices and the accompanying subpoenas require information to substantiate current practices.

For more information or to file a consumer complaint, contact Attorney General Cordray’s Office at www.SpeakOutOhio.gov or (800) 282-0515.

New Jersey AG announces three seperate mortgage fraud indictments

In the following press release New Jersey Attorney General Anne Milgram announced today the indictment of six people charged in three separate, unrelated mortgage fraud cases, including two women charged with spearheading a conspiracy to use stolen identities to obtain more than $1 million in unauthorized mortgages, lines of credit and credit cards.

“The conduct charged in these indictments is unconscionable. It is the kind of greed-driven fraud that is harmful not only to those who were directly victimized but, ultimately, to consumers and legitimate businesses throughout the industry. We are committed to identifying, investigating and prosecuting this type of crime,” said Milgram.
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Additional Materials

• Press Release
• Reid et al indictment (Case 1)
• Coscolluela indictment (Case 2)
• Givens indictment (Case 3)

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Case One

Charged in a 17-count State grand jury indictment with conspiracy, eight counts of theft by deception, seven counts of identity theft and one count of money laundering are Yi Feng Reid, 48, of Closter, Bergen county, and Yu Jane Chen, 42, whose last known address was Philadelphia.

Charged in the same indictment with one count each of conspiracy, theft by deception and identity theft are George Liu, 33, and Ji Gang Chen, 53. Both men once lived in New York, and now reside in China.

According to Division of Criminal Justice Director Deborah Gramiccioni, defendants Reid and Yu Jane Chen both were involved in the mortgage and small business loan industry in the Bergen County area, and unlawfully used the identities of other people to obtain mortgages, other types of loans and unauthorized credit card accounts from 2004 through mid-2007.

Gramiccioni said some victims of the alleged identity theft gave Reid and Yu Jane Chen their personal and financial information in the process of seeking, and ultimately obtaining, a loan. In other cases, victims provided their personal information while beginning the loan process, then changed their minds and elected not to seek a loan.

Those who provided Reid and Yu Jane Chen with identifying information later learned their names had been used to secure unauthorized mortgages, loans and credit cards.

Reid and Yu Jane Chen are accused of being the principal co-conspirators. With their help, co-defendant George Liu allegedly obtained two mortgages on a family member’s house totaling $314,000 by using that relative’s identity, along with false tax returns and phony employment information. Co-defendant Ji Gang Chen, also assisted by Reid and Yu Jane Chen, allegedly obtained four mortgages on a family member’s house totaling $446,000 by using the family member’s identity, as well as false employment and wage information.

In all, the four defendants are charged with obtaining seven mortgages totaling $850,000 by using stolen identities and false information. In addition, 13 bank-approved loans and credit accounts worth a total of more than $300,000 were opened using stolen identities. Numerous banks in Pennsylvania, New Jersey and New York were defrauded.

Among other things, Reid and Yu Jane Chen allegedly used checks, credit card transactions and cash proceeds from their unlawfully-obtained accounts to make ATM withdrawals, and to buy goods at supermarkets, gas stations, toy stores, jewelry stores and other retail outlets. Other credit and cash proceeds were allegedly used to pay for ponies to entertain Reid’s child, to pay Reid’s nanny, to pay for the EZ Pass account of a Reid family member and to pay the expenses of Reid-operated businesses.

Yu Jane Chen allegedly used credit and cash proceeds to make a variety of jewelry purchases, and to pay the expenses of several businesses in which she was involved. Thousands of dollars also went to pay a spiritual adviser shared by both Reid and Yu Jane Chen. In some cases, proceeds from the unauthorized loans were used to make payments on other fraudulently-obtained credit accounts.

Most offenses charged in the Reid/Yu Jane Chen indictment are second-degree.

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Case Two

In an unrelated indictment, commercial loan broker Ramon Coscolluela, 30, of Union, was charged by a State grand jury with one count each of theft by deception (second degree) and attempted theft by deception (second degree).

Coscolluela, owner of Templar Group LLC of Newark, allegedly falsified five loan applications submitted to Commerce Bank in 2007 and 2008 on behalf clients who paid him fees ranging from $1,000 to $6,000.

Four of the loan applications were rejected, but a fifth loan request for $100,000 was granted. When the borrower defaulted on the loan, it prompted a bank review of the other four applications Coscolluela had submitted.

Each of the applications was allegedly found to contain inflated or false information not supplied by Coscolluela’s clients. Applications submitted by Coscolluela on behalf of his clients typically contained false information about the liquid assets they possessed, the value of their homes and/or the net worth of their businesses. Coscolluela’s clients were never refunded the fees he charged them.

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Case Three

In a third mortgage-fraud indictment, Terrance Givens, 32, of East Orange, was charged with one count of theft by deception (second degree.)

According to Criminal Justice Director Grammicioni, Givens lied about his employment history on a mortgage application in 2005. Specifically, he falsely listed his employer as Wall Designs, Inc. of Newark, a business founded by a relative that, for all intents and purposes, never existed.

In addition to misrepresenting his employment history to the New Century Mortgage Company, Givens allegedly submitted false W-2 forms for the years 2002, 2003 and 2004 showing annual wages of between $67,000 and $72,000.

On the basis of the false information he provided, Givens was approved for, and received, a $200,000 mortgage loan which subsequently went into foreclosure.

An indictment is merely an accusation. All defendants are presumed innocent until proven guilty. Second-degree crimes carry a penalty of between five-and-10 years in prison and fines ranging from $150,000-to-$500,000 per offense.

Another Oregon loan officer indicted in fraud allegations

An indictment filed in the Oregon District Court alleges that on or about February 16, 2007 Michael Duc Han devised a scheme to defraud First Franklin Financial Corporation. Han is said to have acted as a residential mortgage loan broker and he prepared a uniform residential loan application for a borrower named Joshua T. Kollar.
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Additional Materials

• Indictment
• Oregon DCBS Records

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Han is accused of knowing that he had supplied false supporting documentation, including bank statements, in support of false financial qualifications for the borrower. As a result the borrower obtained a mortgage loan in the approximate amount of $259,950. 

Oregon DCBS records show that Han’s originator status is shown as Inactive and at the time of these alleged offense he was employed by TTM Financial of Portland, OR.