Posts Tagged ‘Mortgage Fraud’

Anthony “Gabe” Painton, Jr., 29, Kansas City, Missouri, has pleaded guilty to one count of conspiracy to commit bank fraud.

In his plea, Painton admitted that beginning in 2006 he conspired with Eric M. Rabicoff and eight other defendants to defraud federally insured financial lenders. The scheme called for Painton and others to become straw buyers who bought houses that were for sale by owners. The straw buyers obtained mortgage loans by submitting false loan applications to lenders. Falsified information including employment history, income and rent history was submitted in order for the straw buyers to obtain loans that they would not otherwise qualify to receive. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing. At the direction of Rabicoff, Painton set up a shell company called AJs Investment Group to receive proceeds from home sales to straw buyers. The conspirators fraudulently obtained a total of more than $3 million in mortgage loans.

As previously reported on Mortgage Fraud Blog, Painton is one of ten defendants originally indicted earlier this year.  The other defendants in the case, all of whom are awaiting trial, include Eric M. Rabicoff, Jason L. Rabicoff, Lucas R. Collier, Anthony E. Carollo, Deborah Saulmon, Bora Ly, Kong Bun Ly, Rebecca Gelwix and Richard Ngek.

Lanny D. Welch, U.S. Attorney for the state of Kansas, announced the plea. Welch commended the Internal Revenue Service, Assistant U.S. Attorney Christine Kenney and Assistant U.S. Attorney Richard Hathaway for their work on the case.

(Update: D.A. declines to comment.)

Investigators with the Orange County district attorney early Thursday morning searched three Ladera Ranch homes believed tied to a foreclosure rescue scam.

Agents served search warrants on two homes on Roshelle Lane and one on Merrill Hill. The homes are connected to Terence Green Sr. and Stefano Marrero of Home Relief Services and Christopher Diener of the Diener Law Firm. (Photo by Ken Steinhardt. Home on Roshelle.)

The three men were not immediately available for comment.

Attorney General Jerry Brown last week said he has filed suit against the men, alleging that they charged homeowners $4,000 in upfront fees and then failed to get them cheaper payments on their home loans.

Brown also charged that the companies sometimes promised to arrange a short sale — when a lender agrees to accept less than the debt owed on a property — but instead attempted to use customers’ personal information for the companies’ own benefit.

The District Attorney’s Office declined to comment. After getting an anonymous tip, a Register photographer took photos of agents entering the homes.

Alan Gordon, assistant chief trial counsel of the California State Bar, confirmed that the Orange County district attorney and some other agencies served search warrants today. He said the bar has been “working closely with several agencies” investigating potential loan mod scams.

Earlier in the week, District Attorney Tony Rackauckas told a group of community leaders that his office is expanding investigations into real estate fraud.

Elizabeth Henderson, an assistant district attorney who spoke at the same event in Garden Grove, said 30% of the cases handled by the office’s major fraud unit are tied to real estate, up from an average 10% in past years. Here’s more of what I wrote about her talk and subsequent interview:

The district attorney has two prosecutors, two investigators and a paralegal focused just on real estate fraud, she said.

The real estate squad is paid for, at least partially, with money from a $3 fee on the filing of certain real estate documents that was approved by the Board of Supervisors earlier this year.

Henderson was more blunt in her speech and in a later interview.

“We want to send people to jail,” she said.

The issue is not just that someone might lose $2,000 or more, but that his or her house proceeds to foreclosure while the homeowner waits for help that never comes, Henderson said.

Defrauding just one person could translate to a maximum penalty of three years in prison for grand theft, she said. Subsequent victims could add eight months to a sentence per person. Loan modification scammers could be committing other crimes, such as fraud, practicing without a license, and breaking rules tied to call centers.

More from this blog…

• These O.C. homes are about to be repo’d
• Democrats renew push for Consumer Finance Agency
• District Attorney steps up real-estate fraud investigations
• O.C. foreclosure starts climb as inland may be hitting bottom
• Foreclosure flip
• Fed plans to raise rates … in distant future
• When will these foreclosures hit the market?
• House committee votes to extend home-loan limits
• Bank failures in perspective
• Buyers dominate foreclosure auction

Post from: Mortgage Insider

Cheryl Ann Romero, 51, Santa Fe Springs, California, pleaded guilty in federal court for her role in a $12.6 million mortgage fraud conspiracy that involved 25 upscale residential properties in Lee’s Summit, Missouri and Raymore, Missouri.

As previously reported on Mortgage Fraud Blog, Romero is one of 17 defendants initially charged in an October 2008 federal indictment.

Romero is among 10 defendants who have pleaded guilty to the scheme to buy and sell new homes – all of which were built by Jerry R. Emerick, 39, Raymore, Missouri - in the Raintree and Belmont Farms subdivisions in Lee’s Summit and the Eagle Glen subdivision in Raymore. Buyers purchased the homes at inflated prices, obtaining mortgage loans for more than the actual sale price by providing false information to mortgage lenders, then kept the extra proceeds. Buyers created shell companies for the purpose of receiving those kickbacks from Emerick, with kickbacks of up to $125,000 on each house.

Emerick owned and operated Ty Construction and Residential Contracting, LLC, which was engaged in the business of residential construction, primarily in Lee’s Summit and Raymore. He pleaded guilty on April 9, 2009, to conspiracy to commit mortgage fraud and wire fraud and to transfer funds obtained by fraud across state lines.

In total during the course of the conspiracy from June 2005 to May 2007, mortgage lenders approved loans for 25 homes totaling more than $12.6 million. From that total, buyers received approximately $2.3 million without the lenders’ knowledge.

Romero purchased two Lee’s Summit properties from Emerick. In obtaining mortgage loans to make the purchases, Romero made material misrepresentations in the loan applications upon which the lenders relied and received money back unbeknownst to the lenders.

Romero received a $519,900 loan to purchase the property at 4101 S.E. Canter Drive, for which she received a $90,000 kickback. Romero also received a $549,900 loan to purchase the property at 4513 Admiral Byrd Drive, for which she again received a $90,000 kickback. Both payments were made from the loan proceeds by the title company to Miracle Management, a company Romero set up for that purpose.

Under federal statutes, Romero is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Matt J. Whitworth, Acting United States Attorney for the Western District of Missouri announced the guilty plea. This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.

Cheryl Joan Kassebaum, 43, Ozark, Missouri, a former mortgage broker, pleaded guilty to her role in a $500,000 mortgage fraud scheme before U.S. Magistrate Judge James C. England.  As previously reported Mortgage Fraud Blog, Kassebaum was indicted in November 2008.

Kassebaum, a former mortgage broker and co-owner of Metro Consulting Group, admitted that she participated in a scheme to defraud home mortgage lenders from March to July 2006. Kassebaum participated in a conspiracy to obtain mortgage loans for the purchase of a home based on false loan applications, and to return a significant portion of the loan proceeds to the purchasers of the homes without the lender’s knowledge and o! utside the closing of the home purchase.

This scheme involved seven houses with home mortgage loans ranging from approximately $200,000 to more than $400,000. The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to nearly $100,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed. The readily provable economic loss attributable to Kassebaum’s criminal conduct is $497,200.

Kassebaum’s role in the conspiracy was to prepare and submit fraudulent loan applications to lenders. Kassebaum knew those loan applications included overstatements of income and understatements or omissions of liabilities, and falsely represented that the purchaser/borrower intended to reside in the home to be purchased. Kassebaum also facilitated the return of a significant portion of the loan proceeds to herself and other purchasers/borrowers without the lender’s knowledge and outside the closing of the home purchase by routing the returned proceeds through Master Marketing Consultants and then through Metro Consulting Group.

Kassebaum also pleaded guilty to one count of wire fraud, related to the transfer of loan proceeds from the scheme, and one count of money laundering, related to monetary transactions involving criminally-derived property.

Matt J. Whitworth, Acting United States Attorney for the Western District of Missouri, announced the guilty plea.

Under federal statutes, Kassebaum is subject to a sentence of up to 45 years in federal prison without parole, plus a fine up to $1.5 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Douglas C. Bunch. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.