86 South Florida Residents Charged with Mortgage Fraud

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A special investigation has netted 86 indictments in South Florida related to mortgage fraud. From March 1, 2010 to the present date, Operation Stolen Dreams resulted in the indictments of 86 individuals in South Florida for their participation in a series of mortgage fraud schemes that resulted in more than $76 million in fraudulent loans.

This Operation and today’s announcement was coordinated by the Department of Justice’s Financial Fraud Enforcement Task Force (FFETF). The interagency FFETF was created in November 2009 to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Operation Stolen Dreams focused on increasing cooperation with state and local partners. To this end, the Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. For more information on the task force, visit StopFraud.gov.

“Mortgage fraud ruins lives, destroys families, and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”

U.S. Attorney Wifredo Ferrer stated, “For millions of Americans, the dream of home ownership has become a nightmare. The unscrupulous actions of individuals and companies who abuse the financial system and the trust of others for their own financial gain are immoral and illegal. Mortgage fraud, like all fraud, is a crime of opportunity. Open the door to such fraud and someone will walk right through. With the combined efforts of our interagency Federal State Mortgage Fraud Strike Force and the FFETF, we are here to help close that door.”

“Mortgage fraud is a virus that continues to plague the mortgage industry and has gone on to infect the rest of our economy,” said Special Agent in Charge John V. Gillies of the FBI Miami Division. “This is a wake-up call to those in the mortgage industry who think they can get away with creating phony documents to line their pockets with stolen loan proceeds. The FBI will continue to work with its federal, state and local law enforcement and regulatory partners to bring the perpetrators of these crimes to justice.”

“The U.S. Secret Service is proud to have participated in Operation Stolen Dreams, with our dedicated agents pursuing criminal investigations into mortgage fraud violations, which have culminated in the successful federal indictments of individuals in our district,” said Special Agent in Charge Michael Fithen of the Miami Field Office. “Cooperation and partnerships such as these consistently allow us to focus our resources to uncover and prevent criminal activity more efficiently than ever.”

Daniel W. Auer, Special Agent in Charge of the IRS’s Criminal Investigation Division said, “IRS Criminal Investigation will continue to lend its financial investigative expertise to aggressively investigate criminal activities that adversely affect our financial system. Those who line their pockets with profits from these schemes should know that they will not go undetected and will be held accountable.”

“Mortgage fraud has been a stifling disruptive hurdle for the citizens and economy of the South Florida,” said U. S. Postal Inspector in Charge Henry Gutierrez. “This national mortgage fraud initiative demonstrates the determination of law enforcement to protect the American dream of legitimate home ownership.”

“The Federal Deposit Insurance Corporation Office of Inspector General is committed to its partnerships with others in the law enforcement community as we address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal activities that undermine that integrity will be held accountable,” said Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation.

“The last number of years have seen enormous and damaging developments in the mortgage and housing markets with an urgent reliance on the government to bolster unstable marketplaces and devastated communities,” said Kenneth M. Donohue, Inspector General of the Department of Housing and Urban Development. “The HUD OIG, in partnership with other federal agencies, is deeply committed to ensuring that scarce resources are not diverted to those who seek to enrich themselves at the expense of those who so desperately need assistance today.”

“Mortgage fraud is a serious crime that has heavily affected many communities and families in South Florida,” said Amos Rojas Jr., Special Agent in Charge of the Florida Department of Law Enforcement’s Miami Regional Operations Center. “We are vigorously combating this issue and will continue to investigate and arrest those criminals who engage in this crime. We will use every law at our disposal to aggressively go after these individuals who are plaguing our region. There is no place to hide.”

“It took many agencies with one common goal—to protect Florida consumer from unscrupulous and fraudulent activities,” affirmed Commissioner Tom Cardwell of the Florida Office of Financial Regulation. “Consumers are safer today because of the team effort to bring these individuals to justice.”

Miami-Dade Police Director James Loftus added, “The Miami-Dade Police Department’s Mortgage Fraud Task Force has worked closely with the United States Attorney’s Office and all the federal agencies on the Mortgage Fraud Strike Force. We have all been united by the common goal of arresting perpetrators of mortgage fraud and the successful prosecution of these criminals. Mortgage fraud has had a severe impact on our economy, both locally and nationally, and we look forward to continuing our efforts to bring mortgage fraud offenders to justice.”

In South Florida, from March 1, 2010 to date, the combined interagency effort in Operation Stolen Dreams has resulted in a record number of prosecutions, among them:

U.S. v. Yolette Antoine & Constance Powell

Two individuals were charged in a mortgage fraud scheme that resulted in the approval and disbursement of approximately $4.4 million in fraudulent mortgage loans, and causing losses of approximately $1.5 million to various lenders. Yolette Antoine allegedly advertised herself in the Haitian-American community as someone who could provide assistance with immigration and housing matters. In this way, Antoine obtained the personal identifying information of clients, including their names, Social Security numbers and copies of their driver’s licenses. The defendants then stole the identities of these clients and used the stolen personal information to fraudulently purchase various properties. After the closings for the properties, the defendants would prepare and execute false quit-claim deeds transferring title in the properties to The Antoine Investment Group, which defendant Antoine controlled.

U.S. v. Ramos, et al.

Eleven defendants, including a mortgage broker, a real estate broker, a loan processor, and eight straw buyers, were charged in a scheme that defrauded nine financial institutions of approximately $11.25 million in fraudulent loans on 15 residential properties. The defendants perpetuated their scheme by flipping properties at inflated prices to complicit straw purchasers. The properties ultimately went into foreclosure.

U.S. v. Medina, et al.

Thirteen defendants, including a loan officer, a title agent, recruiter, and staw buyers, were charged in a mortgage fraud scheme that resulted in the approval and disbursement of approximately $16.9 million in fraudulent mortgage loans, causing losses of $9.7 million to the lender. The properties charged include multiple units at a luxury condominium building on Brickell Bay Drive in Miami and single family homes in Coral Gables, Florida.

U.S. v. Anson Joachin, et al.

Four defendants, including a mortgage broker, a loan processor, and a straw buyer, engaged in a $2.5 million mortgage fraud scheme to purchase properties in Broward, Palm Beach and Lee Counties. To execute the scheme, the defendants submitted false loan applications and supporting documents to various mortgage lenders across the United States. Based on these false documents, the mortgage lenders issued approximately $2,500,000 in loans.

U.S. v. Peter N. Price

Peter N. Price, a title attorney, pled guilty to one count of making a false statement on a HUD-1 form. Price, acting as a title closing attorney, embezzled more than $1,000,000 in lenders’ funds from his escrow account on a real estate closing in 2007. Sentencing is scheduled for August 27, 2010.

U.S. v. Samuda

Three defendants, including a title attorney, a title company employee, and a mortgage broker, are charged in a mortgage fraud and closing scheme regarding the sale of a home in Ft. Lauderdale for $1,250,000. Two defendants have pled guilty to making false statements on the HUD 1 forms at closing and defrauding the lender. The title attorney, Michael Samuda, is scheduled for trial on July 2010.

U.S. v. Yvette Gonzalez Valdes, et al.

A family of four, as well as the title company owner, were charged in this $600,000 mortgage fraud. The defendants prepared and submitted fraudulent mortgage loan applications to the lenders, which included materially false information regarding the buyer’s employment, income, assets, intent to live in the property, and other information necessary to induce the lenders to approve the loans. After the defendants received the loan proceeds, they defaulted on their payments, causing the properties to go into foreclosure.

U.S. v. Marcos Salazar, et al.

The defendants identified a property to be used for the fraud, and caused the sellers of the property to execute a sales contract that inflated the price of the property. After the lender approved the loans on the inflated price, the co-conspirators kept the difference between the actual and the inflated sales prices. The defendants then defaulted on the loans.

U.S. v. Jeffrey Phillips, et al.

Fourteen defendants are charged in a mortgage fraud scheme that resulted in the approval and disbursement of approximately $7.5 million in fraudulent mortgage loans, and several million in losses to the lenders. To execute the scheme, the developer artificially inflated the price of vacant land in North Florida, and resold it to complicit straw buyers. The defendants prepared fraudulent mortgage loan applications and other related documents on behalf of the straw buyers.

U.S. v. Basilio, et. al.

Two defendants created a company called Principal Investment Management. They then recruited straw buyers to pose as purchasers of properties in Miami-Dade and Broward Counties. The defendants were involved in the fraudulent financing of mortgages for at least six residential properties in Miami-Dade and Broward Counties. The defendants took the money from the mortgage proceeds, including second loans on the homes, and used those proceeds to make the mortgage payments or divert the proceeds into their own accounts.

The defendants were involved in the fraudulent financing of mortgages for at least eight residential properties in Miami-Dade County. The defendants would identify properties that could be used to defraud lenders and then recruit individuals to pose as purchasers of the properties. The defendants also signed-off on mortgage loans without performing the necessary verifications.

U.S. v. Jason Vitulano, et al.

Jason Vitulano was a branch manager at TopDot Mortgage, in Boca Raton, where Vitulano and others, including co-branch manager Peter Hartofilis, devised a scheme to submit fraudulent loan applications to numerous lenders. The false loan applications grossly inflated the loan applicants’ earnings and assets on deposit in a local bank. In reliance on these and other false statements in the loan applications, the lenders approved and funded more than $5 million in mortgage loans to purchase residences in Palm Beach and Broward Counties.

U.S. v. Gallego

Defendant Gallego was charged in a $2 million mortgage fraud scheme to purchase a property in the Versailles subdivision of Wellington, Florida.

U.S. v. Lozada

Four defendants were charged in a mortgage fraud scheme that defrauded lenders of more than $ 6 million in loans in connection with the purchase of five properties in Miami-Dade County. The straw buyers in this case were paid $5,000 for the use of their name and credit. Defendant Maria Lozada, a former loan processor at a title attorney’s office, pled guilty to one count of conspiracy to commit bank fraud, based on a fraud loss of more than $2.5 million.

U.S. v. Gonzalez

Eleven defendants, including a mortgage broker, a real estate broker, a loan processor, and eight straw buyers, were charged in a scheme that defrauded nine financial institutions of approximately $11.25 million in fraudulent loans on 15 residential properties. The defendants perpetuated their scheme by flipping properties at inflated prices to complicit straw purchasers. The properties ultimately went into foreclosure.

U.S. v. Quiroz

The defendant is alleged to have created fraudulent loan applications, verifications of employment, IRS Forms W-2, payroll stubs, and bank statements in order to obtain mortgages for the refinance and purchase of real property in Port St. Lucie. In total, the defendant received more than $400,000 in fraudulent loans.

U.S. v. Cazas, et al.

Four defendants, including a developer and three loan officers, were charged in an $8 million dollar condominium conversion scheme involving a 53-unit condominium building. The developer converted an apartment building into condominiums and, with the loan officers’ assistance, sold the condominium units to unqualified buyers. To qualify the prospective buyers for loans, the loan officers paid down outstanding debt of the unqualified buyers and purchased false employment documents. The condominium units went into foreclosure and the building was ultimately condemned because the unqualified buyers could pay neither their mortgage payments nor their monthly condominium assessments.

South Florida has consistently led the nation in the number of mortgage fraud prosecutions. In September 2007, the Southern District of Florida announced a Mortgage Fraud Initiative. This was followed in June 2008 with the creation of a Mortgage Fraud Strike Force, comprised of experienced federal, state and local prosecutors, agents, and officers, dedicated exclusively to investigating and prosecuting mortgage fraud cases. Through collaboration, sharing information and focusing on a common goal, the Strike Force has effectively investigated illicit financial activities, made criminals accountable, and increased confidence in the integrity of our banking system.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

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