Christopher Wayne White Guilty of Mortgage Fraud

February 6, 2015

A Broward real estate broker was sentenced to 41 months in prison, three years’ supervised release and ordered to pay $4,029,892, in restitution to victims in three separate fraud cases.

Mortgage FraudChristopher Wayne White, 44, of Fort Lauderdale, Florida, pled guilty on November 21, 2014 in Case No. 14-60283-CR-Dimitrouleas to one count of wire fraud. According to documents filed with the court, White made numerous false statements to the mortgage lender in connection with the purchase of a luxury home on Sea Island Drive in Fort Lauderdale. According to court records, White inflated his bank account balances, income, deposit and assets to fraudulently induce the mortgage lender to issue a mortgage loan in excess of $4.9 million dollars. The property was subsequently foreclosed by the lender resulting in substantial losses.

In Case No. 14-60282-CR-Dimitrouleas, White pled guilty on November 21, 2014 to six counts of wire fraud. According to court documents, White was a licensed real estate broker and owner and operator of the Christopher White Group in Fort Lauderdale. White obtained multiple real estate deposits in excess of $750,000 via wire transfers involving properties in Broward County from individuals and refused to return the escrow deposits. Subsequently, the Secretary of Florida’s Department of Business and Professional Regulation ordered an emergency suspension of White’s real estate broker’s license.

In Case No. 14-60216-CR-Dimitrouleas, White pled guilty on November 21, 2014 to three counts of making material false statements to U.S. Citizenship and Immigration Services. According to documents filed with the court, these statements were included on White’s April 16, 2014, application for naturalization submitted to the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services. White made the following material false statements in his naturalization application: (1) that he had never claimed to be a U.S. Citizen; (2) that he had never committed, assisted in committing or attempted to commit a crime or offense for which he was never arrested; and (3) that he had never failed to support his dependents.

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Jaime Sanchez sentenced to Prison for Mortgage Fraud – Choices and Consequences

January 31, 2015

An Individual was sentenced for his role in illegal mortgage fraud kick-back scheme, which resulted in his and his co-conspirators fraudulently obtaining $3,000,000 in 12 fraudulent mortgage loans at Marina Oaks Condominiums.

mortgagefraudJaime Sanchez, 43, was sentenced to 168 months in prison, followed by five years of supervised release. On October 29, 2014, Sanchez pled guilty to conspiracy to commit mail and wire fraud affecting a financial institution. Sanchez had been previously charged in connection with fraudulently obtaining mortgages for the purchase of 12 condominium units at Marina Oaks Condominiums in Fort Lauderdale, Florida.

According to the indictment from January 2007 through September 2008, in the Southern District of Florida and elsewhere, Sanchez and others conspired to recruit individuals who would be willing to purchase condominium units at Marina Oaks Condominiums. These buyers were promised a “buyer’s incentive” which in actuality was an indirect payment or “kick-back” to the buyers not disclosed to the lenders or reflected on any of the closing documents. Sanchez and others would then prepare materially false and fraudulent mortgage applications for the buyers on the Uniform Loan Application Form 1003 which contained false and fraudulent information as to material facts about the borrower’s credit worthiness in order to obtain mortgage money from lenders to fund the purchase of the Marina Oaks Condominiums. The conspirators would create false and fraudulent documents to support the mortgage applications. Once the loans closed, the conspirators would fraudulently and unlawfully divert portions of the mortgage proceeds for their own personal use and benefit.


Mortgage Fraud – Emeka Udeze Sentenced to Prison

January 21, 2015

Emeka Udeze, age 39, of Bowie, Maryland, was sentenced to 37 months in prison followed by five years of supervised release for conspiring to commit wire fraud in connection with two separate mortgage fraud schemes. Judge Messitte also entered an order that Udeze pay restitution and forfeit $2,098,378, the amount of actual losses suffered by the mortgage lenders as the result of the minimum of 20 transactions Udeke brokered in furtherance of the fraud schemes.

Mortgage Fraud 1According to his plea and court documents, Udeze was a licensed mortgage broker who worked at various companies, including Newgate Mortgage, owned by co-defendant Shola Risikat Balogun, and EWA Mortgage. Udeze also registered a Maryland company called E&T Consulting, Inc., which he claimed was established to provide general services.

Udeze admitted that in both schemes, he submitted fraudulent mortgage loan applications for buyers, inflating the buyer’s income and creating bogus employment information in an effort to qualify these individuals for loans that they otherwise were unqualified to secure. In some cases, no mortgage payments were made and the property went swiftly into default. In other cases, the borrowers attempted to make mortgage payments for a period of time until they could no longer make payments.

In the first scheme, from at least 2006 through at least December 2008, Udeze, Balogun, Daniel Ofei and others contacted individuals who wished to purchase homes. The buyers, who typically had moderate to low incomes, provided the conspirators with accurate income and employment information. Udeze and others then submitted fraudulent loan applications on behalf of the buyers, inflated the buyer=s income and created bogus employment information in an effort to secure the loan. Udeze, Balogun and others collected origination fees, commissions, yield spread premiums and broker=s fees from each loan that closed. In all, Newgate Mortgage was responsible for originating nearly 100 fraudulent transactions, causing millions of dollars of losses to lending institutions.

In a separate scheme, from May 2009 to January 2010, Udeze conspired with Bonnie Kreamer, Nieshia Williams and Rhonda Scott to arrange for individuals to buy and sell real estate so they could improperly obtain money from the transactions. The co-conspirators used many fraudulent techniques, including: short sales in which the property would be sold for a higher price than the seller was aware of; sales of properties not owned by the seller; multiple sales of the same property at the same time; the seller and/or buyer were shown different settlement statements and the conspirators used the difference in sales price to enrich themselves; and money that should have been paid to lien holders was instead disbursed to the co-conspirators, including shell companies created by Udeze and others in order to disguise that the money was really for their benefit. This fraud scheme involved at least 25 victims, including lenders, sellers and buyers of real estate, title insurance companies and lien holders, who incurred losses of over $3 million.

Bonnie Kathleen Kreamer, a/k/a Bonnie Meehan, age 49, of Riva, Maryland; Shola Risikat Balogun, age 48, of Upper Marlboro; Rhonda Scott, age 53, of Oxon Hill, Maryland; Daniel Ofei, age 40, of Bowie, Maryland; Nieshia Williams, age 35, of Fort Washington, Maryland; Gregory Green, age 50, of Waldorf, Maryland; and Demetrius Peete, age 47, of Manassas, Virginia, each previously pleaded guilty to their roles in the fraud schemes. Kreamer, who was responsible for the daily operations at Sanford Title, was sentenced on to 51 months in prison, and ordered to pay restitution of $2,499,048 to the victims and forfeit $4.8 million. Scott was sentenced to 30 months in prison and ordered to forfeit $2.7 million and pay restitution of $703,000. Balogun, who organized the mortgage fraud scheme involving Newgate Mortgage, was sentenced to 37 months in prison and ordered to pay restitution and forfeit $1,352,378. Ofei, was sentenced to 37 months in prison and ordered to pay restitution of $5,950,000. Williams was sentenced to 27 months in prison and ordered to forfeit $3.1 million and pay restitution of $1,445,593. Peete was sentenced to a year and a day in prison and ordered to pay restitution of $394,908 and forfeit $1.5 million. Green was sentenced to three months in prison and ordered to pay restitution of $404,596.


Mortgage Fraud – FilipMilios sentence to Prison for his role in this $5 million+ Mortgage Scam

January 21, 2015

FILIPPOS MILIOS, also known as Filip Milios, 56, of Newington, was sentenced to 97 months of imprisonment, followed by five years of supervised release, for orchestrating a mortgage fraud scheme that involved dozens of Connecticut properties and resulted in nearly $5.7 million in losses to lenders.

Mortgage FraudAccording to court documents and statements made in court, from approximately June 2005 to July 2010, MILIOS and others conspired to defraud banks and mortgage lenders in obtaining dozens of mortgages for the sale of properties owned by MILIOS and others.  The conspiracy involved the use of straw borrowers, false mortgage applications, false HUD-1 forms and fraudulent down payments in connection with the purchase of more than 50 houses primarily located in Hartford, New Haven and Middlesex counties.

As part of the scheme, MILIOS purchased properties, either in his own name, in a limited liability corporation in which he had an interest, or in the name of a co-conspirator.  MILIOS and others then recruited borrowers to purchase these properties.  Unbeknownst to the lenders who extended mortgages to the borrowers, MILIOS and his co-conspirators submitted fraudulent documents in connection with the loan applications, including false HUD-1 forms, employment verification letters and rental verification letters.

MILIOS also made the down payments on behalf of the borrowers who were recruited to purchase the properties.  Attorney Gabriel Serrano, who served as a closing attorney for most of the fraudulent transactions, often released the seller’s proceeds checks from closing to MILIOS before receiving the down payment, and MILIOS used the seller’s proceeds checks to purchase the down payment check for the same transaction.  MILIOS also failed to disclose to mortgage lenders that he paid money to borrowers, mortgage brokers, and recruiters.

MILIOS also engaged in a money laundering conspiracy with Serrano.  The conspiracy involved Serrano’s disbursing the fraudulently-obtained loan proceeds to the private lenders who had loaned MILIOS money when he originally purchased the properties.

Lenders lost $5,692,813 as a result of this scheme.

MILIOS was originally charged by criminal complaint in January 2013 and has been detained since March 20, 2014, when his bond was revoked after he made an attempt to flee the country on a shipping container vessel while awaiting trial.  On September 15, 2014, he pleaded guilty to one count of conspiracy to commit mail and bank fraud, and one count of conspiracy to commit money laundering.

MILIOS, who is a citizen of Greece, faces immigration proceedings when he is released from prison.

On August 6, 2013, Serrano also pleaded guilty to one count of conspiracy to commit mail and bank fraud, and one count of conspiracy to commit money laundering.  Seven other co-conspirators involved in this scheme have also pleaded guilty.  All await sentencing.


Mortgage Fraud scheme by former SunTrust Mortgage leads to guilty plea by Javier Siveroni

August 10, 2011

ALEXANDRIA, Va. – Javier Siveroni, 48, of Springfield, Va., pleaded guilty today to using his position as a loan officer to help carry out a multi-million dollar mortgage fraud scheme involving more than 15 homes in Northern Virginia.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.

Siveroni pleaded guilty to one count of an indictment charging him with conspiracy to commit wire fraud.  Siveroni faces a maximum penalty of 20 years in prison when he is sentenced on Nov. 4, 2011.

According to court documents, Siveroni, a former loan officer at the Falls Church branch of SunTrust Mortgage, prepared and submitted false, fraudulent, and misleading mortgage loan applications for unqualified buyers – individuals who lacked the finances, credit rating, or legal status to obtain a certain loan amount.  The fraudulent mortgage loan applications contained false information regarding applicants’ employment, income, assets, immigration status, and intent to live in the property as a primary residence.  As part of the fraud scheme, Siveroni created, and taught his co-conspirators how to create, fake documents in order to corroborate false information contained in the loan applications.  The total amount of mortgage loans approved through the conspiracy exceeded $6.5 million.  The total loss attributable directly to Siveroni is over $2.5 million.

In related matters, three loan officers have pled guilty for their roles in the alleged conspiracy: Preston Cherouny, 45, of Washington, D.C.; John Leone, 44, of Vienna, Va.; Alejandro Alquinta, 35, of Springfield, Va. Maria Teresa Sanchez, 44, of Burke, Va., and Yolanda Salazar Camacho, 35, of Alexandria, Va., also pled guilty for their roles as loan officer assistants in the conspiracy.

This ongoing investigation was conducted by the FBI’s Washington Field Office.  Assistant United States Attorney Uzo Asonye prosecuted the case on behalf of the United States.


Jose Arnaldo Rosario pleads guilty to Mortgage Fraud – Straw Buyers and Fake Documentation – A Classic scheme!

July 14, 2011

Jose Arnaldo Rosario, of Miami-Dade County, pled guilty today to conspiracy to commit money laundering and wire fraud, all stemming from a mortgage fraud scheme.  At sentencing, Rosario faces a maximum term of imprisonment of five years. Sentencing is scheduled for August 3, 2011 at 1:30 PM in Miami, FL, before U.S. District Judge Jose A. Martinez.

According to the Information, from at least November 2005 to January 1, 2007, Rosario and his co-conspirators purchased two properties located at 1331 Brickell Bay Drive (Unit 3003 and Unit 803), Miami, Florida, by obtaining bank loans using false and fraudulent information, phony documentation, and falsely inflated property valuation levels. Rosario and his co-conspirators provided the lending institutions with the name of a straw buyer rather than the names of the true purchaser(s); provided false and fraudulent information concerning the intent of the straw buyer to live at the property; and provided false and fraudulent information concerning the employment history and financial resources of the straw buyer.

According to court documents, Rosario and his co-conspirators then used these loan funds to purchase the properties using little or no money of their own. A portion of the difference between the amount obtained from the lending institution and the fair market value of the property (or “true price”) would be distributed among the conspirators in the form of undisclosed kickbacks. Rosario set up a shell company named Empire Associates to receive the funds initially and to make subsequent transfers. To avoid detection, Rosario would make a limited number of monthly payments on the loan for approximately one year before he stopped making payments altogether and allowed the properties to go into foreclosure. At today’s plea hearing, Rosario acknowledged that the loss resulting from his actions is approximately $2.51 million.

As a business ethics and fraud prevention speaker, I often discuss with my audiences the types and forms of fraud and the above is a classic scheme.  The amazing thing is that they didn’t do more.  Seems they got in late to the party as the market was turning against them as the scheme unraveled.

If you know Rosarie and wish to comment on the motive know that – YOUR COMMENTS ARE WELCOME!


Former Loan Officer Michael Pahutski sentenced to 19 years in Prison for Mortgage Fraud Scheme

July 9, 2011

As you look over the reported facts of this case, it’s sad to see that so many could conspire to defraud.  Do I blame the perpetrators – Yes!  But, when you look more closely we have to evaluate what was happening at the time and how the environment created the opportunity to join together to create such a widespread fraud.

As a business ethics and fraud prevention speaker, I see, all to often, that when three things come together: (1) Need; (2) Opportunity and (3) Rationalization – it creates the PERFECT STORM for fraud.  To be clear, just because those three things are present does not mean that Fraud will occur, rather it means that the conditions are right for the ethical person to make the unethical choice that can lead to illegal activities and fraud.

Read the US Attorney’s news release below for more details…

DEPARTMENT OF JUSTICE

United States Attorney Anne M. Tompkins
Western District of North Carolina

FOR IMMEDIATE RELEASE
FRIDAY, MAY 6, 2011

CONTACT: Lia Bantavani
704.338.3140
Fax: 704.227.0264

LOAN OFFICER SENTENCED TO 19 YEARS IN PRISON CHARLOTTE, NC—Today, the United States Attorney’s Office for the Western District of North Carolina announced that Michael Pahutski, 48, of Gastonia, was sentenced to 19 years imprisonment to be followed by five years of supervised release. Pahutski was also ordered to perform 200 hours of community service and pay restitution of approximately $3.5 million. The sentence is the latest step in an ongoing investigation of mortgage fraud schemes carried out around the Charlotte area, which led to the charging of eight individuals with mail, wire and bank fraud conspiracy, money laundering conspiracy, and related charges in March 2008. The investigation also resulted in the trial of closing attorney and co-defendant Victoria Sprouse in March 2009. Pahutski pled guilty prior to trial, without the benefit of a plea agreement, to all twenty-one counts in the indictment then pending against him.

Joining the U.S. Attorney’s Office in making today’s announcement are Jeannine Hammett, Special Agent in Charge of IRS-Criminal Investigation Division; Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division; Inspector In Charge of the U.S. Postal Inspection Service, Keith Fixel; and Wayne Goodwin, Commissioner, North Carolina Department of Insurance.

A federal indictment charging Michael Pahutski with mortgage-fraud- related offenses was originally filed in August 2007, followed by a superseding indictment adding charges and five other defendants in March 2008. To date, all six of those defendants have been either convicted at trial or have entered pleas of guilty. The charges represent the results of a local investigation which stemmed from the detection of an original mortgage fraud scheme in September 2002, and focused on a group operating in and around the Charlotte area. The indictment alleged, and the evidence presented at the sentencing hearing and elsewhere, showed that all the defendants participated in a series of mortgage fraud schemes involving more than $20 million in mortgage loans and hundreds of houses in Charlotte-area neighborhoods. The defendants included Pahutski who served as a loan officer, as well as a closing attorney, a real estate appraiser, another mortgage broker, and two realtors. The indictment also identified two other attorneys, three home builders (including one national homebuilder), and several real estate investors as co-conspirators in these schemes. One of the banks victimized by the schemes closed its doors in mid-2007 after 103 years of business in large part due to the scheme.

The indictment alleged that Pahutski participated in a “flip” mortgage fraud scheme where houses were purchased through fraudulent mortgage applications and use of other false documents. Pahutski was originally indicted in this case in connection with a scheme involving closing attorney Victoria Sprouse and real estate investor Stephen Hawfield, in which approximately 210 houses were purchased in a “flip scheme” through fraudulent mortgage applications to nBank for more than $15 million.

U.S. District Judge Martin Reidinger pronounced the 19 year sentence. In doing so, Judge Reidinger explained that he hoped others would note the sentence, and “see that they do not want to become mortgage fraudsters.” The Judge noted that the offense had caused substantial damage to nBank, which failed, and also had caused substantial damage to our financial system. Judge Reidinger said that the heavy sentence was based in part on the fact that Pahutski had been entrusted by the state of North Carolina with a license, and “was supposed to have been part of the firewall to prevent this [mortgage fraud] from happening, but instead became part of the problem.” Following the sentencing hearing, Judge Reidinger ordered that Pahutski be immediately taken into custody and
detained as a flight risk.

The case was investigated by Special Agents of the FBI, Charlotte, Special Agents of the IRS-CI, U.S. Postal Inspectors, and criminal investigative personnel of the NC Insurance Commission. The case was prosecuted by Assistant U.S. Attorneys Kurt W. Meyers and Jenny Sugar of the U.S. Attorney’s Office, Criminal Division, Charlotte, NC, as well as former Assistant U.S. Attorney Matthew Martens.

United States v. Pahutski, et al
Docket Number: 3:07CR211
Michael D. Pahutski, 48 (Loan Officer)
Charlotte, NC
Guilty plea entered 3/3/09
Sentenced 5/6/11 to 228 months imprisonment to be followed by a five-year term of supervised release, 200 hours of community service, and ordered to pay $3,563,125.27 in restitution

Victoria L. Sprouse, 40 (Closing Attorney)
Charlotte, NC
Jury trial 3/23/09 – 4/1/09
Guilty verdict by jury 4/1/09
Awaiting sentencing

Michael Gee, 61 (Appraiser)
Hilton Head, SC
Guilty plea entered 3/10/2009
Sentenced 6/24/10 to 24 months imprisonment to be followed by a three-year term of supervised release and ordered to pay $3,563,125.27 in restitution

Gregory A. Mascaro, 44 (Real Estate Agent)
Harrisburg, NC
Guilty plea entered 6/9/08
Sentenced 2/27/09 to 24 months imprisonment to be followed by a three-year term of supervised release and ordered to pay $62,361.21 in restitution

Jules Springs, 43 (Loan Officer)
Charlotte, NC
Guilty plea entered 7/7/08
Sentenced 5/19/09 to 24 months imprisonment to be followed by a three-year term of supervised release and ordered to pay $62,361.21 in restitution

Gregory D. Rankin, 36 (Real Estate Agent)
Charlotte, NC
Guilty plea entered 6/25/08
Sentenced 2/27/09 to five years probation, first 23 months under home confinement

If you have knowledge of any of these who were involved in this massive scheme…please feel free to share your insights.

YOUR COMMENTS ARE WELCOME!