Tag Archives: mortgage fraud

U.S. sues Barclays, ex-executives for mortgage securities fraud

The U.S. Department of Justice on Thursday sued Barclays Plc (>> Barclays PLC) and two former executives on civil charges of fraud in the sale of mortgage-backed securities during the run-up to the 2008-09 financial crisis.

The lawsuit was filed after Barclays resisted a penalty the U.S. government had sought in settlement negotiations, a person familiar with the matter said. The person would not disclose the government’s demand.

Major U.S. banks, including JPMorgan Chase & Co (>> JPMorgan Chase & Co.) and Bank of America Corp (>> Bank of America Corp), have paid tens of millions of dollars to settle similar claims over misconduct in the sale and pooling of mortgage securities, which helped to cause the financial crisis.

Barclays was among a handful of European banks still under investigation by the Justice Department, according to company disclosures. Deutsche Bank (>> Deutsche Bank AG) and Credit Suisse (>> Credit Suisse Group AG) are also in settlement talks, sources have said.

Barclays is accused of deceiving investors about the quality of loans underlying tens of billions of dollars of mortgage-backed securities between 2005 and 2007, according to the lawsuit filed in U.S. District Court in Brooklyn.

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Justice Dept. approved diverting funds in Bank of America settlement

Bank of America was able to wipe about $225 million off its record $16.6 billion Justice Department mortgage fraud settlement by making donations to nonprofit and legal groups approved by the Obama administration.

But the bank only had to make $100 million in donations to do that, thanks to little-known provisions in the settlement, included at the Obama administration’s insistence.

Groups receiving the money include liberal organizations such as Hispanic civil rights group the National Council of La Raza ($1.5 million), the National Urban League ($1.1 million) and the Neighborhood Assistance Corporation of America ($750,000). Another $4.3 million went to the Local Initiatives Support Corporation, a nonprofit where former Clinton administration Treasury Secretary Robert Rubin is chairman.

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DOJ loses another top cop on mortgage fraud

The Department of Justice is about to lose another one of its top cops in its fight against mortgage fraud.

The DOJ announced Friday that John Walsh, the U.S. Attorney for the District of Colorado and the co-chair of the DOJ’s Residential Mortgage-Backed Securities Working Group, is stepping down, effective Aug. 10, 2016.

According to the DOJ, Walsh served as U.S. Attorney for more than six years, making him the longest serving Colorado U.S. Attorney since the 1980’s.

He was appointed to his position by President Barack Obama and confirmed unanimously by the United States Senate, beginning his term with the DOJ on Aug. 10, 2010.

According to Attorney General Loretta Lynch, Walsh played a key leadership role in securing a $7 billion settlement with Citigroup over residential mortgage-backed securities and collateralized debt obligations.

“U.S. Attorney John Walsh has served the people of the District of Colorado and the entire nation with extraordinary distinction,” Lynch said.

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FBI: Government conspiracy group may have helped fugitives escape

(CNN)John and Julieanne Dimitrion scammed good people out of their homes, the FBI says, and then they disappeared.

They were the “masterminds of a large fraud scheme,” the FBI’s Brandon Simpson told CNN’s “The Hunt with John Walsh,” which hit Tricia Dano’s family especially hard.
Dano blames the Dimitrions for the loss of their cherished family home in Honolulu’s Kaimuki neighborhood.
For Dano, it started in 1999 when she moved from Washington state back to Hawaii to help her mother take care of her ailing grandmother.
Her grandmother “felt that if she was going to pass, she wanted to be at home, right where she belonged,” Dano said.
When the family began having trouble making house payments, they decided to refinance their mortgage.
Seeing an ad for the Dimitrions’ company, Mortgage Alliance on TV, Dano and her mother made an appointment.

The pitch

The Dimitrions didn’t arrive until an hour into the meeting, Dano recalled. The couple made a memorable impression as they made their pitch wearing designer clothes and expensive jewelry.
The FBI said the Dimitrions pitched their scam like this: “We will have someone buy your property — but in name only. You’ll continue to live there and we’ll fix your credit and a year from now you’ll be able to buy that property back. You won’t lose it to foreclosure and you can keep your family home.”
“I thought, ‘These people definitely know what they’re doing,'” recalled Dano. “So we signed over the title, thinking that, ‘OK this is the first step to the rent-to-own process.'”
Then the Dimitrions found a “straw buyer” who purchased the Dano property in their name. That buyer was an acquaintance named Laura Cristo.
“They explained it to me that it was a short sale, that I wasn’t getting involved,” Cristo said.
She thought the Dimitrions were good people trying to help others, so Cristo said “OK.”
“I just started initialing and signing,” she remembered. “I never really read the papers.”

Former New Jersey councilman gets 5 years for $13 million mortgage fraud

A former councilman and failed mayoral candidate for the city of Kearney, New Jersey will spend the next five years in prison after pleading guilty for his role in a  $13 million mortgage fraud scam that involved using straw buyers to buy condominiums from financially distressed developers.

According to the U.S. Attorney’s Office for the District of New Jersey, John Leadbeater, 59, received a sentence of 60 months for conspiracy to commit wire fraud.

Per documents filed in this case and statements made in court, Leadbeater and several conspirators identified condos in Wildwood and Wildwood Crest, New Jersey that were “overbuilt” by developers, and then recruited straw buyers from New Jersey, New York, Ohio, Arkansas, and California, to purchase those properties.

According to the U.S. Attorney’s Office, those straw buyers had good credit scores, but lacked the financial resources to qualify for the mortgage loans.

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Ex-NFL star Irving Fryar serves only 8 months of 5-year prison term for mortgage fraud

Convicted of conspiring with 74-year-old mother to steal $1.2 million

Irving Fryar, who spent 16 years in the National Football League, starring for the New England Patriots, Miami Dolphins and Philadelphia Eagles during his career, is now a free man, after he recently walked out of New Jersey state prison after serving only eight months of a five-year sentence for mortgage fraud.

Last year, Fryar recieved a sentence of five years in prison after being convicted for his part in a scheme that involved taking out six home equity loans his mother’s home – at the same time.

In August of 2015, Fryar and his 74-year-old mother, Allene McGhee, were found guilty of conspiracy and theft of deception for a scheme that defrauded several financial institutions of $1.2 million.

According to court documents, five of the six loans taken out on McGhee’s home were taken out within a six-day period and four of the loans closed on a single day –Dec. 21, 2009.

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Florida pastor found guilty of mortgage fraud

And get this, the pastor faces a maximum sentence of 90 years for liar loans!

A Florida pastor is facing as much as 90 years in prison after being convicted of defrauding multiple mortgage lenders, the U.S. Attorney’s Office for the Middle District of Florida announced Monday.

According to evidence presented in court, Nelson Cristiano Machado, Jr. “knowingly participated” in a scheme to defraud mortgage lenders by lying about his personal information in order to obtain multiple mortgages.

In a release, the U.S. Attorney’s Office said that Machado, 50, entered into a sale contract for the purchase of two residences in Cape Coral, Florida – one for $509,900, and another for $249,900.

But on his loan applications, Machado “falsely represented” his employment, the balance of his bank account, and falsely declared that each of the homes would be his primary residence, the U.S. Attorney’s Office said.

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What Happened When the FBI Investigated Foreclosure Fraud in Florida

By David Dayen

Six years ago, FBI agents in Jacksonville, Florida, wrote a memo to their bosses in Washington, DC, that could have unraveled the largest consumer fraud in American history. It went to the heart of the shady mortgage industry that precipitated the financial crisis, and the case promised to involve nearly every major bank in the country, honing in on the despicable practice of using bogus documents to illegally kick people out of their homes.

But despite impaneling a grand jury, calling in dozens of agents and forensic examiners, doing 75 interviews, issuing hundreds of subpoenas, and reviewing millions of documents, the criminal investigation resulted in just one conviction. And that convict—Lorraine Brown, CEO of the third-party company DocX that facilitated the fraud scheme—was sent to prison for duping the banks.

Thanks to a Freedom of Information Act request, VICE has obtained some 600 pages of documents from the Jacksonville FBI field office showing how agents conducted a sprawling investigation. (The Jacksonville case is also featured in my new book, Chain of Title.) The documents suggest the feds gained a detailed understanding of how and why the mortgage industry enlisted third-party companies to create false documents they presented to courts, as detailed in the 2012 National Mortgage Settlement, for which the big banks paid billions in civil fines. The banks’ conduct is described in the settlement documents as “unlawful,” and the Jacksonville FBI had it nailed almost two years earlier.

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Former SunTrust Mortgage VP, his wife, her brothers sent to jail for mortgage fraud

This conspiracy was all in the family

For Mohsin Raza, his wife, Humaira Iqbal, and her brothers Farukh Iqbal and Mohammad Ali Haider, committing mortgage fraud really was a family affair.

And, as it turns out, the family that plays together also goes to jail together.

According to the U.S. Attorney’s Office for the Easter District of Georgia, Raza, his wife, Humaira, and her brothers will each serve time in federal prison for their roles in a scheme that saw the group falsify loan documents and commit mortgage fraud while all four were employed by SunTrust Mortgage in the 2000’s.

The U.S. Attorney’s Office stated that in 2005, Raza was hired to serve as vice president at SunTrust Mortgage, and the company then tasked him with opening a new office location in Annandale, Virginia.

Raza staffed the office with his wife and her brothers. Farukh Iqbal and Mohammad Ali Haider joined the company and served as loan officers.

From the time they joined the company until they left in 2007, the group falsified loan applications for borrowers and purchased fake tax documents to support the false loan applications.

According to court documents, SunTrust Mortgage underwriters approved the loans, which totaling several million dollars, based in large part upon the fake documents in the files, and ultimately borrowers were given loans to buy homes that they could not afford.

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New York county legislator, former city official among victims of mortgage fraud conspiracy


Own mortgage company allegedly defrauded by lawyer, broker, appraiser, Realtor

A mortgage company owned by a New York country legislator and a former Syracuse city auditor is among the alleged victims of a mortgage fraud conspiracy that involved a lawyer, a mortgage broker, a real estate appraiser, and a Realtor working together to defraud lenders out of more than $4 million.

According to the U.S. Attorney’s Office for the Western District of New York, a federal grand jury handed down a 24-count indictment charging Gregory Gibbons, a mortgage broker; Julio Rodriguez, a real estate appraiser; Laurence Savedoff, a lawyer; and Tina Brown, a Realtor, with conspiracy to commit wire and mail fraud affecting financial institutions, wire and mail fraud affecting financial institutions, and bank fraud.

The group, all of New York City, is accused of perpetrating a scheme where they allegedly inflated the true income, asset and employment information of borrowers in an effort to obtain mortgages on behalf of those borrowers.

According to the U.S. Attorney, to secure a loan, the group would allegedly submit, falsified employment documents that included, in some cases, phony income, assets, and places of employment.

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