Department of Justice loses another one of its top cops on mortgage fraud

Less than a month after Stuart Delery, the third in command at the Department of Justice and leader of the DOJ’s investigations into the conduct of banks during the financial crisis, announced he was stepping down, the DOJ is about to lose another of its big guns in the fight against mortgage fraud.

The DOJ announced Wednesday that Benjamin Wagner, who served as the U.S. Attorney for the Eastern District of California and spent five years as a co-chair of the Mortgage Fraud Working Group of the President’s Financial Fraud Enforcement Task Force, is resigning at the end of April.

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California real estate agent gets 14 years in prison for $30M mortgage fraud

Tried to get witnesses to lie to the FBI and blame a dead woman

A California woman will spend the next 14 years in prison after being convicted for her role in a mortgage fraud scheme that involved straw buyers, cost financial institutions over $16 million, and subsequently lead to attempts to coerce witnesses to lie to the FBI and blame a dead woman for the fraud.

According to the U.S. Attorney’s Office for the Eastern District of California, Vera Kuzmenko was convicted on multiple counts of mail and wire fraud, witness tampering, and money laundering for her involvement in a mortgage fraud scheme involving more than 30 properties in the Sacramento area from late 2006 through early 2008.

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Manager of ‘predatory’ loan modification law firm sent to jail

A San Diego businessman will spend the next nine months in prison after being convicted for his role in a fraudulent mortgage loan modification business that presented itself as a “law firm” in order to con more than 1,000 struggling homeowners out of more than $3 million total.

According to a release from the U.S. Attorney’s Office for the Southern District of California, Michael Nazarinia worked as the manager of a “predatory loan modification law firm,” which promised loan modifications in exchange for money but did not deliver on its promises.

The U.S. Attorney’s Office said that Nazarinia worked as the manager of “Haffar & Associates,” which was owned by figurehead attorney Mohamed Haffar, and recruited new customers using telemarketers who lied to clients in order to induce more than 1,000 people to sign up to pay more than $3.5 million in total.

According to the release, Nazarinia supervised Haffar & Associates “case managers,” who submitted loan modification applications and negotiated with the banks on behalf of clients.

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GM lobs mortgage fraud accusation on ignition-switch trial plaintiff

An Oklahoma man, who is the first to take General Motors to court over its faulty ignition switches, saw his credibility called into serious question when lawyers for the automaker accused him of committing mortgage fraud.

The Detroit News (recapping a Bloomberg piece) has the full story on the courtroom battle between Robert Scheuer and GM.

From The Detroit News:

Robert Scheuer, a mail carrier who claims the defect disabled his air bag in a 2014 car wreck, blames GM for the eviction, arguing that memory loss he suffered in the accident caused him to misplace a $49,500 check for a down payment on the home in suburban Tulsa.

GM’s lawyers said they uncovered evidence that Scheuer, his wife and two children actually were kicked out of the house because a real estate agent found Scheuer had faked a $441,430.72 check stub from his federal government retirement account as “proof of funds” to close the sale.

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Ex-NFL star and his 74-year-old mother ordered to repay $615K for mortgage fraud

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, was convicted in August for his role in a mortgage fraud scheme that involved his 74-year-old mother and cost several financial institutions $1.2 million.

In October, Fryar received a sentence of five years for his convictions on charges of conspiracy and theft of deception. Allene McGhee, Fryar’s mother, was sentenced to three years of probation.

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Ocwen Financial, homeowners targets of mortgage fraud

State Attorney General Hector Balderas is warning of a “dangerous new scam” that is targeting New Mexicans who are having trouble paying their mortgages.

“Do not pay Ocwen mortgage payments by Moneygram in response to ‘Making Home Affordable’ offer letters or calls,” he said in a news release, referring to Ocwen Financial Group. “This is a scam … ”

How it works: Consumers get a letter offering them a “trial payment plan” or loan modification, and they’re given a phone number to make the payments.

“Ocwen has investigated the matter and determined that third-parties are posing as Ocwen employees to obtain payment from consumers,” the alert says.

Beware if you get a call about this. The callers at times will spoof an Ocwen phone number, often in the 214 area code, Balderas said. Consumers who have questions about their home loan can contact the real Ocwen at 800-746-2936. If you’re hit by the scam, call the AG’s Consumer Protection Division at 505-222-9100 or 1-800-678-1508.

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Recruiters in multi-million dollar mortgage fraud sent to prison

Defrauded 10 different lenders

Housingwire:

A Virginia man and woman will each spend two years in prison for leading a scheme that recruited straw buyers into a multi-year, multi-property mortgage fraud scheme that defrauded 10 different lenders.

Jerrold Fowler, 31, of Virginia, was sentenced by U.S. District Court Judge Richard Stearns to two years in prison, three years of supervised release, and ordered to pay restitution of $3,786,815 and to forfeit $7,413,712.

In June 2015, Fowler pleaded guilty to one count of wire fraud and one count of bank fraud.

Thursa Raetz, 40, of Virginia, was sentenced by Judge Stearns to two years in prison, three years of supervised release and ordered to pay restitution of $3,099,224 and to forfeit $7,413,712.

In June 2015, Raetz pleaded guilty to two counts of wire fraud and one count of bank fraud.

According to court documents, between Sept. 2006 and April 2008, Michael David Scott, a former real estate developer, arranged to purchase multi-family residences in Roxbury and Dorchester, Massachusetts and then sold individual condominium units in the buildings to straw buyers recruited by him and his co-conspirators, Fowler and Raetz.

Scott, Raetz, and Fowler recruited the straw buyers with promises that they would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, and with assurances that they also would share in profits when the units were resold, theDepartment of Justice said in an announcement.

BREAKING: Former NFL Player Gets Prison In Mortgage Fraud Scheme

Law360, Newark (October 2, 2015, 4:09 PM ET) — A New Jersey state judge on Friday imposed a five-year prison sentence on former NFL player Irving Fryar and gave his mother three years of probation over defense attorneys’ objections that a jury’s guilty verdict in the duo’s mortgage fraud trial went against the weight of evidence.

The defense attorneys hugged Allene McGhee as sheriff’s officers led her son out of the courtroom, after Burlington County Superior Court Judge Jeanne T. Covert read an opinion that concluded the jury’s verdict hadn’t “shocked the judicial consciousness,” the…

Source: Law360

Attorney in huge mortgage fraud exonerated

An attorney whose mortgage fraud conviction was touted as the biggest case of mortgage fraud in Nevada history has had his conviction overturned because of government misconduct.

Now David Mark has filed court papers seeking roughly $215,000 in attorney fees and expenses, alleging the record in his case “shrieks of prosecutorial misconduct and fabrication, if not perjury.”

“Mark, a New Orleans lawyer who was living in Las Vegas when the massive scheme unfolded, was found guilty in 2013 of one count of conspiracy to commit bank fraud, mail fraud and wire fraud; two counts of bank fraud and one count mail fraud,” initial reports said. “Mark had provided the FBI in November 2007 with information that led to the indictment of a prominent mortgage industry couple in a fraud scheme that prosecutors alleged cost banks more than $52 million.

“Prosecutors promised Mark immunity if he continued to cooperate against mortgage broker Steven Grimm and his ex-wife, real estate broker Eve Mazzarella,” local media reported.

The Las Vegas Review-Journal has the story.

Mark contended at his trial and in his appeal that he was indicted after federal prosecutors falsely accused him of violating an immunity agreement to testify against the key players in the mortgage fraud scheme. He was alleged to have “feigned memory loss” shortly before the trial.

In July a federal appeals panel tossed out the conviction after concluding that Pro relied on a “scant record” and “inaccurate” information from prosecutors about the immunity breach when he denied a defense motion to dismiss the case against Mark.

“When the government promises not to prosecute a witness in exchange for his cooperation, it cannot then indict the witness unless it proves that he failed to cooperate,” the panel wrote.

After the case was dismissed, Mark’s New Orleans lawyer, Michael Fawer, said Mark was “needlessly” put through the emotional trauma of a trial because of misconduct by prosecutors in the Nevada U.S. attorney’s office.

In court papers last week, Fawer alleged that Assistant U.S. Attorneys Brian Pugh and Sarah Griswold falsely told Pro that the immunity breach occurred during a July 2011 telephone conversation with Mark.

Mark contended he never had the conversation and documents later obtained from the U.S. attorney’s office by the defense showed no record of the call.

Source: Las Vegas Review-Journal

Bookkeeper sentenced for failing to report $24M mortgage fraud

Yet, no jail time for the banksters….

A bookkeeper who failed to report mortgage fraud was sentenced to two years’ probation, with six months to be served on home confinement, for his conviction for concealing massive financial institution fraud.

Ignacio Huergo was also ordered to pay restitution in the amount of $736,254.25 to M&T Bank.

Assistant U.S. Attorney Trini Ross, who is handling the case, stated that Huergo worked for the companies of Frank Garcia, Federal Guaranty Mortgage CompanyandGuaranty Realty and Investment as a bookkeeper and tax preparer between 2006 and 2008.

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