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Manhattan U.S. Attorney Charges 12
in Massive Mortgage Fraud Scheme
Corrupt Mortgage Brokers, Loan Officers, and Attorneys
Fraudulently Obtained $9 Million
Worth of Residential Mortgages
PREET BHARARA, the United States Attorney for the
Southern District of New York, ANDREW CUOMO, the Attorney General
of the State of New York, JOSEPH M. DEMAREST, JR., the Assistant
Director-in-Charge of the New York Field Division of the Federal
Bureau of Investigation ("FBI"), RICHARD H. NEIMAN, the
Superintendent of Banks for New York State, BRIAN G. PARR, the
Special Agent-in-Charge of the New York Field Office of the
United States Secret Service ("USSS"), and RONALD J. VERROCHIO,
the Inspector-in-Charge of the New York Division of the United
States Postal Inspection Service ("USPIS"), announced today the unsealing of a seven-count Indictment charging 12 individuals—including mortgage brokers, loan officers, and attorneys—with
engaging in a scheme to defraud various lending institutions by
using fictitious identities and documents to obtain more than $9
million in residential mortgages. All 12 defendants were
arrested this morning and are expected to be presented in federal
court later today.
As alleged in the Indictment filed in Manhattan federal
court:
The defendants and their co-conspirators purchased
dozens of residential properties throughout New York City and
Long Island with fraudulent mortgages. These mortgages, which
amounted to 100 percent of the purchase price of the residences,
were obtained using names of fictitious individuals or
individuals whose identification information was misappropriated
or misused.
To facilitate the fraud, the defendants provided the
lending institutions with false identification documents, such as
false driver's licenses and social security cards; false
employment, income, and rental information; and fraudulent bank
statements. Most of the loans are now in default.
Roles In The Mortgage Fraud Scheme
The defendants are alleged in the Indictment to have
played the following roles in the mortgage fraud scheme:
JEFFREY LAROCHELLE, 29, of Bay Shore, New York,
processed loans through Reliable Capital, a mortgage brokerage
firm. LAROCHELLE identified target properties, supervised and
coordinated the creation of false information for straw
identities and the submission of fraudulent loan applications and
other documents to lenders, and coordinated the activities of
other co-conspirators.
ERIC FINGER, 44, an attorney from Mineola, New York,
acted as the settlement agent on behalf of the lender in
connection with closings on many of the target properties. Among
other things, FINGER made payments from mortgage loan proceeds to
other members of the conspiracy and hid the true disbursements of
the loan proceeds from lenders by preparing false mortgage
documents.
DENISE PARKS, 43, of Olive Branch, Mississippi,
processed loans through Atlas Home Equities. PARKS prepared fraudulent mortgage loan applications and falsely verified the
employment and residential information for various straw
identities.
FORIDUZZAMAN SARDER, 40, of Jackson Heights, New York,
coordinated the use of various straw identities to buy homes with
residential mortgage loans. SARDER gave his contact information
to mortgage brokers and mortgage lenders to provide verification
of the loan application information of certain straw identities.
SAKAT HOSSAIN, 43, of Jackson Heights, New York, posed
as several different straw identities purportedly buying various
target properties. In exchange for posing as the straw
identities, HOSSAIN received payments from the loan proceeds.
MIKAEL HUQ, 34, of Astoria, New York, among other
things, created false identification documents in the names of
straw identities for use at closings for target properties.
REGINALD JOHNSON, 36, of St. Albans, New York,
controlled the Hempstead office of Reliable Capital. Among other
things, JOHNSON prepared fraudulent mortgage loan applications
and falsely verified the employment and/or residential
information submitted in connection with the applications.
FREDERICK WARREN, 35, of Miller Place, New York,
processed loans through Reliance Capital and other brokers.
WARREN prepared and processed fraudulent mortgage loan
applications and participated in identifying target properties.
DORIAN BROWN, 36, of Mount Sinai, New York, was a loan
officer at Lend America, a mortgage lender and broker located in
Long Island, New York. BROWN identified target properties,
processed fraudulent mortgage loan applications, and coordinated
the use of the false identities.
FRITZ BONAVENTURE, 28, of Lithonia, Georgia, was an
independent contract employee at Lend America. BONAVENTURE
identified target properties, coordinated the use of false
identities and fraudulent identification documents, and provided
information about the straw identities to mortgage brokers, loan
officers and loan processors.
JOELL BARNETT, 36, an attorney from Brooklyn, New York,
acted as either the buyer's or seller's attorney in connection
with the sale of some of the target properties. BARNETT, among
other things, received payments from the loan proceeds which were not disclosed to lenders and disbursed those funds to other
members of the conspiracy.
BRANDON LISI, 36, an attorney from Glen Cove, New York,
prepared sale contracts for the purchase of target properties and
procured straw buyers to act as purchasers for target properties.
The Charges
The charges contained in the Indictment include one
count of conspiracy to commit bank fraud and wire fraud, one
count of bank fraud, and five counts of wire fraud. A chart of
the charges contained in the Indictment and the corresponding
maximum potential penalties for each defendant is attached to
this press release.
Of the 12 defendants arrested earlier today,
LAROCHELLE, FINGER, SARDER, HOSSAIN, HUQ, JOHNSON, WARREN, BROWN,
BARNETT, and LISI are expected to be presented in Manhattan
federal court later today. BONAVENTURE and PARKS are expected to
be presented in federal court in the Northern District of Georgia
and the District of Mississippi, respectively.
The filing of the charges is the culmination of a longterm
investigation conducted by the United States Attorney's
Office for the Southern District of New York, the New York State
Attorney General's Office, the New York State Banking
Department's Criminal Investigations Bureau, the FBI, the USSS,
and the USPIS. Valuable assistance also was provided by
Department of Homeland Security's United States Immigration and
Customs Enforcement, the New York State Department of Motor
Vehicles, the New York City Department of Probation, and the
Social Security Administration.
Mr. BHARARA thanked all of the federal, state, and
local law enforcement agencies involved in the investigation for
their outstanding work. He added that the investigation is
continuing.
"The U.S. economy is still reeling from the damage done
by mortgage fraud schemes like the one unraveled today. These
charges expose the corrupt conduct of industry insiders who
allegedly manipulated the mortgage markets to fraudulently obtain
millions in loans. What is especially disturbing is that two of
the alleged fraudsters were attorneys who used their law degrees
to cheat the system and line their pockets. We will continue to prosecute corrupt custodians of the mortgage markets to the full
extent of the law because our financial system depends on it,"
said PREET BHARARA, the United States Attorney for the Southern
District of New York.
"This is exactly the type of criminal activity that was
caused by—and contributed to—the terrible mortgage crisis
facing our nation. These defendants were allegedly able to
obtain millions of dollars in home loans for phantom buyers
precisely because obtaining these loans was far too easy at the
time. As we work to reform our nation's mortgage regulation, law
enforcement must continue to collaborate to ensure that those who
exploited the system for their personal financial gain are
brought to justice," said ANDREW CUOMO, the Attorney General of
the State of New York
"The scheme alleged in the indictment is a model of
vertical integration. There were corrupt participants at each
step of the mortgage process, from buyers to lenders to lawyers.
The one obvious flaw in their scheme was that they got caught,"
said JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of
the New York Field Division of the Federal Bureau of
Investigation.
"This multifaceted mortgage fraud scheme represents one
of the most egregious types of criminal behavior since it
involves attorneys and brokers who, instead of being the
gatekeepers that protect our financial system, abused their
positions and joined a conspiracy to steal millions of dollars.
I am proud of the outstanding work the Banking Department's
Criminal Investigation Bureau has performed since the inception
of this investigation and thank the SDNY, FBI and NYSAG's office
and our other law enforcement partners that worked with us on
this investigation," said RICHARD H. NEIMAN, the Superintendent
of Banks for New York State.
"Mortgage fraud is a continuing threat to our nation's
financial system, compromising the identities of ordinary
citizens. The Secret Service is committed to investigating these
types of crimes, utilizing strong interagency partnerships, in
order to bring these perpetrators to justice," said BRIAN G.
PARR, the Special Agent-in-Charge of the New York Field Office of
the United States Secret Service.
"The Postal Inspectors will aggressively pursue these
cases to ensure public confidence in the mortgage financial
markets," said RONALD J. VERROCHIO, the Inspector-in-Charge of the New York Division of the United States Postal Inspection
Service.
Assistant United States Attorneys MICHAEL D. LOCKARD
and RYAN P. POSCABLO, and Assistant Attorney General MERYL LUTSKY—who is designated as a Special Assistant U.S. Attorney in this
case—are in charge of the prosecution.
The charges contained in the Indictment are merely
accusations, and the defendants are presumed innocent unless and
until proven guilty.
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