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Four Indicted in $3 Million Mortgage Fraud and
Foreclosure Rescue Scheme
LEV L. DASSIN, the Acting United States Attorney for
the Southern District of New York, JOSEPH M. DEMAREST JR., the
Assistant Director-in-Charge of the Federal Bureau of
Investigation's New York Field Division ("FBI"), and BRIAN G.
PARR, the Special Agent-in-Charge of the New York Field Office of
the United States Secret Service ("USSS"), announced the filing
yesterday of a six-count Indictment against LAVETTE M. BILLS,
KIRK LACEY, OMAR HENRY, and PETER CHEVERE, charging them with
perpetrating a mortgage fraud scheme involving loans totaling
over $3 million on at least six different residences. BILLS, 36,
of Briarcliff Manor, New York, and LACEY, 36, of Pembroke Pines,
Florida, were previously charged in a criminal Complaint filed in
Manhattan federal court on March 17, 2009. HENRY, 26, of the
Bronx, New York, and CHEVERE, 21, also of the Bronx, New York,
surrendered to authorities this morning and are expected to be
presented later today in Manhattan federal court.
According to the Indictment filed yesterday in
Manhattan federal court:
BILLS was the Chief Executive Officer of MTC Real
Estate, Inc., in the Bronx, and LACEY, HENRY, and CHEVERE all
worked for MTC during various periods between 2008 and in or
about March 2009. BILLS targeted homeowners who had fallen
behind on their mortgage payments and whose homes were facing
foreclosure by running radio advertisements and appearing on
radio programs representing that she was a foreclosure specialist
and had the ability to keep a home from going into foreclosure.
BILLS and LACEY were then able to convince some of these
homeowners to sell or transfer their homes to BILLS or to a
company BILLS controlled, NNI, LLC. This was usually done via a
"short sale," in which the lender agreed to sell the property for
less than the balance owed on the loan and to discharge the
remainder of the loan. In at least one case, involving a
residence on Tinton Avenue in the Bronx, BILLS convinced the
homeowner to place BILLS' name on the deed to the house and to
"gift" the equity in the house to BILLS, in return for BILLS'
fraudulent promise to transfer the house back to a relative of
the homeowner. However, without the knowledge of either the
lenders who approved the short sales, or of the selling
homeowners, BILLS and LACEY or their co-conspirators "flipped"
the properties to third-party straw buyers at a higher price,
usually on the same day or within a short period of time. The
sales price in the second transactions–the "flips" -- was often
significantly higher–typically by $150,000 or more -- than the
short sale price, yet the homeowners typically received little or
no money from the sale of their homes.
To accomplish this, BILLS and LACEY deceived both the
straw buyers and the lenders who were providing the mortgages to
finance the purchases. In some instances, the straw buyers
thought that they were helping the homeowner "save" his or her
home from foreclosure, or they were told that they were
purchasing an investment property. The straw buyers were also
often told that they would not need to make mortgage payments on
the property, either because the payments would be made on their
behalf, or because the payments would be covered by the rental
income from the property. The defendants convinced lenders to
give the straw buyers mortgages to purchase properties the straw
buyers could not otherwise afford by falsifying certain personal
and financial information about the straw buyers. For example,
the defendants prepared and submitted to the lenders documents
containing false statements about the straw buyers' employment,
income, and assets.
As a result of their fraud, the defendants profited
from their "flips" of the properties; the homeowners lost title
to their homes; the straw buyers became liable on hundreds of
thousands of dollars they were unable to repay; and the lenders
suffered losses from those loans, which eventually went into
default.
Each defendant is charged with one count of conspiracy
to commit bank fraud and wire fraud. In addition, BILLS is
charged with three counts of bank fraud, one count of wire fraud,
and one count of false statements; LACEY is charged with one
count of wire fraud and one count of bank fraud; and HENRY and
CHEVERE are charged with one count of bank fraud. The conspiracy
charge, bank fraud charges, and false statement charge each carry
a maximum potential sentence of thirty years in prison and a fine
of the greater of $1,000,000 or twice the gross gain or loss
resulting from the crime. The wire fraud charge carries a
maximum sentence of twenty years in prison and a fine of the
greater of $250,000, or twice the gross gain or loss resulting
from the crime.
The Indictment also seeks forfeiture of the alleged
proceeds obtained from the charged offenses.
The case is assigned to Chief United States District
Judge KIMBA M. WOOD.
Mr. DASSIN praised the work of the FBI and USSS for
their assistance in this case.
Assistant United States Attorneys AMY LESTER and JASON
MASIMORE are in charge of the prosecution.
The charges and allegations contained in the Indictment
are merely accusations, and the defendants are presumed innocent
unless and until proven guilty.
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