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Eight Sentenced in Multimillion-Dollar Mortgage Fraud
and Foreclosure Rescue Schemes
LEV L. DASSIN, the Acting United States Attorney for
the Southern District of New York, announced that ALEKSANDER
LIPKIN, a/k/a "Alex," GARRI ZHIGUN, GALINA ZHIGUN, JOSEPH
PAPERNY, FAINA PETROVSKAYA, JOHN GELIN, TOMER SINAI, and DANIEL
MIKHLIN were each sentenced by United States District Judge
RICHARD J. HOLWELL in Manhattan federal court for their roles in
a multimillion-dollar, sub-prime mortgage fraud scheme, as
charged in United States v. Aleksander Lipkin, et al., S2 06 Cr.
1179. LIPKIN was sentenced to 110 months in prison for his role
as a leader of the mortgage fraud scheme as well as his
involvement in another foreclosure rescue scheme charged in
United States v. Maurice McDowall, et al..
According to the Indictment, other documents filed in
the case, and statements made during the various guilty plea and
sentencing proceedings:
From 2004 through January 2007, LIPKIN was a leader in
a wide-ranging mortgage fraud scheme involving mortgage brokers
and loan processors who worked at the Brooklyn mortgage brokerage
firm, AGA Capital NY, Inc., and its successors, as well as real
estate appraisers, loan account executives, a paralegal, a
lawyer, straw buyers, and others. LIPKIN and his co-defendants
submitted loan applications containing false information and
material omissions, as well as other false documentation such as
bank statements, to obtain loans that otherwise would not have
been funded. For example, acting through straw purchasers,
LIPKIN and his partner, GARRI ZHIGUN, purchased a block of ten
rent-regulated condominium apartments in a building on
Manhattan's Upper West Side. LIPKIN, GARRI ZHIGUN and their
associates obtained mortgages for the straw purchasers to finance
100 percent of the purchase price of the Apartments. However,
none of the documents submitted to the lenders disclosed that
certain buyers were seeking to purchase more than one apartment
as a "primary residence," or that the apartment was already
occupied and therefore unsuitable for a primary residence, or
that the apartment was subject to rent regulation laws.
Then, only months after initial purchase of the block
of apartments, LIPKIN, GARRI ZHIGUN and their co-defendants
resold, or "flipped," the apartments to other straw-buyers, at
prices almost twice the amount of the initial purchase price.
They did so by submitting false information and documents to
various lenders, and thus obtained almost $13 million in
additional loans. Most of those additional loans are now in
foreclosure.
During the course of the mortgage fraud scheme, AGA
Capital, and its successors, brokered over one thousand home
mortgages and home equity loans with a total face value of at
least $200 million dollars and earned at least $4 million in
commission fees on the loans. The various lenders defrauded by
the scheme have claimed actual losses of approximately $11.6
million on loans that have completed foreclosure.
Of the 27 defendants charged in United States v.
Aleksander Lipkin, et al., 25 pleaded guilty; one of the
defendants -- ALEXANDER KAPLAN -- was found guilty following a
jury trial and is scheduled to be sentenced on September 10,
2009.
In addition to the 110-month prison term, LIPKIN, 30,
was sentenced to five years' supervised release. Judge HOLWELL
also sentenced LIPKIN to a concurrent term of 110 months' in
prison for his role in a separate mortgage foreclosure rescue
scheme to which LIPKIN pleaded guilty in United States v. Maurice
McDowall, et al., 07 Cr. 1054. LIPKIN was also ordered to
forfeit $7 million and pay approximately $11.6 million in
restitution.
GARRI ZHIGUN and JOSEPH PAPERNY were sentenced by Judge
HOLWELL on May 28, 2009. GARRI ZHIGUN, 32, supervised the
operations of AGA Capital and was LIPKIN's business partner, as
described above. GARRI ZHIGUN was sentenced to 100 months in
prison, three years' supervised release, and was ordered to
forfeit $2.5 million and pay approximately $11.6 million in
restitution. JOSEPH PAPERNY, 36, was a mortgage broker and was
sentenced to 30 months in prison, three years' supervised
release, and was also ordered to forfeit $1 million and pay
approximately $11.6 million in restitution.
GALINA ZHIGUN and FAINA PETROVSKAYA were sentenced by
Judge HOLWELL on May 21, 2009. GALINA ZHIGUN, 55, was the record owner and registered broker of AGA Capital and was sentenced to
38 months in prison and three years' supervised release. In
addition, GALINA ZHIGUN was ordered to pay a fine of $7,500,
forfeit $1 million, and pay $1 million in restitution.
PETROVSKAYA, 36, was a loan processor and was sentenced to time
served, 30 months' supervised release with six months of home
confinement, and was also ordered to pay a fine of $2,000.
JOHN GELIN, TOMER SINAI, and DANIEL MIKHLIN were
sentenced by JUDGE HOLWELL on May 20, 2009. JOHN GELIN, 41, was
one of the investors who recruited and used straw buyers to
purchase real estate and created fake bank statements and other
fraudulent documents to submit to lenders. GELIN was sentenced
to 36 months in prison, three years' supervised release and was
ordered to forfeit $1 million and pay approximately $11.6 million
in restitution. SINAI, 31, was a licensed real estate appraiser
who inflated appraisals for the defendants. SINAI was sentenced
to 9 months in prison, three years' supervised release, and was
ordered to forfeit $70,000. MIKHLIN, 32, was a mortgage broker
and was sentenced to 27 months in prison, three years' supervised
release, and was ordered to forfeit $240,000 and pay
approximately $11.6 million in restitution.
Mr. DASSIN praised the efforts of the Federal Bureau of
Investigation, the New York City Police Department, and the
United States Immigration and Customs Enforcement. He also
thanked the New York State Attorney General's Office for its
outstanding work in the investigation.
Assistant United States Attorneys JONATHAN B. NEW and
AVI WEITZMAN are in charge of the prosecutions in United States
v. Alexander Lipkin et al. Assistant United States Attorneys
JULIAN J. MOORE and JOHN T. ZACH are in charge of the
prosecutions in United States v. Maurice McDowall, et al.
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