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Manhattan U.S. Attorney Charges 41 Defendants
in Coordinated Mortgage Fraud Takedown
Across New York State
Defendants Charged with Fraudulently Obtaining More Than
$64 Million in Residential Mortgages on More Than 100 Properties;
Lawyers, Mortgage Brokers, and Loan Officers Among
Those Arrested in "Operation Bad Deeds"
PREET BHARARA, the United States Attorney for the
Southern District 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, RENE FEBLES, the
Special Agent-in-Charge of the New York Field Office of the
Department of Housing and Urban Development, Office of Inspector
General ("HUD-OIG"), BRIAN G. PARR, the Special Agent-in-Charge
of the New York Field Office of the United States Secret Service
("USSS"), RONALD J. VERROCHIO, the Inspector-in-Charge of the New
York Division of the United States Postal Inspection Service
("USPIS"), and JON T. RYMER, the Inspector General for the
Federal Deposit Insurance Corporation, Office of Inspector
General ("FDIC-OIG"), announced today the unsealing of charges
against 41 defendants, in eight separate cases, for allegedly engaging in various mortgage fraud scams that collectively
defrauded lenders out of more than $64 million in home mortgage
loans on more than 100 properties across New York State. Among
those charged are six lawyers, seven loan officers, three
mortgage brokers, an accountant, and a residential property
appraiser.
As part of the coordinated takedown of "Operation Bad
Deeds," a joint federal, state, and local law enforcement
operation targeting mortgage fraud crimes, 31 defendants were
arrested or surrendered to authorities today in New York,
Pennsylvania, Ohio, and North Carolina. One additional defendant
is expected to surrender to authorities later today. The
defendants taken into custody today are expected to be presented
in federal court later this afternoon.
Four of the defendants were previously charged and will
appear in Manhattan federal court at a later date, and five
defendants remain at large.
The mortgage fraud scams alleged in the cases announced
today included, among other things, property flips, equity
stripping, and appraisal and loan fraud. In one case, defendants
operated a foreclosure rescue scheme, targeting individuals who
were on the verge of losing their homes by tricking them into
giving up the equity in the properties with false promises that
their homes would be saved.
PREET BHARARA, the United States Attorney for the
Southern District of New York, said: "As the U.S. economy
struggles, we will continue to have a zero tolerance policy for
those who defraud financial institutions and prey on homeowners
on the brink of foreclosure. The type of criminal conduct
charged today constricts the credit markets and makes it harder
for honest people to realize the American dream of home
ownership. It is especially alarming when lawyers, loan
officers, and mortgage brokers treat their professional licenses
as license to loot banks and profit from other people's pain.
Particularly in this down economy, the message to those
professionals and their alleged criminal cohorts is simple: we
will find you, arrest you, and send you to jail."
JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge
of the New York Field Division of the FBI, said: "Combating
mortgage fraud is a priority because mortgage lending and the
housing market have such an impact on the nation's economy. The
defendants charged today include mortgage brokers, lenders,
lawyers and buyers. The FBI is aggressively pursuing criminal
conduct at every stage of the mortgage process."
RICHARD H. NEIMAN, the Superintendent of Banks for New
York State, said: "A key factor leading to the mortgage crisis
was the failure of the gatekeepers—including mortgage brokers
and attorneys. Unfortunately, instead of protecting our
financial system, in some cases they abused their positions and
joined criminal schemes to steal millions of dollars. The
Banking Department's Criminal Investigation Bureau will continue
to work with our law enforcement partners to pursue individuals
that, through fraudulent activities, attempt to undermine the
financial system."
RENE FEBLES, the Special Agent-in-Charge of the New
York Field Office of the HUD-OIG, said: "One of our government's
most important responsibilities is administering and enforcing
our laws that bring a degree of order and protect our citizens
from fraudsters and wrongdoers. This joint prosecutorial effort
is our continuing demonstration of our commitment to ensuring
that mortgage programs remain whole for borrowers throughout the
nation."
BRIAN G. PARR, the Special Agent-in-Charge of the New
York Field Office of the USSS, said: "The effects of mortgage
fraud continue to adversely impact our nation's financial
systems. The results of this investigation are a testament to
the collaborative efforts between the Secret Service and our law
enforcement partners. We will continue to aggressively pursue
those that victimize our citizens and our banks."
RONALD J. VERROCHIO, the Inspector-in-Charge of the New
York Division of the USPIS, said: "The arrests today are
emblematic to the extent Postal Inspectors will work closely with
State and Federal agencies to combat fraud which victimizes
individuals, the economy, and our neighborhoods."
JON T. RYMER, the Inspector General for the FDIC said:
"The FDIC-OIG is committed to its partnerships with others in the
law enforcement community as we address mortgage fraud cases
throughout the country. The American people need to be assured
that their government is working to ensure integrity in the
financial services and housing industries and that those involved
in criminal activities that undermine that integrity will be held
accountable."
The Cases
The cases announced today are described in greater
detail below. The charges against each defendant and the
corresponding maximum potential penalties are contained in charts
attached to this press release.
United States v. Lavette Bills, et al.
Ten defendants are charged in an 11-count Superseding
Indictment with perpetrating a mortgage fraud scheme involving
loans totaling over $5.6 million for at least 11 different
residences, including through a foreclosure rescue scheme. The
Superseding Indictment expands on the allegations in the original
six-count indictment, which was returned in May 2009, by
including six new defendants and multiple new counts.
According to the Superseding Indictment, the defendants
identified distressed properties that could be purchased at a low
price, usually by targeting homeowners who had fallen behind on
their mortgage payments and whose homes were facing foreclosure.
In most instances, the defendants induced the homeowners to sell
their homes to companies controlled by the defendants, including
NNI, LLC, which was controlled by LAVETTE M. BILLS, and Recani
Inc., which was controlled by WAYNE GREEN. These companies
usually purchased the properties via "short sales," in which the
lenders agreed to sell the properties for less than the balance
owed on the loans and to discharge the remainder of the loans.
The defendants then resold or "flipped" the properties to thirdparty
straw buyers at a higher price, usually on the same day.
In other instances, the defendants tricked the homeowners into
deeding or selling their homes to other persons, by falsely
promising the homeowners that title would be returned to them at
a later date or telling the homeowners that they were merely
refinancing their homes.
To accomplish this, the defendants also deceived 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 properties, either because the payments would be made on
their behalf, or because the payments would be covered by the
rental income from the properties. 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 for hundreds of
thousands of dollars in loans they were unable to repay; and the
lenders suffered losses from those loans, which eventually went
into default.
BILLS was the Chief Executive Officer of MTC Real
Estate, Inc., in the Bronx, and KIRK LACEY, OMAR HENRY, and PETER
CHEVERE, all worked for MTC during various periods. The
defendants, through MTC, identified the distressed homeowners,
recruited straw buyers, and prepared fraudulent documents for
submission to the lenders. GREEN and SHERESE W. GLENN processed
home mortgage loan applications through various mortgage
brokerage firms operating in the New York City area on behalf of
MTC and others. REVLON HINDS was the purported President of
Recani Inc., and signed closing documents on its behalf. JOSEPH
EVANS and JERRY CALONGE recruited straw buyers to obtain home
mortgage loans in transactions processed by GREEN and GLENN.
MARK BARNETT was a loan officer at Golden First Mortgage
Corporation, who processed fraudulent loan applications for MTC.
United States v. Peggy Persaud, et al.
Eight defendants are charged in a 10-count Indictment
in connection with an alleged mortgage fraud scheme involving
over $23 million of fraudulently obtained loans from lenders
through a mortgage brokerage called GuyAmerican Funding Corp. in
Queens, New York. Three of the defendants, PEGGY PERSAUD, ORETTE
KILLIKELLY, and GEORGE ESSO, were loan officers at GuyAmerican.
PEGGY PERSAUD, as a manager of a branch office of GuyAmerican,
received hundreds of thousands of dollars in commissions based on
fraudulent loans submitted to lenders.
According to the Indictment, three of the defendants
charged in the scheme, ELTON LORD, RAFICK BAKSH, and MAHAMOOD
HUSSAIN, worked with GuyAmerican loan officers to recruit
distressed sellers and straw buyers, flipping properties multiple
times between different straw buyers, and stripping the equity
from those properties as they were resold with inflated market
values. For example, a property purchased by a straw buyer in
December 2006 in Queens, New York, for $355,000 was resold to
another straw buyer in April 2007—only four months later—for $680,000, to the benefit of the co-conspirators in the
scheme. In addition, the defendants often arranged for a single
straw buyer to purchase multiple properties within days or weeks
of each other, without disclosing the prior purchases on the
subsequent loan applications.
The loans submitted to the lenders allegedly contained
numerous false statements about the straw buyers who often had
little or no assets and modest or no incomes. Thus, the loans
contained false statements about the borrowers' employment,
income, assets and exiting debt. In addition, the loan
applications purportedly falsely represented that the straw
buyers intended to reside in the properties, when they did not.
Two lawyers, CHEDDI GOBERDHAN and RAVI PERSAUD, who acted as the
closing attorneys for most of the transactions and facilitated
the fraud by allegedly disbursing illicit payments to
co-conspirators, were also charged.
United States v. Beverly Johnson, et al.
Six defendants are charged in a one-count Complaint
with conspiracy to commit bank and wire fraud in connection with
their participation in a scheme to provide false information and
documents to lenders for the purchasing and refinancing of
properties. In total, the defendants allegedly obtained $5
million in loans on seven properties through fraud. Four of the
defendants, a mother and her three daughters, BEVERLY ANDREA
JOHNSON, a/k/a "Beverly Johnson," a/k/a "Beverly Samuels," a/k/a
"Andrea Johnson," CARONE JOHNSON, a/k/a "Carone Johnson-Holt,"
a/k/a "Carone Morris," CARIANNE JOHNSON, and CARRELL JOHNSON,
operated a title company called "Poui Land Services LLC" ("Poui
Land"). Poui Land acted as the title agent for many of the
closings charged as part of this case, generating significant
fees for the defendants, including, in one instance,
approximately $68,000. In some cases, the Complaint alleges that
the defendants failed to record the mortgages on the properties,
or to properly transfer the titles, which permitted the
defendants to obtain additional mortgage loans on the properties.
Furthermore, in some instances, the defendants refinanced
properties in their own names, submitting applications to banks
for loans that contained numerous misrepresentations regarding
their own income and assets, all in an effort to strip the equity
out of the properties through fraud. OLIVER ANDERSON operated a
financial services company called "OGA Group," and purportedly
provided fake employment verifications for some of the JOHNSONS'
transactions. BRADLEY SKIERKOWSKI was a loan agent at Eastern
American Mortgage who prepared fraudulent home mortgage loan
applications on behalf of the JOHNSONS for some of the properties
that are the subject of the Complaint.
United States v. Marlene Bossous, et al.
Five defendants are charged in a four-count Indictment
in connection with an alleged mortgage fraud scheme involving
over $13.5 million in fraudulently obtained loans through
Southwest and Pro Capital, two mortgage brokerages. Between 2005
and 2008, the defendants allegedly conspired to obtain loan
proceeds from numerous lending institutions on the basis of
fraudulent applications, which included false information
regarding the applicants' qualifications for the loans. In
particular, MARLENE BOSSOUS and DAYANARA VELASQUEZ worked at
those brokerages as loan agents and allegedly prepared the
fraudulent loan documents. Another defendant, FAITH ESIMAI,
operated a real estate agency called "Redeemed Realty" and
recruited straw purchasers, in addition to preparing false and
fraudulent loan applications for submission to lenders. In
connection with the scheme, the defendants also conspired to
create fake W-2s, pay stubs, and Certified Public Accountant
certifications, among other documents, and to submit those
documents to lending institutions to trick the lenders into
issuing loans to individuals who otherwise would not have
qualified for them. One of the defendants, NORMAN BARABASH, was
a certified public accountant who created fraudulent employment
and tax documents for a fee for submission with loan
applications. HAROLD JOHN, a/k/a "Reverend John," also created
false documents for submission to the lenders.
United States v. Danny Siony, et al.
Four defendants were charged in a twelve-count
Indictment unsealed today involving over $6.8 million in
allegedly fraudulent home mortgage loans obtained through a
mortgage brokerage firm called Joshua Funding Corp. As part of
the scheme, the defendants recruited and obtained home mortgage
loans on behalf of at least six straw buyers to fund the purchase
of more than 11 distressed properties in the New York City area.
According to the Indictment, DANNY SIONY, a/k/a "Rahim
Siuny Kalimi," and SHIRIN KALIMI, a/k/a "Shirin Siouny," operated
Joshua Funding Corp. through which they processed fraudulent loan
applications for straw buyers recruited by SIONY, EMMANUEL ROY,
and TARIFF DILL. In order to carry out the mortgage fraud
scheme, SIONY identified and placed bids on properties that were
for sale at auction, usually as the result of a foreclosure
proceeding. SIONY, ROY, or DILL then recruited straw buyers for
the properties, for whom the defendants obtained home mortgage
loans through the use of false and fraudulent documents. KALIMI
prepared and submitted the false and fraudulent documents to the
lenders, including loan applications which misstated the straw
buyers' employment, income, and assets, and falsified title
reports and phony contracts of sale. In each instance alleged in
the Indictment, the defendants represented to the lenders that a
company controlled by SIONY, Australian Open, was selling the
properties to the straw buyers at an inflated price when, in
fact, the company did not hold title to the properties at that
time and, in most instances, never held title to the properties
at all. Once the defendants had obtained home mortgage loans for
the straw buyers based on the inflated price, SIONY allegedly
used the loan proceeds to pay off the auction price, caused the
properties to be transferred to the straw buyers, and distributed
the remaining funds amongst his co-conspirators.
The Indictment also charges ROY, an attorney licensed
to practice law in the State of New York, who was paid to
represent some of the straw buyers at closings. ROY also
allegedly obtained a power of attorney for at least one of the
straw buyers he recruited to the scheme and signed documents on
the straw buyer's behalf.
United States v. Dean Reskakis, et al.
Three defendants are charged in a three-count
Indictment with participating in a mortgage fraud scheme
involving more than $6 million worth of fraudulent loans. As
part of the scheme, the defendants sought and obtained home
mortgage loans using straw buyers for homes at values that were
well in excess of the prices at which the sellers agreed to sell
the properties and well in excess of the prices at which the
properties were actually sold. The defendants, including DEAN
RESKAKIS, ADEOLU ADENIJI, a/k/a "Larry Ade," and SHARON FRIDAY,
a/k/a "Sharon Friday Cudjoe," created fake documents, including
phony contracts of sale, to trick the lenders into believing that
the significantly inflated sales prices were accurate. The
defendants recruited straw buyers to purchase the properties at
the inflated prices by, among other things, falsely telling them
that they were joining an investment club that would purchase and
try to either operate or resell the properties at a profit. The
defendants also submitted applications for home mortgage loans on
behalf of the straw buyers with numerous false statements,
including lies regarding the straw purchasers' income, assets,
and employment. DEAN RESKAKIS, an attorney admitted to practice
in the State of New York, served as the closing attorney or acted
as such in connection with the fraudulent transactions.
According to the Indictment, RESKAKIS allegedly distributed
proceeds to the co-conspirators, and caused forged and fraudulent
documents to be submitted to the lenders to make it appear as if
transactions involving the target properties occurred as
represented to the lenders in the home mortgage loan
applications. SHARON FRIDAY, a/k/a "Sharon Friday Cudjoe," acted
as an attorney for straw buyers of several of the target
properties, even though she allegedly was not licensed by the
State of New York to practice law. FRIDAY also purportedly
recruited and met with straw purchasers.
In one transaction, for example, according to the
Indictment, the defendants used a straw buyer, identified as
Straw Buyer 1, to obtain home mortgage loans for the purchase of
404 West 145th Street, New York, New York, in the aggregate
amount of approximately $1,920,000, with a purported purchase
price of $2,400,000. The loan application submitted to the bank,
JP Morgan Chase, for Straw Buyer 1 contained numerous false
statements to improve his creditworthiness. However, 404 West
145th Street was actually purchased at or around the same time
Straw Buyer 1 obtained the $1,920,000 in loans from JP Morgan
Chase by an entity controlled by ADENIJI, "Joam LLC," for
$1,250,000. The defendants allegedly used the mortgage loans
obtained by Straw Buyer 1 to pay off the initial purchase by Joam
LLC, and to enrich themselves. As alleged in the Indictment, the
difference between the actual purchase price of $1,250,000 and
the mortgage loans of $1,920,000 was the defendants' illicit
profits from the transaction. To conceal the true nature of the
transaction, the Indictment alleges that Reskakis caused to be
prepared a fake settlement statement reflecting the sales price
of $2,400,000.
United States v. Keren Misaghi, et al.
Three defendants are charged in a one-count Complaint
with conspiracy to commit wire fraud, in connection with their
obtaining a home mortgage loan in the approximate amount of
$650,000 for the purchase of a property in Brooklyn, New York.
In furtherance of the scheme, KEREN SADE MISAGHI, a/k/a "Karen
Sade Misaghi," a/k/a "Karen Sade," purportedly completed a loan
application on behalf of the purchaser that contained numerous
false statements, including about the purchaser's income, assets,
and employment. DAVID MISAGHI allegedly obtained a cashier's
check from a bank account he controlled, which was then altered
and used as a so-called "show check" at the closing for the
transaction, falsely reflecting a large down payment by the
purchaser. QUENTIN TUCKER was an appraiser who allegedly created
an inflated appraisal for the property by, among other things,
attaching photographs of a different location to the appraisal.
After the fraudulent transaction closed, and to hide the scheme,
KEREN SADE MISAGHI arranged for one month's mortgage payment to
be made on the property.
United States v. Dustin Dente, et al.
DUSTIN DENTE and BRANDON LISI, both of whom are
practicing lawyers, were charged in a one-count Complaint with
participating in a scheme to defraud various lenders by obtaining
mortgages through false and fraudulent information and
statements. According to the Complaint, the defendants used
straw purchasers to obtain the loans, and, in at least one
instance, misappropriated the proceeds of those loans. The
defendants are alleged to have fraudulently obtained home
mortgage loans with a total face value of over $3.5 million, many
of which are now in default and/or foreclosure.
The takedown of "Operation Bad Deeds" is the
culmination of a series of investigations conducted by the United
States Attorney's Office for the Southern District of New York,
the FBI, the New York State Banking Department, the HUD-OIG, the
USSS, the USPIS, and the FDIC-OIG.
Mr. BHARARA thanked all of the federal, state, and
local law enforcement agencies involved in the investigation for
their outstanding work. Mr. BHARARA also thanked the Kings
County District Attorney's Office, the Queens County District
Attorney's Office, the New York City Department of Investigation,
the Department of Homeland Security's United States Immigration
and Customs Enforcement, and the New York State Department of
Insurance for their invaluable assistance. He added that the
investigation is continuing.
The prosecution of the cases arising from "Operation
Bad Deeds" is being overseen by the Office's newly-formed Complex
Frauds Unit. The prosecution of United States v. Lavette Bills,
et al. is being handled by AMY R. LESTER and JASON A. MASIMORE.
The prosecution of United States v. Peggy Persaud, et al. is
being handled by ANTONIA M. APPS. The prosecution of United
States v. Beverly Johnson, et al. is being handled by JENNIFER E.
BURNS. The prosecution of United States v. Marlene Boussous, et
al. is being handled by AIMEE HECTOR. The prosecution of United
States v. Danny Siony, et al. is being handled by AMY R. LESTER.
The prosecution of United States v. Dean Reskakis, et al. is
being handled by ZACHARY A. FEINGOLD. The prosecution of United
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States v. Keren Misaghi, et al. is being handled by SEAN S.
BUCKLEY. The prosecution of United States v. Dustin Dente, et
al. is being handled by SEETHA RAMACHANDRAN and MICHAEL D.
LOCKARD.
The charges contained in the various charging
instruments discussed above are merely accusations, and the
defendants are presumed innocent unless and until proven guilty.
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