Attorney Charged in Property Mortgage Scam

A Massachusetts attorney, Michael R. Anderson, 41, of Framingham, was charged last week in federal court with wire fraud, bank fraud, and money laundering in connection with a multi-year, multi-property mortgage fraud scheme in Dorchester and Roxbury. United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of Internal Revenue Service, Criminal Investigation – Boston Field Division, announced today that the defendant was charged in an Information with 16 counts of wire fraud, nine counts of bank fraud, and two counts of money laundering. Continue reading “Attorney Charged in Property Mortgage Scam

North Carolina Real Estate Speculator Pleads Guilty to Bid Rigging in Real Estate Foreclosure Auctions

A Raleigh, N.C., real estate speculator pleaded guilty to conspiring to rig bids for public real estate foreclosure auctions held in multiple counties in eastern North Carolina, the Department of Justice announced today.

Christopher J. Deans pleaded guilty yesterday in U.S. District Court in Greenville, N.C., for participating in a conspiracy to rig bids during the real estate foreclosure auction process in eastern North Carolina from at least as early as April 2003 until at least April 2005.   The primary purpose of the conspiracy was to suppress and eliminate competitive bidding on foreclosed properties and obtain selected real estate offered at public foreclosure auctions at non-competitive prices. Continue reading “North Carolina Real Estate Speculator Pleads Guilty to Bid Rigging in Real Estate Foreclosure Auctions

Zweifel calls for $127 million housing package for Missourians suffering from mental illness

State Treasurer Clint Zweifel today called on the Missouri Housing Development Commission to pass a multi-million dollar package to provide housing for Missourians suffering from a mental illness at its meeting on August 20 in Jefferson City.  According to information from Treasurer Zweifel’s office, this plan would not require new spending, it would instead re-allocate $127 million (33 percent) of affordable housing resources for fiscal year 2011 to create housing that addresses mental illness and chronic homelessness issues. Continue reading “Zweifel calls for $127 million housing package for Missourians suffering from mental illness

Leader of $200 Million Real Estate Investment Scam Arrested for Fraud

For Immediate Release
August 12, 2010
United States Attorney’s Office
District of New Jersey
Contact: (973) 645-2888

Alleged Schemes Defrauded Investors in Multiple States and Abroad

NEWARK, NJ—Eliyahu Weinstein, aka “Eli Weinstein,” was arrested at his home this morning by federal agents on charges that he ran an investment fraud scheme causing losses of at least $200 million, U.S. Attorney Paul J. Fishman announced.

Weinstein, 35, of Lakewood, N.J., was charged with one count of bank fraud and one count of wire fraud in connection with the alleged scheme. Vladimir Siforov, 43, of Manalapan, N.J., was also charged with one count of wire fraud in connection with the scheme and remains at large. Weinstein is expected to appear later today before U.S. Magistrate Judge Esther Salas in Newark federal court. Continue reading “Leader of $200 Million Real Estate Investment Scam Arrested for Fraud

Former Mortgage Broker, California Woman Plead Guilty to Mortgage Fraud

Beth Phillips, United States Attorney for the Western District of Missouri, announced today that two more defendants have pleaded guilty in federal court to charges related to mortgage fraud schemes, including a $12.6 million conspiracy that involved 25 upscale residential properties in Lee’s Summit, Missouri and Raymore, Missouri and a property-flipping scheme in Kansas City, Missouri.

Cynthia D. Jordan, 43, of Lee’s Summit, pleaded guilty before U.S. District Judge Howard F. Sachs on Friday, May 21, 2010, to mail fraud and wire fraud. Jordan, who was a mortgage loan broker for various mortgage brokers in the Kansas City area, admitted that she participated in a property flipping scheme. Anahit Nshanian, 30, of Long Beach, California, pleaded guilty before U.S. Magistrate Judge John T. Maughmer on Thursday, May 20, 2010, to her role in the $12.6 million conspiracy.

Jordan and Nshanian are among 18 defendants, all of whom have now pleaded guilty.

Jordan admitted that she was involved in a scheme to flip properties — buying residential properties that could immediately be sold in flip transactions for substantially more than the purchase price, without improvements to the properties. Jordan obtained mortgage loans to purchase the properties by submitting fraudulent documentation and making false representations. Jordan falsely represented that she would occupy the homes as her primary residence. As a result of the scheme, Jordan obtained money from the loan proceeds and directed loan proceeds be paid to others under the guise of false invoices and other false documents.

As part of the scheme, Jordan purchased a Kansas City property for $355,000. At the time she entered the contract, she and co-conspirators planned to sell the property before a mortgage payment was due so that she did not have to make a loan payment. Jordan signed a contract to sell the property for $555,000 five days later, for which she received $17,500. Two co-conspirators, as a result of submitting fraudulent invoices, received a total of $172,974.

Jordan also purchased another Kansas City property for $537,000 that she agreed to sell within six days of her purchase for $775,000. Jordan received $17,173 and two co-conspirators, as a result of submitting fraudulent invoices, received a total of $193,000.

Under the terms of today’s plea agreement, the government and Jordan agree that the sentence imposed should not exceed nine years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

Nshanian admitted that she was involved in a scheme to buy and sell new homes — all of which were built by Jerry R. Emerick, 40, of Raymore — in the Raintree and Belmont Farms subdivisions in Lee’s Summit and the Eagle Glen subdivision in Raymore from February 2005 through May 2007. Buyers purchased the homes at inflated prices, obtaining mortgage loans for more than the actual sale price by providing false information to mortgage lenders, then kept the extra proceeds. Buyers created shell companies for the purpose of receiving those kickbacks from Emerick, with kickbacks of up to $125,000 on each house. Emerick pleaded guilty to his role in the conspiracy and awaits sentencing.

In total during the course of the conspiracy, mortgage lenders approved loans for 25 homes totaling more than $12.6 million. From that total, buyers received approximately $2.3 million without the lenders’ knowledge. Nshanian received approximately $148,614 in kickbacks.

Nshanian purchased two properties in Lee’s Summit as part of the conspiracy. In obtaining mortgage loans, Nshanian made material misrepresentations upon which the lenders relied. Nshanian also admitted that she received money back unbeknownst to the lenders.

Nshanian received a $510,000 loan for one property; after closing, she received an $89,307 kickback, of which co-defendant Jerome Shade Howard, 41, of Anaheim, Calif., received $20,693. Nshanian received a $657,500 loan for another property; after closing, she received a $80,000 kickback and Howard received $25,000.

Under federal statutes, Nshanian is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorneys Linda Parker Marshall and Kathleen D. Mahoney. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.

Champion Bank Closed by the Missouri Division of Finance

Champion Bank, in Creve Coeur, was closed today by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BankLiberty, Liberty, Missouri, to assume all of the deposits of Champion Bank. Continue reading “Champion Bank Closed by the Missouri Division of Finance

CEO of the Duncan Group In St Louis Pleads Guilty in Multi-Million Dollar Ponzi Scheme

The United States Attorney’s Office announced today that Aaron Duncan, the former CEO and owner of The Duncan Group, has pleaded guilty to fraud charges involving a $3.9 million investment scheme.

According to court documents, Duncan represented that The Duncan Group was involved in real estate investments, including buying, rehabilitating, and selling residential real estate. Duncan solicited investors in Missouri and around the United States to participate in his real estate projects through The Duncan Group by making false representations regarding the security of investments and the rates of returns promised. Bank records revealed that Duncan operated The Duncan Group investment program as a Ponzi scheme. Investors who were repaid on their principal investments were paid from funds obtained from other investors, rather than from returns on investments in real estate projects as promised and represented. At no time did Duncan advise investors that their returns, if paid at all, would be paid from other investors’ principal. Typically, Duncan falsely told investors that their principal investments were secured by a specific property. For example, some investors were told that an investor’s name would be placed on a particular deed or that investors were “securitized” by first mortgages on properties.

Bank records show that beginning no later than December 2005, Duncan was experiencing personal financial problems and was often late on his home mortgage payments.

The scheme operated from roughly January 2006 until Duncan advised investors of his intention to declare bankruptcy in October 2008. During the scheme, Duncan received investment principal from more than 50 investors who ultimately lost a total of approximately $3.9 million. Records recovered during the investigation revealed that Duncan only bought approximately 10 properties and that these ten properties lost money in total. Investor money was not used as promised and represented, instead, investor money was routinely used to pay other investors, pay routine expenses of the business, and to pay Duncan’s personal expenses.

Duncan, 33, Defiance, Missouri, pleaded guilty to one felony count of mail fraud and one felony count of money laundering before United States District Judge Carol E. Jackson. Sentencing has been set for July 27, 2010.

“Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money. Investors should be wary that programs promising unbelievable returns on investment should be looked at carefully,” said Toni Weirauch, Special Agent in Charge of IRS Criminal Investigation, St. Louis Field Office.

“Mr. Duncan conned potential investors by promising a high rate of return on real estate and a fast turnaround,” said Michael Kaste, Assistant Special Agent in Charge of the FBI St. Louis Division. “Anytime before investing, people should do their homework and check with agencies like the Secretary of State, the Securities and Exchange Commission, the Better Business Bureau and other court records. But even then, con men will build a 12-foot ladder to climb an 11-foot wall.”

Mail fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000; money laundering carries a maximum penalty of 10 years in prison and/or fines up to $250,000.

This case was investigated by Internal Revenue Service Criminal Investigation, the Postal Inspection Service, the Federal Bureau of Investigation, and the Securities Division of Missouri Secretary of State Robin Carnahan’s Office. Assistant United States Attorney John Bodenhausen is handling the case for the U.S. Attorney’s Office.

Five Indicted in Foreclosure Rescue and Mortgage Fraud Scheme

Scam Involved Lawyers, Mortgage Brokers, and More Than $14.6 Million in Loans

PHILADELPHIA—A 15-count indictment was filed today against five defendants charged in a $14.6 million mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans, announced United States Attorney Michael L. Levy, Special Agent-in-Charge of the FBI Janice K. Fedarcyk, and Pennsylvania Secretary of Banking Steven Kaplan. Charged are Edward G. McCusker and John Alford Bariana, owners of Axxium Mortgage, Inc., McCusker’s wife, Jacqueline, and Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C.

According to the indictment, the defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through various shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.

“Unfortunately, the downturn in the economy has given rise to unscrupulous predators looking to cash in on the misfortune of others,” said Levy. “This sort of fraudulent activity not only preys on desperate homeowners, it weakens our financial institutions, destroys neighborhoods by leaving properties abandoned, and devalues the homes of innocent neighbors. This office will investigate and prosecute those who victimize financially distressed homeowners.”

The indictment alleges that the defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner’s residence to the straw purchaser. Using their company Axxium Mortgage, Edward McCusker and Bariana, along with Jacqueline McCusker obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the straw purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for 10 homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.

Bennett and Doherty participated in the scheme at the front and back end. Doherty solicited and referred distressed homeowners to Edward McCusker and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.

“Governor Rendell and I are pleased when state and federal agencies can cooperate to protect consumers and deter improper and criminal activity,” said Pennsylvania Secretary of Banking Steve Kaplan. “U.S. Attorney Levy’s announcement today helps underscore our respective commitments to consumer protection and the Department of Banking’s ability to bring financial expertise to criminal prosecutions.”

“The type of criminal activity alleged in this indictment is particularly despicable in that it targeted those victims who were the most vulnerable financially and the most desperate for some type of assistance to avoid foreclosure on their properties,” said Special Agent-in-Charge Janice K. Fedarcyk of the Philadelphia Division of the FBI. “It also represents an affront to the millions of hard-working Americans who struggle every day to meet their mortgage obligations and keep their families in their homes. The FBI is committed to aggressively pursuing those who engage in schemes designed to illegally profit from the current economic situation of many of our fellow Americans.”

The defendants are charged with conspiracy to commit mail and wire fraud, mail and wire fraud, and conspiracy to commit money laundering. Doherty is also charged with bankruptcy fraud.

INFORMATION REGARDING THE DEFENDANTS

Department of Justice Press Release

NAME ADDRESS YEAR OF BIRTH
EDWARD G. MCCUSKER New Hope, PA 1964
JEFFREY A. BENNETT Springfield, PA 1966
STEPHEN G. DOHERTY Doylestown, PA 1966
JOHN A. BARIANA Mullica Hill, NJ 1972
JACQUELINE D. MCCUSKER New Hope, PA 1964

Defendants Edward and Jacqueline McCusker, Jeffrey Bennett, and John Bariana face maximum sentences of 240 years’ imprisonment, $3.25 million in fines, three years supervised release, and a $1,200 special assessment. Defendant Stephen Doherty faces a maximum sentence of 385 years’ imprisonment, $4 million in fines, three years supervised release, and a $1,500 special assessment. These are the maximum sentences that may be imposed if the defendants are convicted; the advisory United States Sentencing Guidelines call for a sentence less than the statutory maximum.

The indictment seeks forfeiture of the proceeds of the fraudulent scheme, which is alleged to be approximately $14.6 million.

This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.

New updated info from IRS on Homebuyer Tax Credit

First-Time Homebuyer Credit Extended to April 30, 2010; Some Current Homeowners Now Also Qualify 

IRS TAX Credit InformationWASHINGTON — A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.

The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase. Continue reading “New updated info from IRS on Homebuyer Tax Credit

President of Metropolitan Money Store Sentenced to Over 12 Years in Prison for $37 Million Mortgage Fraud Scheme

FBI Baltimore

Joy Jackson Personally Responsible for Over $16 Million in Losses to Mortgage Lenders; Used Over $800,000 of Fraudulently Obtained Proceeds to Pay for Her Wedding

U.S. District Judge Roger W. Titus sentenced the president of the Metropolitan Money Store, Joy Jackson, age 41, of Fort Washington, Maryland, today to 151 months in prison followed by five years of supervised release for conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Titus also entered a judgement ordering Jackson to pay restitution of $16,880,884.86 and to forfeit three residential properties in Oxon Hill, Capitol Heights and Laurel, Maryland and three vehicles. Continue reading “President of Metropolitan Money Store Sentenced to Over 12 Years in Prison for $37 Million Mortgage Fraud Scheme

Mortgage Fraud Surge Investigation Nets More Than 100 Individuals Throughout Middle District of Florida

Tampa FBI Mortgage FraudDepartment of Justice Press Release

TAMPA—United States Attorney A. Brian Albritton today announced the results of a nine-month-long Mortgage Fraud Surge investigation that has resulted in charges against more than 100 defendants and involves allegations concerning more than $400 million in loans procured by fraud and more than 700 properties. U.S. Attorney Albritton is holding events throughout the district this week to highlight the announcement.

There are currently mortgage fraud-related charges pending against approximately 500 defendants in federal mortgage fraud cases around the nation. The cases concern both mortgage schemes designed to defraud mortgage lenders and “foreclosure rescue schemes” which prey on distressed homeowners. Continue reading “Mortgage Fraud Surge Investigation Nets More Than 100 Individuals Throughout Middle District of Florida