BY ELAINE SILVESTRINI
MEDIA GENERAL NEWS SERVICE
During the last week alone, cases were filed in U.S. District Court in Tampa against at least 11 people accused of lying to lenders and property appraisers to obtain millions in mortgage loans during the property boom that ended last year.
Over the past nine months, authorities say, a surge in mortgage fraud investigations has led to charges against more than 100 defendants accused of fraudulently getting about $400 million on at least 700 properties throughout the Middle District of Florida.
Thirty of the defendants were charged in Tampa.
The defendants include mortgage brokers, straw buyers and an unemployed day trader, who authorities say managed to obtain two mortgages despite the fact that he had no income.
Acting U.S. Attorney Brian Albritton held a series of news conferences in the Middle District of Florida to update the public about mortgage fraud prosecutions.
The surge, which began in January and ended last week, is the first phase of a plan to investigate and prosecute individuals and institutions involved in mortgage fraud.
Among the recent cases outlined in court documents:
Jason Anthony Martinez, a licensed mortgage broker, has agreed to plead guilty to conspiring to commit wire fraud and mail fraud affecting a financial institution.
According to his plea agreement, Martinez lied in order to induce lenders to provide $4 million in mortgages from 2005 to 2007.
Martinez and his coconspirators obtained mortgage loans on at least 21 properties, resulting in losses of $1 million to $2 million to the financial institutions.
One of the properties, at 3118 E. 33rd Ave., was purchased for $31,000 in July 2005 through the Teacher Next Door program.
The federal program gives eligible buyers, such as teachers and police officers, up to half the cost of eligible properties if they promise to live in them exclusively for three years.
The property is also not to be sold for more than 110 percent of the net development costs.
But the property was sold to another “complicit straw purchaser” 10 months after the sale for $110,000, netting Martinez $95,000.The straw purchaser’s fraudulently obtained mortgage ultimately ended in foreclosure.
The U.S. Department of Housing and Urban Development lost $15,500 as a result of the fraud.
The FBI has requested an arrest warrant for Jorge Socorro, the former corporate manager for the funding department of GreatStone Mortgage, a Tampa-based company that went under following a massive fraud scheme perpetrated by its owners.
Last week, the company’s former president, Corey Brower, was sentenced to five years and three months in federal prison and his wife, Sandi, was sentenced to three years and four months. They were given reduced sentences largely because of their extensive cooperation with federal authorities.
The FBI also sought an arrest warrant for Roy Watson, who is accused of lying about his income to get loans for $560,000 and $140,000 in 2006.
Watson said he made $18,750 a month when it was really $3,600, and also lied that he planned to use the property at 68 Gulfwinds Drive in Palm Harbor as his primary residence.
In 2009, Watson told the FBI that two people approached him in 2006 about an investment opportunity. They said they had a buyer lined up but wanted to use Watson’s name and credit to purchase the house, and agreed to split the profits with him.
Watson said he was paid $10,000 for his participation.
The FBI has asked a judge for an arrest warrant for Beatriz Sanchez, who authorities believe left the United States on a flight to Amsterdam in July.
Sanchez is accused of obtaining five mortgage and home equity loans totaling $670,300 on a property at 3436 Red Rock Drive in Land O’ Lakes that had been purchased for $217,000 in April 2006.
Nelson Bryan Rivera Valentin was charged in a complaint with wire fraud affecting a financial institution, accused of lying on a mortgage application and falsely representing his income.
The complaint states Rivera induced two banks to provide loans worth a total of $900,000 on a property at 5711 Sea Trout Place in Apollo Beach, which was foreclosed on in November 2000 and ultimately sold for about $370,000.
The FBI sought an arrest warrant for Richard Likane, an unemployed day trader who authorities say had no income but managed to obtain two loans totaling more than $300,000.
Likane, 44, of Tampa, faces a charge of mail fraud.
According to court papers, he lied about his monthly income in obtaining a mortgage of $161,000 for 10808 Dragonwood Drive in Tampa in February 2006, a year in which he actually lost $3,000 trading stocks and had no salary or wages.
In March 2007, he obtained a home equity line of credit for $195,000 on a property at 3857 Mariner Drive in St. Petersburg, falsely representing his annual income as $75,000 when it was zero.
In January 2008, Likane filed for bankruptcy and testified under oath that he had not been employed since 2000, and had been a day trader of stocks and a house flipper since then.
The FBI asked for an arrest warrant for Robert W. Bentley, 50, of Tampa, on a charge of mail fraud.
Bentley is accused of falsely representing his monthly income as $13,499 to get a $600,000 mortgage for a house at 3415 Holly Springs Drive in Spring Hill in 2007. At the time, his actual income was $50,000 a year.
He also allegedly lied about his income to obtain two mortgages totaling $650,000 for 3338 Fernando Drive in Hernando Beach.
Lakeisha Gates has agreed to plead guilty to conspiracy to commit bank fraud and wire fraud affecting a financial institution.
In 2007, she worked at a St. Petersburg brokerage firm owned by Gretchen and Eric Scott.
The Scotts approached Gates about a scheme to help them with their financial problems, according to her plea agreement.
Gates would act as the nominee purchaser for two properties owned by the couple, but the Scotts would make the mortgage payments.
The purchase price for the two properties would far exceed the existing mortgage amounts; the conspirators would later sell the houses when their value increased.
On loan documents, Gates was falsely represented as the vice president of a catering company making $5,000 a month. She was paid $10,000 for her participation.
The Scotts obtained loans totaling nearly $300,000 on the properties, which subsequently went into foreclosure. The couple have been indicted on charges of conspiracy to commit bank and wire fraud.
Licensed mortgage broker William Craig Straub has agreed to plead guilty to conspiracy to commit wire fraud affecting a financial institution.
In February 2007, Straub sent an appraiser a contract for 547 Lillian Drive in Madeira Beach stating that the price was $700,000 when the true price was $520,000. As a result, a conspirator obtained a loan for $630,000 and kept $180,000.
A month later, Straub sent an appraiser a contract on 12270 Fourth St. E. in Treasure Island, falsely representing the price at $735,000 when it was $540,000.
That summer, Straub provided an appraiser with a purchase contract for 635 34th Ave. in St. Petersburg, representing the price at $2.35 million when it was $1.4 million. A lender provided $2.11 million to a co-conspirator, who kept $793,480.
Mortgage Fraud Surge Investigation Nets More Than 100 Individuals Throughout Middle Florida Part of the Justice Department's Ongoing Initiative TAMPA, Fla., Nov. 4 /PRNewswire-USNewswire/ -- 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. "This initiative sends a clear message that mortgage fraud will not be tolerated. We must protect the integrity of the real estate market in our communities, which is a major contributor to the health of our economy, here and throughout the country," said U.S. Attorney Albritton. Florida's Mortgage Fraud Surge was launched in late January 2009 in response to the epidemic of mortgage fraud throughout the state, which began during Florida's real estate boom earlier this decade. To address this wide scale problem, the U.S. Attorney's Office for the Middle District of Florida, along with the Federal Bureau of Investigation (FBI) in both its Tampa and Jacksonville Divisions, began a nine-month intensive effort to identify, investigate, and prosecute mortgage fraud in all of its forms. To accomplish the Surge, the FBI and the U.S. Attorney's Office for the Middle District of Florida devoted significant additional personnel and resources to investigating and prosecuting mortgage fraud cases. All of the Assistant U.S. Attorneys in the Ft. Myers, Orlando, and Jacksonville offices responsible for criminal matters handled mortgage fraud investigations, and in the District's largest office, Tampa, over half of the Criminal Division Assistant U.S. Attorneys were assigned mortgage fraud matters. In addition, FBI Special Agent in Charge Steven E. Ibison of the Tampa Division and FBI Special Agent in Charge Jim Casey of the Jacksonville Division established mortgage fraud task forces in their respective jurisdictions. A number of state and federal law enforcement agencies joined these mortgage fraud task forces, and the agents, investigators, and other law enforcement personnel from these participating agencies conducted an intensive and wide-ranging investigation into hundreds of mortgage fraud leads during this Surge phase. Along with the FBI, the agencies that joined in the Surge and who participated in the mortgage fraud task forces are: the Internal Revenue Service-Criminal Investigation, U.S. Secret Service, U.S. Housing and Urban Development Office of Inspector General, U.S. Postal Inspection Service, Florida Department of Law Enforcement, Florida Department of Financial Services/Division of Insurance Fraud, Florida Office of Financial Regulation, Florida Department of Business and Professional Regulation, Lee County Sheriff's Office (Ft. Myers Division only), Collier County Sheriff's Office (Ft. Myers Division only) and Brevard County Sheriff's Office (Orlando Division only). The U.S. Attorney's Office charged mortgage fraud defendants throughout the Middle District of Florida. The number of defendants charged by office breaks down as follows: Ft. Myers-32; Tampa-30; Orlando-19; and Jacksonville-24. Of these defendants, 7 are related to cases under seal and not in the public record at this juncture. An indictment or complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty. The surge investigation completed on October 31, 2009, and the announcement today is the first phase of a continuing effort to investigate and prosecute not only mortgage fraud professionals and other individuals who have engaged in multiple fraudulent mortgage transactions, but also larger organizations and even financial institutions. SOURCE U.S. Department of Justice Steve Cole of the Office of United States Attorney A. Brian Albritton, Middle District of Florida, +1-813-274-6136, fax: +1-813-274-6300
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By AISLING SWIFT
Originally published 02:55 p.m., November 3, 2009 Updated 07:49 p.m., November 3, 2009
NAPLES — A nine-month federal investigation into mortgage fraud has netted 32 defendants — many from Collier and Lee counties — including Realtors, brokers, a bank manager, sellers and buyers, federal officials announced Tuesday.
Throughout Florida’s middle district, which covers 35 counties from Jacksonville to Naples, 105 defendants have been charged in frauds involving more than $400 million in loans and more than 700 properties, U.S. Attorney A. Brian Albritton told reporters gathered at a news conference Tuesday.
“To some extent, this is the tip of the iceberg,” Albritton said, noting that defendants face a maximum of 30 years in a federal prison. “This is only the end of the surge phase, but this is not the end of mortgage fraud prosecutions in Florida.”
The news conference at the U.S. Attorney’s Office in Fort Myers, one held hours later in Tampa, and others occurring today in Orlando and Jacksonville, were tailored to send a message and reveal details of the frauds perpetrated and the prosecutions in U.S. District Court.
The conference also was designed to illustrate how the frauds and swindles affect the economy: banks and lenders are reluctant to loan money, home values are inflated, house values decrease in neighborhoods filled with vacant, foreclosed properties, and banks fail.
“It’s almost a truism that real estate is the life blood of Florida,” Albritton said. “Unfortunately, Florida is ground zero for mortgage fraud. In 2006 and 2007, Florida was ranked number one for mortgage fraud in the nation.”
The Naples and Fort Myers areas were the hardest hit, he said, with 32 defendants charged in federal court in Fort Myers for perpetrating frauds involving 140 properties and loans totaling $25 million; one indictment handed up by a federal grand jury in Fort Myers remains sealed.
Charges include filing a false loan application, bank, wire or mail fraud, swindles, conspiracy, and money laundering.
The investigation has netted people in all walks of life, including a licensed contractor, a title escrow company manager, brokers, accountants, Realtors and their assistants, a mortgage company president, a silent partner in a lending group, buyers of multiple properties, and sellers.
Among those convicted statewide was a Second District Court of Appeals judge, Thomas Stringer, 65, who had already stepped down this year due to allegations he was involved in fraud with a stripper. He pleaded guilty to bank fraud in August, admitting he lied on a 2004 loan application, claiming he hadn’t borrowed money for a down payment, when he obtained cash from someone else. He’d also been accused of fraudulently obtaining a $350,000 mortgage for a Hawaiian home he bought with the stripper.
This month, the state Supreme Court disbarred him for five years due to the conviction.
Three lawyers in Lee County also have been notified about grand jury investigations; they could not be reached for comment. And at least two Cape Coral police officers are being investigated — Detective Steve Petrovich, the chief’s son, and Sgt. James O’Brien, who were placed on administrative duty in September pending the outcome of the investigation, according to a department press release. Records show both were foreclosed on three times.
None have yet been charged, and Albritton declined comment on the law enforcement officers and lawyers being investigated, although he said seven indictments remain sealed in the 35-county district.
Most cases are pending, but of the Collier and Lee defendants, a Fort Myers seller, Patricia Gray, was convicted last month by a federal jury, and three have pleaded guilty, including a multiple borrower from Naples. The rest are pending.
One example of mortgage fraud, Albritton said, involves straw buyers, people whose good credit is used to obtain inflated loans well over a home’s pricetag. Sometimes they’re used to improve the homes, he said, adding, “In other instances, they may leave the property high and dry.”
Some buyers and straw buyers flipped properties, appraisers inflated home values, predatory lenders duped customers into adjustable-rate mortgages that led to the loss of their homes, and subprime borrowers lied about assets.
“This surge is really designed to send a very clear message and that message is this: To those who engage in mortgage fraud, if you lie on your mortgage, or if you lie on your mortgage application, or if you otherwise defraud your mortgage lender, such conduct constitutes a serious, very serious federal offense.
“You will be caught, you will be prosecuted and you will be subject to significant jail terms,” he added.
Albritton was joined by Chief Assistant U.S. Attorney Doug Molloy, who heads the Fort Myers office, Lee County Sheriff Mike Scott, Cmdr. Rod Bishop of the Collier County Sheriff’s Office, and representatives of the IRS’s criminal investigation unit, the U.S. Secret Service, the U.S. Housing and Urban Development (HUD) Office of Inspector General, the U.S. Postal Inspection Service, the Florida Department of Law Enforcement, Florida Department of Financial Services Division of Insurance Fraud, Florida Office of Financial Regulation, and the Florida Department of Business and Professional Regulation.
Blaming “out of control greed,” FBI Special Agent Steven Ibison said the mortgage frauds dwarf the Savings and Loan crisis in the 1980s and 1990s, with $21.4 trillion in losses, compared with the $160 million loss from the S&L crisis. However, he noted, total losses aren’t known because only those banks that are federally insured are required to report them.
Southwest and central Florida banks, he said, reported $213 million in losses, nearly 8 percent of the losses nationally.
“Mortgage fraud hurts the borrowers, the financial institutions and the legitimate home owners,” Ibison said. “Those who knew the risks and intentionally misrepresented these risks to other homeowners and investors will be identified and prosecuted.”
If convicted, buyers face forfeiture of the homes they purchased with ill-gotten gains, while Realtors, mortgage brokers, title agents, and others in the financial industry face loss of their license to work. Convicted lawyers face disbarment, while law enforcement officers can lose their jobs and certifications to work as officers.
Among Collier defendants are:
– Scott Fawcett, 29, an East Naples general contractor, who is charged with fraudulently obtaining $388,000 by lying about his bank account balance.
– Debra L. Landberg, 43, of Naples, a former North Naples Wachovia Bank branch manager accused of helping Fawcett and his wife, Heather, get the $388,000 loan, and helping Scott Fawcett obtain two more totaling $1.88 million, and then lying to FBI agents about verifying their deposits.
– Wayne F. Rice, 55, formerly of Naples, a licensed mortgage broker who worked at Breeze Mortgage in Naples in 2006 and allegedly submitted a bogus mortgage broker application that hid a prior conviction, and providing false information on a loan application.
– Damarys L. Lorca, 38, 1971 16th Ave. S.W., Golden Gate Estates, who is accused of over-inflating the price of homes in mortgage applications and lying about her salary and employer.
– Douglas Lee Carter Sr., 63, of Marco Island, who is charged with mortgage fraud and wire fraud involving shady mortgage deals that defrauded lenders, brokers and buyers out of more than $1 million.
– Ana A. Roque (Anna A. Pagani), 50, a Naples borrower who pleaded guilty to making false statements to a bank by inflating her 2004-2006 earnings by roughly $600,000.
Several attorneys contacted by the Daily News are preparing their defenses, intending to point the finger at others involved in the alleged frauds, including Landberg’s lawyer.
“I think the facts will bear out that she did nothing wrong and was a loyal employee of Wachovia with 22 years of exemplary service,” said John P. Cardillo of Naples, who blamed Fawcett. “I think the charges were mistakenly brought based on testimony of a desperate defendant who is trying to extricate himself from his own wrongdoing and minimize his impending punishment.”
October 26, 2009
FOR IMMEDIATE RELEASE
Jeffrey H. Sloman, Acting United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration, Miami Field Office, and Daniel W. Auer, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, announced that defendant Noel Albanes-Gomez, formerly of Miami, FL, was convicted on Thursday, October 22, 2009, on conspiracy and mail fraud charges for his participation in a mortgage fraud scheme. Sentencing has been scheduled for Friday, January 22, 2010, before the U.S. District Court Judge Jose E. Martinez.
In May 2006, Port St. Lucie Police began an investigation, soon joined by the Drug Enforcement Administration, that led to the discovery of numerous hydroponic marijuana grow houses in St Lucie County, Florida. These marijuana grow houses were established and operated by the Pupo organization. According to the trial evidence, in September 2005, at the behest of Elieser Pupo, defendant Noel Albanes-Gomez purchased a house on Chello Lane, in Port St. Lucie.
Co-defendant Magalys Fajardo, a mortgage broker, testified at trial that she falsified Albanes-Gomez’s mortgage application as part of her agreement with Albanes-Gomez and co-defendant Elieser Pupo. The mortgage application contained materially false information regarding the intended use of the property and Albanes-Gomez’s employment and income. Magalys Fajardo previously pled guilty and was sentenced to 27 months in jail on August 7, 2009.
Another witness, Liban Beritan, testified that he was recruited by Elieser Pupo to maintain the house that would be used to grow and distribute marijuana. This house was converted by Elieser Pupo and his brothers into a hydroponic grow house, equipped with a sophisticated timed watering and lighting system with electric meter diversions. According to Beritan, he was required to sign a lease with Noel Albanes-Gomez. As part of the agreement, Elieser Pupo paid for Beritan’s living expenses and transportation, and supplied and set up the grow house materials (including marijuana plants). As well, Pupo taught Beritan how to care for and harvest the mature marijuana plants. Beritan testified that he was promised $1000 per pound of marijuana harvested.
Noel Albanes-Gomez testified in his own defense, and admitted that he bought the house at the behest of his lifelong friend, Elieser Pupo, because of his good credit and as an investment. He denied knowing the mortgage application was false. He also admitted that all payments were made by Elieser Pupo, including his deposit on the property. During his testimony, he admitted owning a grow house in Miami in November 2005, but denied any knowledge of the marijuana growing in his Port St. Lucie property.
The conspiracy to commit mail fraud and the substantive mail fraud count each carry a statutory maximum penalty of 20 years’ imprisonment.
Mr. Sloman commended the investigative efforts of the Port St. Lucie Police Department, the Drug Enforcement Administration, and the Internal Revenue Service, Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Carmen Lineberger.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida athttp://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Technical comments about this website can be e-mailed to the Webmaster. PLEASE NOTE: The United States Attorney’s Office does not respond to non-technical inquiries made to this website. If you wish to make a request for information, you may contact our office at 305-961-9001, or you may send a written inquiry to the United States Attorney’s Office, Southern District of Florida, 99 NE 4th Street, Miami, Fl. 33132.
