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Archives June 19, 2005

 


 

June 22, 2005


The former owner of Mortgage Pros in New Jersey is now going to be known as a mortgage con.

Rene Abreu is facing sentencing in Newark federal court for bank fraud, loan fraud, checking kiting and not paying federal income taxes. Along with Mortgage Pros Inc. he also owned Abreu Realty RLA Homes.

The feds say Abreu submitted phony documents to get mortgage loans from several lenders. He had also been charged with trying to extort money from gamblers, but he was not convicted of that offense.

Abreu's lawyer is arguing that Abreu should only be held responsible for $1.9 million in losses suffered by financial institutions. But prosecutors say his schemes resulted in lenders losing more than $2.7 million.

If the higher amount sticks during his court sentencing Abreu will face a longer prison term and a higher amount to repay in restitution.

read story from The New Jersey Journal

read U.S. Department of Justice announcement

read previous coverage from MortgageDaily.com


June 21, 2005


The former owners of an historic Washington state mansion and restaurant are all facing federal charges of fraud -- one for overstating income, the other for understating it.

John and Susan Collins were indicted by a federal grand jury for allegedly inflating their income and assets in the mortgage they applied for when they bought the Moore Mansion in Pasco, Wash., in 2000 for nearly $1.3 million.

The man who sold the 1908 building the couple, Corey Bitton, is accused by the feds of understating the sales of the restaurant and a catering business in order to pay less tax on the business.

And get this -- the building burned in May of 2001. Police ruled the fire was arson but no arrests have been made, the Tri-City Herald of Kennewick reported.

All three of the indicted former owners face up to 20 years in prison and fines of $250,000 on the fraud charges, the paper reported.

The building has a colorful past. It was built by a wealthy hotel owner for his ailing wife and over the years has been a speak easy, hippy hangout, nursing home and a boarding house for migrant workers.

Last year it was purchased by new owners who plan to rent out for banquets, weddings and other events.

read story from the Tri City Herald


A Maryland investment banker has admitted to mortgage fraud and has agreed to pay $215,000 to settle a forfeiture claim with the federal government.

Nathan A. Chapman, 47, a former investment banker, has until Aug. 16 to make the payment. If he does the U.S. District Attorney's office in Baltimore says Chapman can keep his house and they will drop three bank fraud charges against him.

Chapman was sentenced to 90 months in prison in November on charges he fraudulently invested more than $5 million of the state's pension money into eChapman.com, an Internet company he had started. Prosecutors say Chapman used the money to boost the company's IPO in 2000.

Chapman got into trouble with mortgage fraud when he allegedly lied on a mortgage application for a $1.15 million home by claiming money for the house came from stocks he sold.

Actually, according to the Baltimore Business Journal, he used money from a company he controlled but did not disclose the debt to his company on his mortgage application.

read article from the Baltimore Business Journal

read announcement from U.S. Department of Justice


June 20, 2005


A Maryland man who has been accused of fraud and convicted of molesting children is now facing federal charges of videotaping sexual escapades with two boys.

Loren J. Williams, 44, who operated Annapolis Land and Properties, has been arraigned on charges of sexually exploiting minors for the purpose of producing videotapes, according to HometownAnnapolis.com. Williams has pleaded not guilty. If convicted he faces 30 years in prison.

The publication reported that Williams pleaded guilty in April to sexually abusing seven boys. He faces up to 45 months in prison and is scheduled to be sentenced next month.

Williams reportedly was ordered to pay a $250,000 judgment to a couple that he "engaged in a mortgage scam", the Web site reported.

WBAL in Baltimore has reported that Williams has been accused of duping unsuspecting homeowners to sign over their properties to them. In a news story reported last spring Williams' lawyer denied the accusations.

read story from Annapolis's The Capital

read article from WBAL-TV 11


A mortgage broker in Washington State is going to prison for his role in a $20 million scam that involved municipal bonds sold by a sewer district.

John White, 52, was sentenced to 10 months in a federal court in Seattle. The Everett Daily Herald described White as a mortgage broker from Lynnwood, Wash.

White was one of four people sentenced for what U.S. District Judge Robert Lasnik reportedly called an "abomination" in scamming the Holmes Harbor Sewer District.

Real estate developer Terry R. Martin allegedly ran a scheme involving the bogus plan to build a huge commercial office park. In a plea agreement Martin admitted he used phony information to convince the district to borrow the $20 million through a bond sale.

Martin, White and two attorneys allegedly stole $2.5 million from the bond sale for their personal use.

The development was never built and more than 300 investors from 12 states were "swindled", the paper reported.

read story from the Everett Daily Herald

read article from The Seattle Times


The owner of Illinois mortgage brokerage pleaded guilty to on federal charges that she tried to defraud lenders and title companies out of $10 million pleaded guilty Wednesday.

Dorothy Kawa faces 30 years behind bars and a fine and restitution that totals $1 million. The former owner of Northwest Fidelity Mortgage in suburban Chicago was among 11 people indicted in a scam where she admitted to arranging loans for people posing as buyers. Once the loans were approved those involved split up the money, the feds charged.

She is also looking at 20 years in prison and a $250,000 fine and restitution on a money-laundering charge.

According to the Chicago Tribune, others who have pleaded guilty are Zbigniew Recko, Jan Rozycka, Ignacy Kondrad, Waldemar Wilkiewicz, and Julita Uramowska. Charges included wire fraud and money-laundering.

The five remaining defendants go on trial July 18.

read Chicago Tribune story


The crackdown on mortgage fraud in Georgia is continuing with a flurry and a fury.

State and local officials are reportedly cracking down on a scheme in the Gwinnett County, an Atlanta suburb that involved 14 houses and cost lenders nearly $4 million, according .

Two arrests have already been made but authorities expect to nab as many as 20 suspects in five counties before the investigation is over.

The scam apparently worked like this -- houses valued at about $250,000 were being sold for more than $350,000 with those in on the scam allegedly pocketing the difference. Inflated appraisals and other fake documents are often used in flipping schemes, which is what this looks like.

Georgia's legislature passed one of the nation's toughest mortgage fraud laws earlier this year and at least three high-profile fraud rings have been busted since.

read story from the Gwinnett Daily Post


A former top official in Afghanistan's toppled Taliban government who reportedly worked as an FBI informant has pleaded guilty to federal charges of mortgage fraud.

Noorullah Zadran, who the LA Times identified as the former second ranking U.S. diplomat for the Taliban, received a $240,000 mortgage loan by using phony information on his loan application -- he lied about his wife's job status in order to get a lower interest rate, the AP is reporting.

He has also pleaded guilty to no paying federal income taxes and faces eight months in prison.

Zadran was reportedly working against the Taliban government as part of a plea agreement he made with federal prosecutors after being charged with smuggling in 1995. He was placed on a federal terrorist watch list after the 9/11 attacks and was frequently on television defending the Taliban in his role as a diplomat.

Zadran is now working as a real estate agent in Long Island, the paper reported.

read Los Angeles Times story

read story from Reuters

read story from the New York Times


June 16, 2005


A disbarred Georgia lawyer will do 135 days in a county jail for his role in a $1.23 million mortgage fraud case that involves 13 people.

James Avant, 42, of Bibb County, has also paid a $25,000 settlement, the Macon Telegraph is reporting. He pleaded guilty to conspiracy to commit racketeering and has been disbarred, according to the State Bar of Georgia.

Six other people in the fraud case have already been sentenced. The ring used inflated appraisals, phony loan apps and bogus documents to defraud mortgage companies on the sale of 22 properties between June 2000 and May 2004, according to prosecutors.

Tracy Ford Bryant, a loan originator, will be sentenced in June 21. Marcus Malcolm, owner of Agape Properties in Lithonia, Ga., will be sentenced June 30.

Georgia has had mortgage fraud problems; the FBI says it's among the worst in the nation for incidents of fraud. But the authorities, armed with a tough new law, are also cracking down on fraud.

read story from the Macon Telegraph

visit Georgia's State Bar Web site


This entry has been removed.

A love affair between a Tennessee mortgage broker and the owner of a title company bloomed into mortgage fraud and is now ending with the lovers headed off to prison.

Federal prosecutors say Ragip Sinan Mungan, the former operator of Mortgage Masters in West Knoxville, and Mary Catherine Jedlicka, operator of Accent Title, allegedly used fraud to secure loans to pay off mortgages that were never paid off.

Mungan, a Turkish immigrant, used his business to get the loans; Jedlicka used hers to do the title work and closings, according to the Knoxville News Sentinel.

Defense lawyer David Eldridge, who represented Mungan, reportedly said at the couple's sentencing that his clients love for Jedlicka led him astray.

Jedlicka's lawyer reportedly said that Jedlicka was a "needy woman who looked at Mungan as a protector and adviser" and it was him that led her into the scheme.

Either way, both are heading to prison for more than two years in a fraud that cost a Fidelity National Title Insurance, which insured the title work but did not know about the fraud, about $5 million in losses.

read story from the Knoxville News-Sentinel

 
Patrick Crowley is fraud journalist for MortgageDaily.com and a reporter and columnist for The Cincinnati Enquirer.

Email Patrick at: PatCrowley@FraudBlogger.com
 
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