Miami, Fla. - (July 3, 2008) R. Alexander Acosta, United States Attorney for the Southern District of Florida, Michael K. Fithen, Special Agent in Charge, United States Secret Service (USSS), Michael V. Powell, Special Agent in Charge, U.S. Department of Housing and Urban Development , Office of Inspector General (HUD-OIG), Region IV, Henry Gutierrez, Inspector in Charge, U.S. Postal Inspection Service, and Roger Reinke, Chief, City of Marco Island Police Department, announced today that a jury convicted the remaining six defendants, Jaqueline Perez-Castillo, Yanny Cruz Pavon, Lizabeth Perez, Erick Clavijo, Aurora Ramentol, and Ester Crespo of fraud in the matter of United States v. Juan Torrens, et al, Case No. 07-20987-Cr-Jordan. The six defendants convicted were straw buyers in a mortgage fraud scheme in South Florida that resulted in more than $15,000,000 in fraudulent loans, and losses of more than $5,000,000 to lenders.
With today’s convictions, all 31 of the defendants originally charged have been adjudged guilty. Sentencing for the six defendants is scheduled for October 3, 2008. The defendants face a maximum sentence of 20 years; on each wire fraud count, as well as substantial penalties and restitution.
This case revolves around defendants Juan Torrens, the de facto owner of Amsouth Trust & Investment Corp. (“Amsouth”) and president of Countryside Land & Development, Inc., Rachael Torrens, president of 1st Choice Realty of South Florida, Inc. and de facto owner of First United Mortgage USA Corp., Daniel Ramos, Alfonso A. Muxo, a State of Florida certified real estate appraiser and owner of Palm Bay Real Estate Appraisals, Inc., and Katherine Harris, former president and part owner of Floridian Home Title Corporation, all of whom were charged with conspiracy to commit wire fraud and/or wire fraud for their participation in a massive mortgage fraud scheme. Their scheme involved fraudulent mortgage loans obtained for the purchase of 28 properties located in Miami-Dade and Broward Counties, and in the City of Marco Island. All those charged in the conspiracy pled guilty, and are awaiting sentence.
Also charged in the Indictment were defendants Mario E. Diaz, Aurelio Pozo, Oscar Barreiro, Lellany Rodriguez, Jose Asensi, Carlos Morales, Damaris Jimenez, Lizabeth Perez, Mario Blanco, Rene Rodriguez, Tamaris Angulo, Alicia Loaiza, Ester Crespo, Jesus Enrique Guevara, Janette Lugo, Priscilla Fleitas, Erick Clavijo, Luis DeJesus Planas, Moises Llorens, Milva Roque, Aurora Ramentol, Gladys Lens, Nancy Fundora, Yanny Cruz Pavon, Roger Rosario and Jacqueline Perez-Castillo (“the straw buyer defendants”). These defendants were charged with wire fraud for their participation in this mortgage fraud scheme.
According to the Indictment, plea proffers and evidence at trial, Juan Torrens would identify sellers of residential properties who were willing to overstate the true selling price of their properties. Daniel Ramos and Juan Torrens would then recruit and pay the straw buyer defendants to pose as buyers and ostensibly participate in the purchase of the selected properties. Defendants Rachael Torrens and Juan Torrens would prepare and cause to be prepared on behalf of the straw buyer defendants fraudulent mortgage loan applications. The applications included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2. These fraudulent loan applications would be signed by the straw buyer defendants.
To support the overstated sales prices on the properties and the fraudulent mortgage applications for the straw buyer defendants, defendant Alonso A. Muxo would prepare, for a fee, fraudulent appraisals attesting to the inflated property values dictated by Juan Torrens. Roger Rosario, an employee of Regions Bank, provided, on at least one occasion, a fraudulent verification of deposit in connection with a mortgage loan application for one of the straw buyer defendants.
To effectuate the scheme, defendants Juan Torrens and Rachael Torrens, together with the straw buyer defendants, would create and submit to the banks and lending institutions HUD-Settlement Statement Forms, also known as HUD-1s, which falsely stated that the straw buyers brought their own funds to the closings. In truth, however, the straw buyer defendants brought no such funds to the closing. The straw buyer defendants would allow their identities and credit information to be used in the mortgage loan applications, falsely representing themselves to be the true buyers of the properties and the individuals responsible for the loan.
Once the mortgage applications were approved, the lenders would wire the loan proceeds to the title company, Floridian Home Title, for closing. At closing, Amsouth, a company owned and controlled by Juan Torrens, would receive a credit for the difference between the inflated price and the actual selling price of the property. Defendant Katherine Harris would, for a secret fee, create and submit to the lender a false Settlement Statement form, HUD-1, concealing from the lender the existence of the credit given to the buyer from the seller and that Amsouth was also involved in the transaction. Lastly, defendants Juan and Rachael Torrens would make the payments on the mortgage loans to maintain the loans afloat until the properties could be resold again, often to another straw buyer. When the Torrenses failed to make payments on the loans, some properties went into foreclosure, resulting in substantial losses to the lending institutions.
Mr. Acosta commended the investigative efforts of the U.S. Secret Service, the U.S. Department of Housing and Urban Development - Office of Inspector General, U.S. Postal Inspection Service, and the City of Marco Island Police Department. The case was tried by Assistant U.S. Attorneys Lois foster Steers and Jaime Raich.
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 at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
SOURCE: United States Attorney's Office
Southern District of Florida