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New York - (May 28, 2009)
LEV L. DASSIN, the Acting United States Attorney for
the Southern District of New York, JOSEPH M. DEMAREST JR., the
Assistant Director-in-Charge of the Federal Bureau of
Investigation's New York Field Division ("FBI"), BRIAN G. PARR,
the Special Agent-in-Charge of the New York Field Office of the
United States Secret Service ("USSS"), JON T. RYMER, the
Inspector General of the Federal Deposit Insurance Corporation
("FDIC-OIG"), and RONALD J. VERROCHIO, the Inspector-in-Charge of
the New York Division of the United States Postal Inspection
Service ("USPIS"), announced today the unsealing of a 15-count
Indictment charging MICAH MEYERS, STEPHEN CAPUTO, DAWN HUGHES,
FNU LNU, a/k/a "Eddie Garcia," JAKOB GEARWAR, BRIAN URRARO,
MICHAEL DIDIO, DANIEL HAMPTON, JENNIFER MOSCHITTA, VICTOR
AVENDANO, ADRIAN AVENDANO, JANET MCGUINNESS, and LIAM LEAVEY in
connection with their roles in a sub-prime mortgage fraud scheme
involving dozens of mortgages, totaling more than $10 million, on
residential properties in Long Island and the New York City area.
According to the Indictment filed in Manhattan federal
court:
From 2005 through 2007, the defendants, many of whom
were employees of the Islip, N.Y., mortgage brokerage firm
Bridgewater Funding, LLC, targeted residential properties,
generally in the $200,000 to $500,000 range, in Long Island and
the New York City area. In some instances, the defendants
targeted properties whose homeowners were facing foreclosure, and
fraudulently convinced them that selling their properties to the
defendants would be a way to pay off their debts and "save" their
homes. In other instances, the defendants identified target
properties they believed could be resold quickly, or "flipped."
To purchase the properties, the defendants, either directly or in
the name of straw purchasers, submitted mortgage loan
applications that contained false information regarding, for
example, the applicant's creditworthiness and intention to live
in the residence. The loans thereby obtained typically exceeded
the actual purchase price of the property, producing a "spread"
from which the defendants profited. Straw purchasers, who were
recruited via payment of substantial fees, promises of investment
profits, and otherwise, were told not to worry about mortgage
payments because the defendants would make the payments for
several months and thereafter repurchase and/or resell the
property. In fact, the defendants often failed to make mortgage
payments, causing certain affected straw buyers to go into
default on their mortgages.
As a result, mortgage lenders were forced either to
foreclose on those properties or to re-purchase the properties
from the straw buyers for less than the face amount of the loan.
This often left the original homeowner (who had been promised
that selling his or her home would be a way to "save" it) facing
eviction. In other instances, the defendants rented the property
to tenants and used the rent and other monies earned from the
scheme to make mortgage payments on behalf of the straw buyers
for a certain period of time before allowing the mortgages to go
into default. In other instances, the defendants made mortgage
payments for several months before "flipping" the property to yet
another straw purchaser -- who fraudulently obtained a new
mortgage with the defendants' assistance, restarting the
fraudulent scheme.
MICAH MEYERS, 30, of East Islip, New York, JAKOB
GEARWAR, 30, of Brightwaters, New York, and FNU LNU, a/k/a "Eddie
Garcia," were loan officers employed by Bridgewater, who
supervised and coordinated the recruitment of straw buyers and
the submission of fraudulent loan applications and other
documents to the lenders.
BRIAN URRARO, 31, of Oakdale, New York, was the office
manager of Bridgewater, who supervised the loan officers and
assisted them in submitting fraudulent loan applications and
other documents to the lenders.
MICHAEL DIDIO, 27, of Bellport, New York, was a loan
processor at Bridgewater, who assisted loan officers in
submitting fraudulent loan applications and other documents to
the lenders. DIDIO also acted as a straw buyer by signing and
submitting fraudulent loan applications and other documents to
lenders in order to obtain home mortgage loans for multiple
properties within a short period of time.
DANIEL HAMPTON, 40, of North Babylon, New York, falsely
verified to mortgage lenders the employment information for
certain straw buyers. HAMPTON also recruited individuals to act
as straw buyers for the fraudulent scheme.
STEPHEN CAPUTO, 54, of East Setauket, New York, and
DAWN HUGHES, 37, of Lindenhurst, New York, acted as the buyers'
attorney, sellers' attorney, and/or settlement attorney for
fraudulent transactions. CAPUTO and HUGHES knowingly assisted in
closing fraudulent mortgage loans and making payments that were
not disclosed to the lenders, in furtherance of the fraudulent
scheme.
VICTOR AVENDANO, 62, of Lindenhurst, New York, ADRIAN
AVENDANO, 30, of Lindenhurst, New York, JENNIFER MOSCHITTA, 26,
of East Islip, New York, JANET MCGUINNESS, 31, of Lindenhurst,
New York, and LIAM LEAVEY, 30, of Lindenhurst, New York, acted as
straw buyers by signing and submitting fraudulent loan
applications and other documents to lenders in order to obtain
home mortgage loans for multiple properties within a short period
of time, among other things.
The defendants are charged in the Indictment with each
of the following counts and face the following potential maximum
penalties, per count:
Count Charge Defendants Potential Penalties
1) Conspiracy to
commit bank
fraud and wire
fraud
MICAH MEYERS,
STEPHEN CAPUTO,
DAWN HUGHES,
FNU LNU,
a/k/a "Eddie Garcia,"
JAKOB GEARWAR,
BRIAN URRARO,
MICHAEL DIDIO,
DANIEL HAMPTON,
JENNIFER MOSCHITTA,
VICTOR AVENDANO,
ADRIAN AVENDANO,
JANET MCGUINNESS,
LIAM LEAVEY
Maximum sentence of 30
years in prison, and
fine of the greater of
$1,000,000, or twice
the gross gain or loss
resulting from the
crime
2) Bank fraud
MICAH MEYERS,
MICHAEL DIDIO,
JENNIFER MOSCHITTA
Maximum sentence of 30
years in prison, and a
fine of the greater of
$1,000,000, or twice
the gross gain or loss
resulting from the
crime
3) Wire fraud
MICAH MEYERS,
STEPHEN CAPUTO,
JANET MCGUINNESS
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
4) Bank fraud
FNU LNU,
a/k/a "Eddie Garcia,"
JENNIFER MOSCHITTA
Maximum sentence of 30
years in prison, and a
fine of the greater of
$1,000,000, or twice
the gross gain or loss
resulting from the
crime
5) Bank fraud
MICAH MEYERS,
JANET MCGUINNESS
Maximum sentence of 30
years in prison, and a
fine of the greater of
$1,000,000, or twice
the gross gain or loss
resulting from the
6) Wire fraud
MICAH MEYERS,
STEPHEN CAPUTO,
DANIEL HAMPTON
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
Count Charge Defendants Potential Penalties
7) Wire fraud
MICAH MEYERS,
LIAM LEAVEY
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
8) Wire fraud
MICAH MEYERS,
LIAM LEAVEY
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime
9) Wire fraud
MICAH MEYERS,
STEPHEN CAPUTO,
DAWN HUGHES,
VICTOR AVENDANO
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
10) Wire fraud
MICAH MEYERS,
MICHAEL DIDIO
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
11) Wire fraud
MICAH MEYERS,
MICHAEL DIDIO,
STEPHEN CAPUTO
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
12) Wire fraud
MICAH MEYERS,
MICHAEL DIDIO,
STEPHEN CAPUTO
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
13) Wire fraud
JAKOB GEARWAR
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
Count Charge Defendants Potential Penalties
14) Wire fraud
JENNIFER MOSCHITTA,
ADRIAN AVENDANO
Maximum sentence of 20
years in prison, and a
fine of the greater of
$250,000, or twice the
gross gain or loss
resulting from the
crime.
15) Bank fraud
MICAH MEYERS,
VICTOR AVENDANO
Maximum sentence of 30
years in prison, and a
fine of the greater of
$1,000,000, or twice
the gross gain or loss
resulting from the
crime.
MICAH MEYERS, STEPHEN CAPUTO, DAWN HUGHES, JAKOB
GEARWAR, BRIAN URRARO, MICHAEL DIDIO, JENNIFER MOSCHITTA, VICTOR
AVENDANO, ADRIAN AVENDANO, LIAM LEAVEY were arrested and JANET
MCGUINNESS and DANIEL HAMPTON surrendered this morning. The
defendants will be presented later today before United States
Magistrate Judge FRANK MAAS in Manhattan federal court. FNU LNU,
a/k/a "Eddie Garcia," remains at large.
This case has been
assigned to United States District Judge DEBORAH A. BATTS.
Mr. DASSIN praised the work of the FBI, USSS, FDIC-OIG,
and USPIS. He also thanked the New York State Banking Department
for their outstanding work in the investigation.
Assistant United States Attorneys MARK D. LANPHER and
JULIAN J. MOORE are in charge of the prosecution.
The charges contained in the Indictment are merely
accusations, and the defendants are presumed innocent unless and
until proven guilty.
SOURCE: United States Department of Justice -- Southern District of New York
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