David Saks

The defendant was specifically charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit bank and wire fraud, six counts of wire fraud, seven counts of money laundering, two counts of monetary transactions in criminally derived property, and one count of bank fraud. The indictment combines charges related to Chateau Ridge with those Rothenberger also faces in connection to the Cloud 9 Sky Flats development in Minnetonka. Rothenberger was originally charged in the Cloud 9 case on November 8, 2011.

The most recent indictment alleges that from August 24, 2006, through July 15, 2007, Rothenberger and others conspired to defraud mortgage lenders out of money by finding straw buyers to apply for mortgage loans to purchase units at Chateau Ridge. He and others then allegedly made misrepresentations to the lenders regarding the straw buyers' financial situation, among other things. In some instances, he also reportedly provided straw buyers with funds for down payments, although his actions were never disclosed to the lenders.

Furthermore, Rothenberger allegedly participated in the distribution of mortgage loan proceeds outside of actual property closings, again without informing the lenders. Some of the funds—or kickbacks—distributed in that manner amounted to hidden purchase-price discounts and were allegedly provided to the straw buyers. Kickbacks were also purportedly made to Rothenberger and others involved in the scheme in the form of "facilitator" fees or other bogus charges.

Rothenberger is accused of similar criminal activity in connection with the Cloud 9 Sky Flats condominium development in Minnetonka. That case involves more than 40 "Cloud 9" units. In excess of $4.2 million was reportedly transferred to accounts for the purpose of paying kickbacks and otherwise sharing in the proceeds of the fraud scheme.

If convicted, Rothenberger faces a potential maximum penalty of 30 years for conspiracy to commit bank and wire fraud, 30 years for bank fraud, 20 years for each count of money laundering and wire fraud, ten years for each count of monetary transaction involving criminally derived property, and five years for conspiracy to commit wire fraud. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Christian S. Wilson and Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

source: Mortgage Fraud Blog

The defendant allegedly collected upfront fees and impersonated a mortgage modification company.

The criminal charges come as the result of an investigation by the Attorney General after complaints against the company were filed with Attorney General Schuette's Consumer Protection Division. The investigation revealed that from December 2009 through May 2011 White allegedly operated two companies that were marketed as mortgage modification businesses: Braunstein & Associates and Expert Financial.

It is alleged White offered prospective clients mortgage loan modifications for a fee, with a full money-back guarantee. White allegedly told victims his companies employed expert attorneys who would review their lender files to pre-qualify the homeowner for a mortgage loan modification. White allegedly assured clients his attorneys would file the modification proposals with the homeowner's lender on their behalf. Investigation revealed that White allegedly had no attorneys on staff, and that modification proposals were either incomplete or never actually submitted to the banks.

White allegedly operated Expert Financial from December 2009 through September 2010. During this time, White allegedly victimized more than 300 clients, who lost a total of $700,000. When White learned the Attorney General was investigating his company, it is alleged he closed Expert Financial and opened Braunstein & Associates. From September 2010 through May 2011, Schuette alleges White victimized at least 60 homeowners, who were scammed out of more than $100,000.

White and his company, Braunstein & Associates are each charged with the following:

• One count of Conducting Criminal Enterprises (Racketeering), a felony punishable by up to twenty years in prison;

• Two counts of False Pretenses - $1,000-$20,000, a felony punishable by up to five years in prison and/or three times the value of money or property involved.

White surrendered to Southfield Township Police at 10:30A.M. He is scheduled to be arraigned in Southfield's 46th District Court before Magistrate Cythia Arvant at 1:30P.M. White will next be due in court before Judge Sheila Johnson on May 16th at 1:30PM for a pre-exam conference, and on May 18, 2012, at 8:30A.M. for a preliminary exam.

Citizens who believe they may have been victims of Braunstein & Associates or Expert Financial are encouraged to file complaints with the Attorney General's Office at www.michigan.gov/ag by clicking "File a Complaint."

Attorney General Bill Schuette announced charges.

Schuette reminds Michigan homeowners that citizens do not need to pay to speak with their lender or servicer or to obtain outside assistance with foreclosure issues. Free local assistance with foreclosure issues can be found by calling the Michigan State Housing Development Authority at (866) 946-7432.

A criminal chargeis merely an accusation and the defendant is presumed innocent until proven guilty.

"Foreclosure rescue scam artists attack Michigan homeowners who are struggling financially and fighting to stay in their homes," said Schuette. "Instead of helping families stay above water, these criminals push them back under. We are working hard to dismantle these predatory operations and connect victims with free foreclosure assistance."

"I encourage homeowners with foreclosure concerns to contact free, state-certified housing counselors," said Schuette. "You do not have to pay for assistance or to speak with your lender."

source: Mortgage Fraud Blog

The defendants have been charged with bank fraud and conspiracy to commit bank and wire fraud in connection with a straw buyer scheme.

According to the indictment, the defendants participated in a conspiracy to purchase 21 homes in Cleveland and East Cleveland, Ohio, by procuring mortgage loans by fraudulent means. The defendants obtained in excess of $1.8 million from lenders, including Agent Mortgage Company, LLC, New Century Mortgage Corporation, and Long Beach Mortgage Company, to secure financing for the purchases.

From February 2005 through May 2007, Ronald Burrell is accused of buying the homes through one of his companies, Ohio Housing Network, making little or no improvements to the properties before flipping them to straw buyers/investors at an inflated purchase price.

Defendants are presumed innocent until proven guilty.

source: Mortgage Fraud Blog

The three defendants were indicted for allegedly participating in a scheme to fraudulently attempt to obtain mortgage loans totaling more than $750,000 by selling three residential properties in Chicago to nominee buyers.

The charges result from Operation Madhouse, an undercover investigation in which a cooperating individual posed as someone who could assist in structuring fraudulent loan transactions through a bank contact who would approve bogus loan applications on behalf of nominee buyers.

Fort was charged with three counts of bank fraud, and Demos and Olson were each charged with two counts of bank fraud in an indictment returned by a federal grand jury and now unsealed following Demos' arrest.

According to the indictment, the fraud scheme involved a "double-closing" on a residence located at 5517 South Paulina St. and the sale of residences located at 6845 South Morgan St., Chicago, Illinois, and 1241 North Monitor Ave., Chicago, Illinois, between June and September 2010.

The defendants and others allegedly fraudulently attempted to obtain loans by preparing and submitting to an unnamed bank applications in the names of nominee buyers that contained false information about the borrower's employment, income, assets, down payment, intention to occupy the residence, and the value of the property.

Regarding the Paulina "double-closing," the defendants and the undercover cooperating individual allegedly agreed that Fort would "short sell" the residence to a nominee intermediate party, who would immediately resell the property to a nominee buyer, with the second sale financed by a fraudulently-obtained $295,850 loan. Fort allegedly hid information from the short sale lender, including that Fort had arranged for an immediate resale to a nominee buyer at a price significantly higher than the short sale price and based on an inflated appraisal and that he would profit from the resale.

The Morgan Street property was to be sold to a nominee buyer financed by a fraudulently-obtained $300,600 loanand the Monitor Avenue sale by Fort to a nominee buyer financed by a fraudulently-obtained $203,700 loan, the indictment alleges. As part of the scheme, Fort would pay a fee to the nominee buyers of the Paulina and Monitor properties, it adds.

In exchange, the nominee buyers would obtain the loans and sign the documents at closings but would not occupy the residences or make payments on the loans. Fort allegedly intended to keep the proceeds of the fraudulently-obtained mortgages.

Demos allegedly provided the bank with false appraisals that inflated the value of the Paulina and Morgan properties. Olson allegedly provided the down payment funds for the nominee buyer of the Morgan property, and agreed to provide the down payment and short sale funds for the Paulina property. In September 2010, Fort and others appeared at the closings for the sale of Paulina and Morgan properties, allegedly intending to receive approximately $596,450 in fraudulently-obtained loan proceeds. Together with the Monitor property, the defendants allegedly intended to fraudulently obtain mortgages totaling more than $750,000.

The government is being represented by Assistant U.S. Attorneys Tyler Murray and Christopher Stetler.

Each count of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. If convicted, the court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The arrest and charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of investigation; Barry McLaughlin, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago; and Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

The charges are part of a continuing effort to investigate and prosecute mortgage fraud in northern Illinois and nationwide under the umbrella of the interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.

Since 2008, approximately 200 defendants have been charged in Federal Court in Chicago and Rockford with engaging in various mortgage fraud schemes involving more than 1,000 properties and more than $280 million in potential losses, signifying the high priority that federal law enforcement officials give mortgage fraud in an effort to deter others from engaging in crimes relating to residential and commercial real estate.

The Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.

source: Mortgage Fraud Blog

The Government's lawsuit, filed May 3, 2011, sought damages and civil penalties under the False Claims Act for repeated false certifications to HUD in connection with the residential mortgage origination practices of MortgageIt, a wholly-owned subsidiary of Deutsche Bank since 2007.

The suit alleges approximately a decade of misconduct in connection with MortgageIt's participation in the Federal Housing Administration's ("FHA's") Direct Endorsement Lender Program ("DEL program"), which delegates authority to participating private lenders to endorse mortgages for FHA insurance. Among other things, the suit accused the defendants of having submitted false certifications to HUD, including false certifications that MortgageIt was originating mortgages in compliance with HUD rules when in fact it was not.

In the settlement, MortgageIt and Deutsche Bankadmitted, acknowledged, and accepted responsibility for certain conduct alleged in the Complaint, including that, contrary to the representations in MortgageIt's annual certifications, MortgageIt did not conform to all applicable HUD-FHA regulations. MortgageIt also admitted that it submitted certifications to HUD stating that certain loans were eligible for FHA mortgage insurance when in fact they were not; that FHA insured certain loans endorsed by MortgageItthat were not eligible for FHA mortgage insurance; and that HUD consequently incurred losses when some of those MortgageIt loans defaulted.

The defendants also agreed to pay $202.3 million to the United States to resolve the Government's claims for damages and penalties under the False Claims Act. The settlement was approved by United States District Judge Lewis Kaplan.

Preet Bharara, the United States Attorney for the Southern District of New York, Stuart F. Delery, the Acting Assistant Attorney General for the Civil Division of the U.S. Department of Justice, Helen Kanovsky, General Counsel of the U.S. Department of Housing and Urban Development ("HUD"), and David A. Montoya, Inspector General of HUD, announced the settlement.

source: Mortgage Fraud Blog

Rodriguez pled guilty to conspiracy to commit mail fraud, wire fraud, and financial institution fraud, in violation of Title 18, United States Code, Section 1349, and conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h).

Over the last five years, more than thirty defendants have been prosecuted for mortgage fraud schemes in the Versailles, Florida, neighborhood. Most recently, in addition to Rodriguez, eight other individuals have pled guilty and been sentenced in four related mortgage fraud schemes that were centered in Versailles. They are:

Defendant David Lam, 42, Parkland, Florida, a real estate agent, pled guilty on January 17, 2012 to charges in four separate indictments. More specifically, he pled guilty to four counts of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and three counts of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). In sum, the schemes alleged in the four indictments involved more than $15 million in mortgage loans on 12 Versailles properties, and more than $5 million in fraudulent loan proceeds. Lam was sentenced on April 20, 2012 by U.S. District Judge Kenneth A. Marra to 42 months in prison, to be followed by 2 years of supervised release. The Court also ordered Lam to pay $7,117,000 in restitution.

Defendant Pamela Higgins, a mortgage broker who lived in Arizona at the time of the offense, pled guilty on November 4, 2011 to one count of conspiracy to commit mail fraud, wire fraud, and financial institution fraud, in violation of Title 18, United States Code Section 1349, and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code Section 1956(h). Higgins was sentenced by U.S. District Judge Kenneth A. Marra on February 10, 2012 to 36 months in prison, to be followed by 2 years of supervised release. Higgins was ordered to pay $2,141,536 in restitution.

Defendant Carl Alexander, 45, Parkland, Florida, pled guilty on October 5, 2011 to one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). He was sentenced on January 6, 2012 by U.S. District Judge Kenneth A. Marra to 48 months in prison, to be followed by 3 years of supervised release. The Court also ordered Alexander to pay $3,576,724 in restitution.

Defendant Carol Asbury, 59, Lake Worth, Florida, an attorney and title agent in  pled guilty on September 9, 2011 to two counts of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and two counts of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). Asbury was charged and pled guilty to charges in two indictments, both of which alleged mortgage fraud in the Versailles development. Asbury was sentenced on November 18, 2011 by U.S. District Judge Kenneth A. Marra to 30 months in prison, to be followed by 3 years of supervised release. She was also ordered to pay $6,510,291 in restitution.

Defendant Patrick Brinson, 34, Miami, Florida, pled guilty on September 7, 2011 to two counts of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h). Brinson pled guilty to charges in two indictments, one of which alleged mortgage fraud in Versailles and one of which alleged a separate mortgage fraud scheme in Miami. Brinson was sentenced on November 29, 2011 by U.S. District Judge Patricia A. Seitz to 78 months in prison, to be followed by 3 years of supervised release. He was also ordered to pay $1,602,250 in restitution.

Defendant Victoria Wilson, 30, Hollywood, Florida, a mortgage broker, pled guilty on August 19, 2011 to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349. Wilson was sentenced on November 30, 2011 by U.S. District Judge Kenneth A. Marra to 24 months in prison, to be followed by 2 years of supervised release. Wilson was ordered to pay $1,655,466 in restitution.

Defendant David Charles Miller, Jr., 44, Miramar, Florida, pled guilty on February 3, 2012 to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349. Miller was sentenced on April 20, 2012 by U.S. District Judge Kenneth A. Marra to 27 months in prison, to be followed by 2 years of supervised release. Miller was ordered to pay $1,655,466 in restitution.

Defendant Thomas Thelusma, 41, Biscayne Park, Florida, a Miami firefighter, pled guilty on February 2, 2012 to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349. Thelusma was sentenced on April 20, 2012 by U.S. District Judge Kenneth A. Marra to 18 months in prison, to be followed by 2 years of supervised release. Thelusma was ordered to pay $1,035,000 in restitution.

According to court documents, in all four of the recent Versailles-related indictments, the defendants used "straw buyers" to submit false documentation to various mortgage lenders substantially inflating the purchase price of the properties. As part of the conspiracy, duplicate HUD-1 Settlement Statements were prepared.

One set, listing the real price, was provided to the seller; another set, with the inflated price, was provided to the lender. The difference between the real price and the inflated price was either made to appear as if it were a debt owed to business entities controlled by the defendants and their co-conspirators, or was made to appear as profits to the seller.

The fraudulent loan proceeds were then laundered through multiple accounts to conceal the source and distribution of the money and were ultimately used for the benefit of the defendants and their co-conspirators.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Paula Reid, Special Agent in Charge, U.S. Secret Service, Jeff Atwater, Chief Financial Officer, Florida's Department of Financial Services, Addy M. Villanueva, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), Linda Charity, Interim Commissioner, State of Florida's Office of Financial Regulation, and the Palm Beach County Mortgage Fraud Task Force, announced the guilty plea.

Mr. Ferrer commended the investigative efforts of the FBI, IRS-CID, U.S. Secret Service, Florida's Department of Financial Services and Office of Financial Regulation, FDLE, and the Palm Beach County Mortgage Fraud Task Force. The cases are being prosecuted by Assistant U.S. Attorneys Stephanie Evans, Ellen Cohen, Carolyn Bell and Armando Rosquete.

source: Mortgage Fraud Blog

According to court documents, Baker falsified the sales prices of five homes he developed and sold in Chico, California, in 2007. Baker wrote kickback checks of approximately $30,000 to other conspirators after the close of escrow. The conspirators then used this money to pay buyers for purchasing the homes. None of the kickbacks were disclosed to the mortgage lenders who financed the properties. Altogether, Baker gave $160,000 to his conspirators as kickbacks.

According to court papers, Baker received leniency in his sentence due to frail health and other mitigating factors.

As previously reported by Mortgage Fraud Blog, co-defendants Garret G. Gililland III, Shane Burreson, Niche S. Fortune and others have pleaded guilty to participating in the same scheme. Fortune's sister, Kesha Danine Fortune Haynie, 41, Chico, a loan broker who processed a number of the fraudulent loans, was convicted of mail fraud on March 28, 2012, after a six-day jury trial.

United States Attorney Benjamin B. Wagner announced the sentence.

This case is the product of an extensive, joint investigation by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the Butte County District Attorney's Office. Assistant United States Attorneys Russell L. Carlberg and S. Robert Tice-Raskin are prosecuting the case.

source: Mortgage Fraud Blog

 

On May 10, 2012, United States District Court Judge Paul A. Magnuson sentenced the defendant for orchestrating the scheme, which involved the purchase of approximately 70 residential properties in Florida and Minnesota between December 2006 and April 2007. Prieskorn was sentenced to 72 months in prison on one count of conspiracy to commit wire fraud and one count of engaging in an illegal monetary transaction. Prieskorn was indicted on January 20, 2010, and pleaded guilty on March 23, 2010.

As previously reported by Mortgage Fraud Blog, Prieskorn admitted he and others conspired to obtain mortgage loan proceeds by luring buyers to purchase properties. In return, Prieskorn promised the buyers $5,000 for every property purchased. He also promised to make all mortgage payments and pay all other bills associated with the properties for a specific term, after which, he would sell the properties at no cost to the original buyers or "investors." Prieskorn maintained that the mortgage loans were risk free to their investors, knowing all the while the 20 investors were responsible for the loans. Following the closing of these real estate transactions, many investors defaulted on their mortgage loans and were forced into short sales or foreclosure. Yet, Prieskornadmitted receiving at least $1 million in gross receipts as a result of the scam.

In pleading guilty, Prieskorn also admitted concealing from mortgage lenders that he temporarily deposited funds into the bank accounts of some investors to misrepresent the true financial status of those buyers, thereby inducing lender approval of the mortgage loans. He also concealed from the 20 mortgage lenders that he paid the down payments and closing costs for the investors.

In furtherance of the scheme, Prieskorn transferred money, by wire, into investors' bank accounts and caused the faxing of fraudulent mortgage loan applications to potential mortgage lenders. He also caused lenders to make wire transfers of mortgage loan proceeds on related real estate transactions. Specific to the monetary transaction count, Prieskorn structured financial transactions to conceal that he was the recipient of funds from the fraud. Those transactions included a $225,000 transfer on May 7, 2007.

On February 8, 2011, Judge Magnuson sentenced Prieskorn's co-defendant Richard Matthew Laho, 55, Buffalo, Minnesota, to five years of probation on one count of mail fraud. He was also indicted on January 20, 2010, and pleaded guilty on July 8, 2010.

In his plea agreement, Laho admitted that in March and April of 2007, he took part in the scheme by participating in a real estate purchase in Naples, Florida. In that transaction, the buyer was given $5,000 for purchasing the property and falsely told that all mortgage payments and other bills associated with the property would be paid for him. He also was told that the property eventually would be sold as an investment. Laho admitted misleading the lender into believing, however, that the buyer was intending to be the true owner and resident of the home. The property eventually went into foreclosure, resulting in a loss to the mortgage lender of between $490,000 and $690,000.

"Mortgage fraud creates so much harm to individuals, businesses, and our economy, but today's sentencing is a strong reminder how serious our courts consider this criminal activity," said Kelly R. Jackson, Special Agent in Charge, IRS-Criminal Investigation, (IRS-CID), St. Paul Field Office Field office. "IRS-CID is committed to 'following the money trail' to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice."

This case was the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, the Eagan Police Department, the Minnesota Department of Commerce, the U.S. Secret Service, the Minnesota Financial Crimes Task Force, and the Minnesota Bureau of Criminal Apprehension. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

source: Mortgage Fraud Blog

As previously reported by Mortgage Fraud Blog, beginning in 2005, co-conspirators targeted homeowners and home purchasers to participate in a purported mortgage payment program called the "Dream Homes Program." In exchange for a minimum of $50,000 initial investment and an "administrative fee" of up to $5,000, conspirators promised to make the homeowner's future monthly mortgage payments, and pay off the homeowner's mortgage within five to seven years.

Dream Homes Program representatives explained to investors that the homeowners' initial investments would be used to fund investments in automated teller machines (ATMs), flat screen televisions that would show paid business advertisements and electronic kiosks that sold goods and services. To give investors the impression that the Dream Homes Program was very successful, Metro Dream Homes (MDH) spent hundreds of thousands of dollars making presentations at luxury hotels such as the Washington Plaza Hotel in Washington, D.C., the Marriott Marquis Hotel in New York, New York and the Regent Beverly Wilshire Hotel in Beverly Hills, California.

In February 2006, the Dream Homes Program added a second program called "POS Dream Homes" that offered similar promises of paying off investor mortgages in five to seven years in exchange for an up-front investment of $50,000 or more. Collectively, these programs had offices in Maryland, the District of Columbia, Virginia, North Carolina, New York, Delaware, Florida, Georgia and California.

Nelson was hired in December 2006 at an annual salary of $200,000 to get investor contracts in order, including the creation of investor files. In March 2007, Nelson was named the chief financial officer of POS Dream Homes. At no time did Nelson see any evidence of revenue being generated from investments in ATMs and electronic billboards to pay off the investors' mortgages.

Nelson profited significantly during her time with Metro Dream Homes. For example, in May 2007, to document that she had a certain amount of assets in order to qualify for a home mortgage, Nelson and another conspirator agreed that Nelson would obtain a check from the company for $75,000 marked as an annual bonus. Nelson wrote herself a $75,000 check, drawn on the POS bank account, and deposited the check into her personal account. In fact, Nelson was not entitled to any bonus.

In May 2007, a related Metro Dream Homes company allocated $150,000 to Nelson and her spouse to open "Ambassador Dream Homes," which was supposed to be an affiliate of Metro Dream Homes. "Ambassador Dream Homes" did not commence operations prior to it being assumed by the receiver appointed by the Maryland state courts.

In July 2007, Nelson and a conspirator decided they wanted to purchase new Bentley automobiles costing $200,000 each. In order to qualify for financing, Nelson falsely represented in a vehicle financing application that she had been the chief financial officer of POS Dream Homes for 18 years and that her annual income was $700,000.

In all, during her 20 months of employment with MDH, Nelson received $413,075 in compensation.

On August 15, 2007, the Maryland Securities Commissioner issued a cease-and-desist order to MDH and other related companies directing them to immediately cease the offering and sale of unregistered securities in connection with their promotion of the Dream Homes Program. However, Williams thereafter called meetings in which investors were told that MDH was earning up to $10 million in one month and that the company's legal difficulties were the result of either misunderstandings or racial animus against company leaders. In October 2007, the Circuit Court for Prince George's County, Maryland, granted the Commissioner's motion to freeze MDH assets, and appointed a receiver."

As a result of the scheme, more than 1,000 investors in the Dream Homes Program invested approximately $78 million. When Nelson's co-conspirators stopped making the mortgage payments, the homeowners were left to attempt to make the mortgage payments MDH had promised to make in full.

Nelson is the last defendant to be sentenced in this case. MDH's owner and founder Andrew Hamilton Williams, Jr., 61, Hollywood, Florida; chief financial officer Michael Anthony Hickson, 49, Commack, New York; president Isaac Jerome Smith, 49, Spotsylvania, Virginia; and vice president of operations Alvita Karen Gunn, 34, Hanover, Maryland, were all convicted by a federal jury of fraud conspiracy, wire fraud and/or conspiracy to commit money laundering in connection with their participation in the mortgage fraud scheme. Hickson was also convicted of making a false statement in a federal court proceeding. Judge Titus sentenced Williams to 150 years in prison, Hickson to 10 years in prison, Smith to 70 months in prison and Gunn to 60 months in prison.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Maryland Attorney General Douglas F. Gansler; and Inspector General Jon T. Rymer of the Federal Deposit Insurance Corporation.

"Mortgage fraud is every bit as corrosive to society as street crime," stated Eric Hylton, Acting Special Agent in Charge, IRS-Criminal Investigation, Washington D.C. Field Office. "This type of fraud has far-reaching economic consequences and severely thwarts recovery from the foreclosure crisis, leaving communities with inflated home values and financial institutions with uncollectible loans."

This prosecution is being brought jointly by the Maryland and Washington, D.C. Mortgage Fraud Task Forces, which are comprised of federal, state and local law enforcement agencies in Maryland, Washington, D.C. and Northern Virginia. The Task Forces were formed to promote the early detection, identification, prevention and prosecution of various kinds of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Forces, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and help to ensure the integrity of the mortgage market and other credit markets. Information about mortgage fraud prosecutions is available on the internet at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

United States Attorney Rod J. Rosenstein praised the FBI, the IRS - Criminal Investigation, the Maryland Attorney General's Office - Securities Division and the Federal Deposit Insurance Corporation - Office of Inspector General for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorney Christen A. Sproule, who prosecuted the case.

source: Mortgage Fraud Blog