Two Admit Participating in Mortgage Fraud Scheme
Maurizio Lancia, 48, Trumbull, Connecticut, pleaded guilty to one count of wire fraud, and Stacey Petro, also known as Stacey Moises, 37, Branford, Connecticut, pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud for their roles in a southeastern Connecticut mortgage fraud scheme.
According to court documents and statements made in court, Lancia, a licensed attorney and licensed mortgage broker, controlled and operated Royal Financial Services, LLC, and Petro, a licensed mortgage broker, controlled and operated First Source Mortgage Solutions, Inc.
From approximately 2004 to 2007, Lancia, Petro, Jose Guzman, William Athan and others used these and other mortgage brokerage companies, as well as property management and home improvement companies, to arrange for individuals ("borrowers") to purchase real estate, primarily residential housing properties located in New London Country, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers' mortgage loan applications.
The fraudulent information included information regarding income, assets, employment, rent history, as well as the borrowers' intention to make the properties their primary residence.
The borrowers, who typically were individuals who had good credit but were of modest means with low levels of income, were compensated for participating in the scheme.
In 2004, Lancia, Guzman and Athan purchased a property at 349-351 Broad Street, New London, Connecticut, and formed Broad Street Investment Group for the purpose of buying and selling properties. Both Royal Financial Services, LLC and First Source Mortgage Solutions, Inc. operated out of 349-351 Broad Street. Guzman worked as a loan officer at both Royal Financial Services and First Source Mortgage Solutions, arranging for individuals to obtain funding from various mortgage companies to fund mortgages of houses.
Lancia acted as a mortgage broker and closing agent in connection with fraudulent real estate transactions.
Petro acted as a mortgage broker in connection with various fraudulent real estate transactions and, on numerous occasions, alerted co-conspirator Brian Guimond that mortgage lenders would be calling him to verify the borrowers' employment information and income, and also provided instructions to Guimond how to handle the call. As part of the scheme, Guimond had signed employment verification forms falsely representing that borrowers were employed at his company, The Cutting Edge. Cutting Edge bank accounts also were used in connection with the scheme, receiving funds from lenders for purported home improvement work that not been done.
Scheme participants used a portion of the proceeds from the mortgage funding provided by the lenders to pay themselves large commissions, fees, and other monies for their own use and benefit.
According to previously filed court documents, the government believes that more than 200 fraudulent mortgages were funded through this mortgage fraud scheme.
Many of the properties have been foreclosed on and lenders have suffered losses of more than $3.6 million.
Lancia and Petro are scheduled to be sentenced on January 19, 2012, at which time each defendant faces a maximum term of imprisonment of 20 years.
To date, a total of 12 individuals have pleaded guilty to various charges stemming from this scheme. Guzman, Athan and Guimond have pleaded guilty and await sentencing.
David B. Fein, United States Attorney for the District of Connecticut, announced the two guilty pleas entered before Senior United States District Judge Alfred V. Covello in Hartford.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Michael S. McGarry and David T. Huang.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
To report financial fraud crimes, and to learn more about the President's Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
Courtesy Mortgage Fraud Blog