Man Gets 10 Years for Large-Scale Mortgage Fraud Conspiracy
Michael Staaf, 42, New Brighton, Pennsylvania, has been sentenced by United States District Judge David S. Cercone to 10 years of imprisonment and five years of supervised release on his conviction of conspiracy to commit bank fraud, mail fraud, and wire fraud and money laundering conspiracy.
According to information presented to the court, Staaf operated Beaver Financial Services, which was a mortgage broker business, and several other companies that owned and managed real estate.
The investigation has revealed that Staaf, and several other individuals engaged in a large-scale mortgage fraud and money laundering scheme involving tens of millions of dollars and dozens of mainly commercial properties.
One aspect of the scheme involved the purchase of properties owned by entities that Staaf controlled through an employee. The purchases were financed through loans. In connection with the loan applications, Staaf and others submitted fraudulent information related to the financial position of the borrower/purchaser, fraudulent appraisals that overstated the value of the collateral, and other documents that contained other material misrepresentations.
There were also second loans associated with some of the properties in which Staaf and others refinanced the earlier purchases. Again, in connection with the refinancings, Staaf and others submitted fraudulent loan applications and other fraudulent documents, including appraisals, to the lenders.
The investigation further revealed that, particularly in connection with commercial properties, Staaf engaged in a scheme in which he would "sell" commercial property owned by an entity he controlled to another entity that he controlled at highly elevated prices. The purchases were financed through fraudulent loan applications and through the submission of fraudulent documents, such as tax returns, rent rolls, leases, financial statements, and appraisals. The investigation revealed that Staaf directed the closing agents at U.S. Settlement Services to misdirect funds directed to payoff existing liens on properties to Staaf and in turn Staaf deposited those funds into various entities' bank accounts controlled by Staaf.
The investigation further revealed that Staaf altered invoices directed to one of the entities controlled by Staaf by inflating the cost of the work listed on the original invoices to make it falsely appear as though improvements had been made to the properties serving as collateral for the loans.
In terms of the money laundering, the investigation revealed that Staaf and his co-conspirators used various means to conceal the source and ownership of the illegally obtained money. Basically, nothing was in Staaf's names, but all of the money eventually went to his benefit. He used nominee accounts, shell corporations, and other schemes to conceal his ownership of the proceeds of the fraud and to make if more difficult to track the proceeds of the fraud.
United States Attorney David J. Hickton announced the sentence.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Mortgage Fraud Task Force for the investigation leading to the successful prosecution of Staaf. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service - Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
source: Mortgage Fraud Blog