Couple Sentenced for Mortgage Fraud Crimes
Paulo Montenegro, 45, and his wife, Rosana Pereira, 48, Weston, Massachusetts, have been sentenced in connection with fraudulently obtaining tens of thousands of dollars in Section 8 public housing subsidies and defrauding mortgage lenders.
Pereira and Montenegro misrepresented material information to the Cambridge Housing Authority and HUD in order to obtain the benefit of Section 8 public housing subsidies. Pereira, in conspiracy with Montenegro, under-reported her income and assets, and reported that she was unmarried, when in fact she was married to Montenegro, and they lived together, shared finances, and benefited from each other’s incomes. As a result of such misrepresentations, Pereira and Montenegro received the benefit of renting a three bedroom apartment in Cambridge, Massachusetts at a greatly reduced rate, while the Cambridge Housing Authority and HUD covered most of the rent. For two years during the period when Pereira and Montenegro fraudulently benefited from Section 8 public housing subsidies, they were not even living in the Cambridge, Massachusettes apartment that they were renting at a reduced rate; instead, they were living in a home in Weston, Massachusetts that Montenegro had purchased for $860,000. During the period of the fraud, Montenegro listed the address of the apartment in Cambridge, Massachusettes that he and Pereira rented in Pereira’s name with the Secretary of the Commonwealth as the address of Montenegro’s business.
When Pereira misrepresented to the Cambridge Housing Authority that she had minimal income, she, with Montenegro, also represented to financial lending institutions that she earned at least $12,000 monthly in order to obtain hundreds of thousands of dollars in mortgage loans to purchase properties in Somerville and Medford, Massachusetts.
The couple profited from the purchase and sale of properties to and from each other. Pereira, working with Montenegro, misrepresented in two separate transactions that she was purchasing the properties as her primary residences, claimed that she was unmarried, and failed to disclose any connection with Montenegro, who was the owner of each property. The lenders relied on these and other material misrepresentations to loan 100% of the purchase price to Pereira to finance the purchases of the properties, and unbeknownst to the lenders, Montenegro and Pereira shared the profits.
Despite the profits that Pereira and Montenegro fraudulently collected from these transactions, Pereira, in conspiracy with Montenegro, made just a minimal number of mortgage payments on one of the properties, and none on the other, instead allowing the properties to quickly fall into foreclosure, while Pereira never moved into the properties.
After the pleas were entered, Judge Maureen Hogan sentenced Montenegro and Pereira to two years in the House of Correction, sentence suspended for four years, and ordered Montenegro and Pereira to pay restitution and $25,000 each in fines.
Attorney General Martha Coakley made the announcement.
This case was prosecuted by Assistant Attorney General Brendan O’Shea of AG Coakley’s Insurance and Unemployment Fraud Division with the assistance of the U.S. Department of Housing and Urban Development, Office of Inspector General.
source: Mortgage Fraud Blog