Two Individuals Convicted in Florida in Foreclosure Rescue Scheme
|U.S. Department of Justice August 02, 2012|
WASHINGTON—The Department of Justice today convicted two defendants for their roles in a South Florida mortgage fraud scheme that took advantage of homeowners on the brink of foreclosure and left many without their homes.
Cathy Saffer of Pompano Beach, Florida, and Barrington Coombs, a certified public accountant of Weston, Florida, were convicted today by a jury in West Palm Beach, Florida, on conspiracy and fraud charges in connection with a so-called “foreclosure rescue scheme,” in which the defendants promised to help distressed homeowners but instead swindled them out of the remaining equity in their houses.
The jury convicted Saffer of one count of conspiracy, three counts of mail fraud, and two counts of wire fraud. Coombs was convicted of one count of conspiracy and one count of wire fraud.
Lisa Wright of Pompano Beach, Florida, pleaded guilty to her participation in the same foreclosure rescue scheme in March 2012.
At trial, evidence revealed that Saffer and Wright operated a business called Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. When contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. According to witnesses at trial, Wright and Saffer also claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. Rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.
Witnesses and documents admitted at trial further revealed that Wright and Saffer made numerous misrepresentations on loan applications regarding the straw purchasers’ net worths, incomes, and employment histories in order to induce lenders to fund loans. As part of the scheme, Wright and Saffer paid Coombs to sign a letter which falsely vouched for the fraudulent information on various loan applications.
These sham sales drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.
“Foreclosure rescue schemes victimize Americans in dire straits at risk of losing their most prized possession—the roofs over their heads,” said Acting Assistant Attorney General Stuart Delery of the Justice Department’s Civil Division. “These convictions demonstrate that we will aggressively prosecute individuals who prey on homeowners struggling in these tough financial times.” This investigation is part of the Department of Justice’s continued nationwide focus on mortgage fraud.
USA Wifredo A. Ferrer stated, “These individuals engaged in a foreclosure rescue scheme that defrauded homeowners who were having difficulty making their mortgage payments. Instead of selling the properties as promised, the defendants sold the homes to straw buyers whom they controlled and then allowed the loans to go into foreclosure. As a result, many victims lost their homes. Today’s conviction reaffirms our commitment to prosecuting mortgage fraudsters.”
The case was investigated by the FBI. The case is being prosecuted by Christopher E. Parisi and John Claud, Trial Attorneys at the Civil Division’s Consumer Protection Branch.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.