Bank Executive Convicted by Federal Jury for Involvement in Mortgage Fraud Scheme
|U.S. Attorney’s Office September 19, 2012|
SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced that a federal jury returned a guilty verdict today convicting Joel Blanford, 44, of San Ramon, on six counts of mail fraud.
This case is the product of an extensive investigation conducted by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case. Former Assistant U.S. Attorney Laurel Rimon also participated in the prosecution.
According to evidence presented at the trial, from approximately April 2003 through October 2005, Blanford, while working as a sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer.
Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage.
The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status, and to turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.
In each of the years 2003, 2004, and 2005, Blanford received, before taxes and payroll deductions, more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.
An earlier trial of Joel Blanford, in May 2012, resulted in a hung jury. The jury verdicts returned today followed a seven-day retrial.
“This verdict reflects the commitment of this office, the FBI and the IRS-CI to follow the facts to wherever they lead us,” said U.S. Attorney Wagner. “We have now convicted seven people, including two bankers, two mortgage brokers, a real estate investor, and two straw purchasers, who participated at different levels of a complex loan origination mortgage fraud scheme involving numerous real estate transactions in the Stockton area.”
Sentencing is scheduled before Judge William B. Shubb on December 10, 2012. The maximum penalties for mail fraud affecting a financial institution is 30 years in prison and a fine of up to $250,000 or twice the value of the gain or loss, whichever is greater.
Six other defendants have been sentenced for crimes arising out of this mortgage fraud scheme. William T. Bridge, 41, of San Francisco, and his brother Paul Bridge were loan brokers who paid illegal kickbacks to a loan coordinator at Long Beach Mortgage between 2003 and 2006. William T. Bridge pleaded guilty to tax evasion charges, admitting that in each of those tax years, he derived more than $10,000 from criminal activity involving fraudulent loans funded by Long Beach Mortgage on houses purchased in Sacramento and Stockton. Paul Bridge pleaded guilty to a violation of the Real Estate Settlement Procedures Act. Both brothers testified at the trial of Joel Blanford.
John Ngo, 27, of Dublin, pleaded guilty to lying under oath before a federal grand jury. Between September 2001 and May 2006, while working as a senior loan coordinator at Long Beach Mortgage, he received in excess of $100,000 in checks and bank transfers from a mortgage broker in order to ensure that fraudulent loan applications were processed and funded. In September 2007, Ngo testified falsely under oath before a federal grand jury investigating the mortgage fraud scheme in the San Joaquin County area that the broker had not given him any money. Ngo also testified at the Blanford trial.
Iftikhar Ahmad, 36; Manpreet Singh, 24; and Jose Serrano, 44, all of Stockton, were indicted on October 25, 2007, for mail fraud in connection with a property flipping scheme involving inflating home values.
Ahmad and Serrano were also charged with money laundering. Between 2003 and 2005, the defendants engaged in a mortgage fraud scheme primarily in the Stockton area. Ahmad, through I & R Investment Properties, fraudulently sold 10 houses to straw buyers, obtaining in excess of $1.5 million. All three pleaded guilty to felony offenses. The mortgage loans on the properties involved in the scheme were arranged by the Bridge brothers, through Long Beach Mortgage.
William Bridge was sentenced in April 2010 to 21 months in prison and was ordered to pay $1,056,700 in restitution. Paul Bridge was sentenced in August 2010 to 36 months of probation. John Ngo was sentenced in September 2010 to nine months in prison. Iftikhar Ahmad was sentenced in February 2011 to 36 months in prison and was ordered to pay $382,750 in restitution. Jose Serrano was sentenced in November 2008 to 15 months in prison and ordered to pay more than $219,000 in restitution. Manpreet Singh was sentenced in February 2009 to 60 months of probation and ordered to pay $163,500 in restitution.