David Saks: REAL ESTATE DEVELOPER CHARGED IN $2 MILLION MORTGAGE FRAUD SCHEME

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REAL ESTATE DEVELOPER CHARGED IN $2 MILLION MORTGAGE FRAUD SCHEME

Brooklyn Real Estate Developer Charged in $2 Million Mortgage Fraud Scheme

U.S. Attorney’s Office January 15, 2013
  • Eastern District of New York (718) 254-7000
 

Brooklyn-based real estate developer Schelton Assoumou was arrested today on charges of bank fraud and wire fraud for his participation in a multi-year mortgage fraud scheme. The defendant’s initial appearance is scheduled this afternoon before United States Magistrate Judge Robert M. Levy at the U.S. Courthouse at 225 Cadman Plaza East in Brooklyn, New York.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Cary Rubenstein, Special Agent in Charge, United States Department of Housing and Urban Development-Office of Inspector General; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Steve Linick, Federal Housing Finance Agency-Office of Inspector General.

As detailed in the criminal complaint, between approximately June 2008 and June 2012, Assoumou purported to be a real estate developer doing business as the President of Renaissance Development Inc. In that capacity, Assoumou sold homes in Brooklyn as investment properties. Assoumou assured the investors that he would manage the real estate properties on their behalf, including collecting rents and making mortgage payments to lenders. In fact, Assoumou made little more than token efforts to manage the properties and failed to maintain mortgage payments as promised. As a consequence, each of the loans Assoumou procured fell into default. The loss to the lenders described in the complaint was over $2 million. As noted therein, these were not the only fraudulent transactions disclosed during the government’s investigation.

As part of the scheme, Assoumou submitted fraudulent mortgage applications to the lenders. The applications contained various misrepresentations, including falsely inflated information concerning one borrower’s bank balance and false claims that certain borrowers would live at the properties—a requirement for receipt of certain federally insured loans. To further the scheme, Assomou provided to the lenders fraudulent documentation to support the false claims in the mortgage applications.

If convicted of all charges, the defendant faces a maximum sentence of 30 years in prison, restitution, and a fine of up to twice the loss inflicted by the defendant’s conduct.

“As alleged in the complaint, Schelton Assoumou purported to run a real estate development business that invested in the revitalization of the Bedford-Stuyvesant neighborhood in Brooklyn. Instead, his goal was to fleece investors and lending institutions alike, using false promises and fraudulent documents to carry out his scheme. Assoumou engaged in the very type of fraud that contributed to the recent collapse of the housing market,” stated United States Attorney Lynch. “Those who engage in such conduct will be vigorously investigated and prosecuted.”

FBI Special Agent in Charge Venizelos said, “The defendant allegedly deceived both mortgage lenders and borrowers to enrich himself. Profiting from dishonest business doesn’t revitalize the economy, it undermines it.”

Federal Housing Finance Agency Inspector General Linick said, “The complaint alleges a scheme to defraud in which home mortgage lenders, among them Fannie Mae and Freddie Mac, lost millions of dollars as a result of Schelton Assoumou’s activities. My office is committed to prosecuting such fraud schemes to the fullest extent under law.”

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The government’s case is being prosecuted by Assistant United States Attorney Michael Warren.

Defendant:
Shelton Assoumou
Age: 36
Residence: Brooklyn, New York

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 4 commentsDavid Saks • January 16 2013 10:37AM

Comments

The FBI Special Agent could not have said it better.  The law is really going to have to get very tough on these criminals because they hurt the entire lending and real estate industry when they commit fraud.  No sympathy here.

Posted by Donna Yates, Blue Ridge Mountains (BHGRE - Metro Brokers) over 7 years ago

David, I have seen Realtors and Developers get jail time for this stuff but Bankers just get fined, what is wrong with this picture?  

Posted by Steve Mattison, Vietnam Veteran over 7 years ago

As the prosecution stacks up and the perps are sent to prison, the fraud schemes become more and more sophisticated, Donna.

"Undermines it..." could also be expressed as "...victimizes it" by agent Venizelos.

Posted by David Saks ((retired)) over 7 years ago

Angelo Mozilo would be a great person to ask, Steve. Maybe it's the same psychology Gerald Ford had in mind when he pardoned Nixon. Bank of America did get a bargain, but inherited a nightmare.

Posted by David Saks ((retired)) over 7 years ago

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