David Saks: Connecticut Man Nets 51 Months in Prison for Mortgage Fraud Scheme

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Connecticut Man Nets 51 Months in Prison for Mortgage Fraud Scheme

 

Waterford Man Sentenced to 51 Months in Prison for Leading Extensive Mortgage Fraud Scheme

U.S. Attorney’s Office December 19, 2013
  • District of Connecticut (203) 821-3700

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that Jose Guzman, 53, of Waterford, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 51 months of imprisonment, followed by three years of supervised release, for operating an extensive mortgage fraud scheme in eastern Connecticut.

According to court documents and statements made in court, Guzman operated a fraudulent mortgage business first with Maurizio Lancia at Royal Financial Services and then later with Stacey Petro at First Source Financial Services. Guzman also owned and operated J.G. Property and Investment Management Company, which was a real estate property management company located in New London. In addition, Guzman, Lancia, and William Athan formed and operated Broad Street Investment Group, which was purportedly a Real Estate Investment Company. Through these companies, Guzman, Lancia, Athan, Petro, and others arranged for individuals (“borrowers”) to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications. The fraudulent information included information regarding the borrowers’ income, assets, employment, and rent history, as well as the borrowers’ intention to make the properties their primary residence. The borrowers, who typically were individuals who had good credit but were of modest means with low levels of income, were compensated for participating in the scheme.

For certain transactions, Guzman and his co-conspirators caused escrow checks to be issued to a contracting company purportedly to pay for work that had been done on the property prior to the closing, when no work had been performed. The checks were converted to cashier’s checks, which were used during the closing as down payments from the borrower.

Through this conspiracy, Guzman and his co-conspirators collected large commissions and fees and kept part of the money advanced by the lenders, which was intended to be used to finance the purchase of the properties but instead was used for the benefit of Guzman, his co-conspirators, and their various companies.

In addition, Guzman and others also falsified closing records that showed that money obtained from the financing would be used to improve the properties. Guzman and his co-conspirators represented to the borrowers that they would properly manage the purchased properties but failed to do so. Instead, they converted the rent money to their own use, rather than use the money to pay the mortgages.

Guzman and his co-conspirators caused more than 200 mortgages to be funded during the period of the conspiracy. As a result of defaults on the mortgages, the lenders suffered losses of more than $9 million.

As part of his sentence, Judge Covello ordered Guzman to pay restitution of approximately $7.8 million.

On September 9, 2008, Guzman pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud. Sixteen other individuals, including Lancia, Athan, and Petro, have pleaded guilty to various charges stemming from this scheme. Lancia and Petro are currently serving prison terms of 27 months and 41 months, respectively. Athan awaits sentencing.

This matter has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and David T. Huang.

source: FBI

http://www.fbi.gov/newhaven/press-releases/2013/waterford-man-sentenced-to-51-months-in-prison-for-leading-extensive-mortgage-fraud-scheme?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=283682

 




David Saks



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Comment balloon 0 commentsDavid Saks • December 20 2013 10:14AM

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