David Saks: Dirty Florida Mortgage Corporation President Pleads Guilty

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Dirty Florida Mortgage Corporation President Pleads Guilty

Mortgage Lender Pleads Guilty in

Multi-Million-Dollar Mortgage Fraud Scheme

U.S. Attorney’s Office July 16, 2014
  • Southern District of Florida (313) 226-9100

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew J. Breakspear, Commissioner, Florida Office of Financial Regulation, announce that

Karl Oreste, 56, of Miramar,

pled guilty today before U.S. District Judge Robert N. Scola, Jr., to one count of conspiracy to commit wire fraud affecting a financial institution, in violation of Title 18, United States Code, Section 1349.

Sentencing has been scheduled for November 14, 2014 at 8:30 a.m. At sentencing, Oreste faces a maximum possible statutory sentence of up to 30 years in prison.

According to documents filed with the court and statements made in court during the plea, Oreste, president of KMC Mortgage Corporation of Florida, a mortgage lending business in North Miami Beach, along with co-defendants,

Okechukwu Josiah Odunna, a/k/a “O.J. Odunna,”

Marie Lucie Tondreau, a/k/a “Lucie Tondreau”,

and Kelly Augustin,

operated a multi-million dollar mortgage fraud scheme in Miami-Dade and Broward Counties, between December 2005 and May 2008.

Oreste and Tondreau hosted several radio show programs in the South Florida area which catered to the South Florida Haitian community.

During these programs they advertised the services offered by KMC Mortgage. Oreste and Tondreau recruited and paid some of the listeners who responded to those advertisements, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.

According to statements made in court, Oreste, Odunna and other co-conspirators prepared or caused to be prepared applications on behalf of straw borrowers.

Odunna was an attorney previously licensed to practice law in Florida and president of O.J. Odunna, P.A. and Direct Title and Escrow Services.

These loan applications included false information relating to employment, wages, assets and intent to make the property being purchased a primary residence. The loan applications and documents were submitted by co-conspirators to various mortgage lenders throughout the United States. Once the loan applications were approved, the defendant wired loan funds to O.J. Odunna, P.A., Direct Title or other title companies for closing.

In some instances Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-Settlement Statement Forms, which grossly inflated the true purchase price of the properties. Lenders were not told how the loan proceeds were being disbursed.

At closing, a portion of loan proceeds were disbursed to Oreste through his company, JR Investment and Mortgage Corporation, or other bank accounts controlled by him. A portion was in some instances diverted to accounts controlled by O.J. Odunna, P.A. and Direct Title. Oreste disbursed some of the proceeds that he received to pay recruiters, such as Tondreau and Augustin, and straw borrowers. Oreste also transferred a substantial portion of the funds to the bank account of LTO Investment Corporation’s, a company controlled by Tondreau. Tondreau used funds deposited in LTO Investment Corporation’s bank accounts to make payments on the falsely and fraudulently obtained mortgages in order to maintain the loans, and to conceal and further the fraud. She also used a portion of the funds deposited into LTO Investment Corporation’s bank accounts for her own personal use and benefit.

Over the course of the conspiracy, the defendants

fraudulently obtained loans on approximately 20

properties, for which the lenders have suffered losses

in the amount of approximately

$11,000,000.00.

Mr. Ferrer commended the investigative efforts of the FBI and Florida Office of Financial Regulation. The case is being prosecuted by Assistant U.S. Attorney Lois Foster-Steers.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

http://www.fbi.gov/miami/press-releases/2014/mortgage-lender-pleads-guilty-in-multi-million-dollar-mortgage-fraud-scheme?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=336873




David Saks



Time&Temp Memphis

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Comment balloon 6 commentsDavid Saks • July 16 2014 02:41PM

Comments

David   this is aweful  .. It really upsets me that people cheat and defraud other people on such a large scale

Hannah

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) almost 6 years ago

It's the anomalous nature of the real estate business, Hannah. The key is for real estate pros to stay away from the temptation to commit fraud. If the federal government would start proof reading the loan applications and requiring a thirty day window to investigate the information prior to approving the loans, like they do with concealed weapons permits or perhaps other types of federal application that require background checks, there might be less fraud from real estate swindlers like the one above. There are millions of fraudulent real estate documents out there with little or no oversight. Lenders just seem to simply rely on the information provided. It's revolting.

Crooked lenders are well-known to work with dirty mortgage brokers to commit fraud and take illegal kickbacks while the brokers go to jail and the bankers sip wine from the proceeds of ill-gotten fraudulent gains. I've seen so many real estate fraud reports over the last eleven years it makes me want to puke.

And what's worse, the federal government is just now busting those creeps 9 years after they began their filthy con game.

Posted by David Saks ((retired)) almost 6 years ago

Glad to hear these guys were caught and successfully prosecuted.  There are many more to come, unfortunately.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 6 years ago

I agree, Gabe.

Posted by David Saks ((retired)) almost 6 years ago

David:

It is sad to hear of this, even knowing it is happening.  Maybe, must maybe, it will have an impact and stop someone else from doing the same.

Posted by Bob Force (REALTOR®), The FORCE in Maryland Real Estate (Weichert - McKenna & Vane) almost 6 years ago

I sure hope so, Bob.

Posted by David Saks ((retired)) almost 6 years ago

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