Jared Mitchell Rothenberger Indicted by a Federal Grand Jury Alleging Charges of Conspiracy to Commit Wire Fraud, Conspiracy to Commit Bank and Wire Fraud, Wire Fraud, Money Laundering, Monetary Transactions in Criminally Derived Property, and Bank Fraud

May 10, 2012

The Federal Bureau of Investigation (FBI) on May 9, 2012 released the following:

“Minneapolis Man Indicted for Mortgage Fraud in Connection with Burnsville Condo Project

MINNEAPOLIS— Earlier today in federal court in St. Paul, a 43-year-old Minneapolis man was indicted with allegedly defrauding mortgage lenders out of millions of dollars in connection with the sale of condominiums at Chateau Ridge in Burnsville. Jared Mitchell Rothenberger was specifically charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit bank and wire fraud, six counts of wire fraud, seven counts of money laundering, two counts of monetary transactions in criminally derived property, and one count of bank fraud. The indictment combines charges related to Chateau Ridge with those Rothenberger also faces in connection to the Cloud 9 Sky Flats development in Minnetonka. Rothenberger was originally charged in the Cloud 9 case on November 8, 2011.

The most recent indictment alleges that from August 24, 2006 through July 15, 2007, Rothenberger and others conspired to defraud mortgage lenders out of money by finding straw buyers to apply for mortgage loans to purchase units at Chateau Ridge. He and others then allegedly made misrepresentations to the lenders regarding the straw buyers’ financial situation, among other things. In some instances, he also reportedly provided straw buyers with funds for down payments, although his actions were never disclosed to the lenders. Furthermore, Rothenberger allegedly participated in the distribution of mortgage loan proceeds outside of actual property closings, again without informing the lenders. Some of the funds—or kickbacks—distributed in that manner amounted to hidden purchase-price discounts and were allegedly provided to the straw buyers. Kickbacks were also purportedly made to Rothenberger and others involved in the scheme in the form of “facilitator” fees or other bogus charges.

Rothenberger is accused of similar criminal activity in connection with the Cloud 9 Sky Flats condominium development in Minnetonka. That case involves more than 40 Cloud 9 units. In excess of $4.2 million was reportedly transferred to accounts for the purpose of paying kickbacks and otherwise sharing in the proceeds of the fraud scheme.

If convicted, Rothenberger faces a potential maximum penalty of 30 years for conspiracy to commit bank and wire fraud, 30 years for bank fraud, 20 years for each count of money laundering and wire fraud, 10 years for each count of monetary transaction involving criminally derived property, and five years for conspiracy to commit wire fraud. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Christian S. Wilson and Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It 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, 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.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.”

US v. Jared Mitchell Rothenberger – Federal Criminal Indictment

18 U.S.C. § 1343

18 U.S.C. § 1344

18 U.S.C. § 1349

18 U.S.C. § 1956

18 U.S.C. § 1957

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Eric Elegado, Charmagne Elegado, Theodore Cohen, Minh Nguyen, Regidor Pacal, Alexander V. Garcia, Roman Macabulos, Ramin Lotfi, and Roderick Huerto Indicted for Allegedly Committing the Following Federal Crimes: Conspiracy, Wire Fraud, Money Laundering, and Criminal Forfeiture

February 23, 2012

The Federal Bureau of Investigation (FBI) on February 21, 2012 released the following:

“Local Real Estate Agent and Eight Other Industry Professionals Charged in Massive Mortgage Fraud Scheme That Caused at Least $15 Million in Losses

United States Attorney Laura E. Duffy announced the unsealing of an indictment today charging a local real estate agent, Eric Elegado, and eight other mortgage industry professionals—Charmagne Elegado, Theodore Cohen, Minh Nguyen, Regidor Pacal, Alexander V. Garcia, Roman Macabulos, Ramin Lotfi, and Roderick Huerto, with multiple counts of conspiracy, wire fraud, money laundering, and criminal forfeiture. According to court proceedings, these defendants engaged in a multi-million-dollar mortgage fraud scheme that targeted vulnerable, low-income immigrants in San Diego. All of the defendants were arraigned today in federal court before U.S. Magistrate Judge William McCurine, Jr.

According to the indictment, Eric Elegado owned and operated real estate and mortgage brokerage businesses in San Diego and employed Theodore Cohen, Minh Nguyen, Regidor Pacal, Alexander V. Garcia, Roman Macabulos, Ramin Lotfi, and Roderick Huerto. These defendants conspired together and with others to obtain mortgage loans for unqualified buyers by falsifying and assisting others in falsifying the employment and salary information on the loan documents. According to the indictment, Eric Elegado directed the mortgage loans to be processed through his wife, Charmagne Elegado, who was working at the subprime mortgage lender. In order to further the fraudulent scheme, the defendants allegedly created and caused others to create false financial records for the purpose of verifying income listed on the false loan applications, such as W-2s, bank statements, rental income statements, ownership records, and bank deposit documents. According to court proceedings, the defendants caused these fraudulent loan documents to be submitted to mortgage lenders in order to induce the lenders to loan more than $50 million in mortgage loans. As a result of their scheme to defraud, defendants and others caused the mortgage companies, lending institutions, and financial institutions to lose more than $15 million.

This case is being investigated by special agents with the Federal Bureau of Investigation. During today’s court proceedings, the government moved to detain Minh Nguyen without bail. A detention hearing is set for February 24, 2012, at 9:30 a.m., before Magistrate Judge William V. Gallo. A personal appearance bond in the amount of $75,000, secured by the signatures of two financially responsible adults, was set for defendant Charmagne Elegado. A bond in the amount of $100,000, secured by real property, was set for defendant Eric Elegado. A personal appearance bond in the amount of $50,000, secured by the signatures of two financially responsible adults, was set for defendants Alexander V. Garcia and Ramin Lotfi. A personal appearance bond in the amount of $35,000, secured by the signatures of two financially responsible adults, was set for defendants Roman Macabulos and Regidor Pacal. A bond in the amount of $50,000, secured by a corporate surety, was set for defendant Theodore Cohen.

The defendants are next scheduled to be in court before United States District Judge Anthony J. Battaglia for a motion hearing on March 28, 2012, at 2:00 p.m.

Criminal Case No. 12CR0404-AJB

DEFENDANTS

Charmagne Elegado Age: 47 Escondido, CA
Eric Elegado Age: 47 Escondido, CA
Theodore Cohen Age: 54 San Diego, CA
Minh Nguyen Age: 28 San Marcos, CA
Regidor Pacal Age: 51 San Diego, CA
Alexander V. Garcia Age: 38 San Diego, CA
Roman Macabulos Age: 38 San Diego, CA
Ramin Lotfi Age: 36 San Diego, CA
Roderick Huerto Age: 34 San Diego, CA

SUMMARY OF CHARGES
Count 1: Title 18, United States Code, Section 1349—Conspiracy to Commit Mail and Wire Fraud
Maximum penalties: 20 years’ imprisonment, $250,000 fine or twice the gross pecuniary gain or twice the gross pecuniary loss (whichever is greatest), $100 special assessment, three years of supervised release.

Counts 2-7: Title 18, United States Code, Section 1343—Wire Fraud
Maximum penalties per count: 20 years’ imprisonment, $250,000 fine or twice the gross pecuniary gain or twice the gross pecuniary loss (whichever is greatest), $100 special assessment, three years of supervised release.

Count 8: Title 18, United States Code, Section 1956(h)—Conspiracy to Commit Money Laundering
Maximum penalties: 10 years’ imprisonment, $250,000 fine, $100 special assessment, three years of supervised release.

Counts 9-12: Title 18, United States Code, Section 1957—Money Laundering
Maximum penalties per count: 10 years’ imprisonment, $250,000 fine, $100 special assessment, three years of supervised release.

INVESTIGATING AGENCY
Federal Bureau of Investigation

An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Henry Fecker, III, and Steven Steiner Indicted by a Federal Grand Jury in a Fifty-Four Count Federal Indictment

August 25, 2011

The U.S. Attorney’s Office Southern District of Florida on August 24, 2011 released the following:

“TWO FT. LAUDERDALE MEN INDICTED FOR MONEY LAUNDERING AND OBSTRUCTION OF JUSTICE IN CONNECTION WITH MUTUAL BENEFITS CORPORATION FRAUD

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced the unsealing of a fifty-four count indictment against defendants Henry Fecker, III, 57, and Steven Steiner, a/k/a “Steven Steinger,”59, for their participation in a scheme to launder and conceal proceeds in connection with the Mutual Benefits Corporation (“MBC”) fraud. More specifically, Fecker and Steiner are charged with receiving more than $10 million into the account of Camden Consulting, a company they controlled, and then hiding and concealing assets from the U.S. Securities and Exchange Commission (“SEC”) and the United States District Court. Both defendants were arrested and appeared in court earlier today. A pre-trial detention hearing is scheduled for Tuesday, August 30, 2011 at 1:30 p.m. before U.S. Magistrate Judge Andrea M. Simonton.

As alleged in the indictment, from approximately 1994 to May 2004, MBC purchased life insurance policies and sold them in fractionalized form to investors. MBC and its employees and agents eventually defrauded approximately 30,000 investors by, among other things, misleading them about the accuracy of life expectancies of the insureds and the expenses required to maintain the insurance policies via premium payments. New investor money was thus used to pay premiums on life insurance policies purchased by earlier investors. As the scheme continued, more investor money was required to prevent the Ponzi-scheme from collapsing. After the MBC business collapsed in 2004, investors eventually suffered more than $830 million in losses.

As charged in the indictment, Steiner was a founder and Vice President of MBC and was paid by MBC using the account of Camden Consulting. Fecker was the owner of Camden Consulting. In this way, the MBC funds were used to support a lavish lifestyle for Steiner and Fecker, who lived together and jointly owned waterfront homes in Ft. Lauderdale and Camden, Maine, and a luxury apartment in New York City.

According to the indictment, in May 2004, MBC was sued by the SEC in the civil action, S.E.C. vs. Mutual Benefits Corp., et al., No. 04-60573-CIV-MORENO (S.D. Fla.) (the “SEC Fraud Action”). The SEC obtained a restraining order to halt the alleged fraud at MBC, and thereafter a receiver was appointed by the United States District Court for the Southern District of Florida (the “MBC Receiver”), to identify and trace the assets of MBC. Steiner was a named defendant in the SEC Fraud Action and Fecker was a party due to his control of Camden Consulting.

According to the indictment, after 2004 when MBC was shut down, Fecker and Steiner engaged in a series of transactions to hide assets from the SEC and the MBC Receiver by placing funds attributable to Steiner with third parties or in Fecker’s name alone, and later by causing third parties to make payments of monies due to Steiner, instead to Fecker. In 2006, for example, Fecker obtained a refinance of the Maine property and placed the proceeds of approximately $480,000 into a series of certified checks to conceal their existence from authorities. Fecker began cashing these checks in 2008 and continued this through July 2011, using the funds to support a lavish lifestyle for Fecker and Steiner.

To obtain a favorable settlement of their liability with the SEC, the indictment alleges that in 2006 and early 2007, Fecker and Steiner submitted a series of false and misleading documents to conceal their true financial condition. Based on this documentation, around April 2007, the SEC agreed to settled their liability for $5 million and further agreed to a reduced penalty of $3.95 million, and the court in the SEC Fraud Action thereafter ordered that these sums be paid by order dated April 10, 2007. The indictment alleges that, to date, Steiner and Fecker have paid only $750,000.

The indictment further alleges in late 2009, to further conceal assets from the SEC and the SEC receiver, Steiner sold the luxury New York apartment for $1.3 million, but caused false documents to state that the sales price was $1.1 million and submitted these documents to the SEC and the MBC Receiver. To further thwart the SEC’s efforts to recover assets attributable to MBC, Steiner allegedly provided false and misleading testimony under oath to the MBC Receiver concerning his assets and financial condition.

Previously, in a separate case also in the Southern District of Florida, Steiner was charged in United States v. Joel Steinger, et al. (Case No. 08-CR-21158), with conspiracy to commit mail and wire fraud and money laundering, in relation to the MBC fraud scheme. Trial in that matter is scheduled for February 2013 before U.S. District Judge Adalberto Jordan.

United States Attorney Wifredo A. Ferrer stated, “Ponzi-schemes, like the MBC investment scheme, defraud unwitting investors out of their lives savings. These defendants compounded their legal troubles by then laundering the proceeds of the fraud and attempting to hide assets. Such abuse will not be tolerated.”

“We will vigorously investigate and prosecute individuals who obstruct justice by making false statements and concealing assets from an agency of the United States attempting to carry out its mission, such as the SEC’s efforts to protect investors here,” said FBI Special Agent in Charge John V. Gillies.

“We will hold accountable those who engage in the laundering of funds derived from fraud, particularly through concealment and spending of funds through sophisticated transactions, like the ones employed here,” said IRS Special Agent in Charge José A. Gonzalez.

Mr. Ferrer commended the investigative efforts of the FBI and the IRS-CID, and the Miami Regional Office of the SEC, which previously brought a civil action against MBC and its principals. The matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.

An indictment is only a charging document, and a defendant is presumed innocent unless and until proven guilty.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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