Twenty South Florida Residents Charged in $40 Million Bank and Mortgage Fraud Scheme

September 29, 2011

The Federal Bureau of Investigation (FBI) on September 29, 2011 released the following:

“MIAMI— Twenty individuals, including numerous licensed real estate industry professionals, have been charged with conspiracy to commit bank fraud and bank fraud in connection with their alleged participation in a $40 million mortgage fraud scheme. According to the indictment, from March 2006 through June 2008, the defendants conspired to submit false loan applications and related documents to multiple banks for the purpose of obtaining approximately $40 million in mortgage loans and home equity lines of credit (HELOC). This resulted in approximately $20 million in losses to the banks.

The indictment was announced today by Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, FBI Miami Field Office; Michael K. Fithen, Special Agent in Charge, U.S. Secret Service (USSS); Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation (FDIC-OIG); and James K. Loftus, Director, Miami-Dade Police Department (MDPD), along with members of the Federal-State Mortgage Fraud Strike Force.

The 25-count indictment charges the following defendants: Alina Rubi, 45, of Miami (mortgage broker); Camilo Garcia, 39, of Miami (mortgage broker and realtor); Sylvia M. Zagales, 48, of Miami Lakes, Fla., (title agent); Ivette Carreno, 34, of Miami (bank manager); Pedro Rubi, 42, of Miami (mortgage broker); Dianelys Garcia, 37, of Miami (mortgage broker and realtor); Luis Pardo Dieguez, 51, of Miami (realtor); Galia Fernandez, Jr., 50, of Miami (mortgage broker and realtor); Sheena Eizmendiz, 36, of Miami; Ivis R. Hernandez, 41, of Miami (realtor); Jose Raul Hernandez, 52, of Miami (realtor); Yovanis Obregon Jimenez, 38, of Key Largo (real estate appraiser); Jose Manuel Pardo, 49, of Miami (realtor); Sandra M. Rodriguez, 50, of Miami, Mayra Martinez Suarez, 46, of Miami (mortgage broker); Laura E. Diaz, 57, of Hialeah, Fla.; Juan R. Prieto, 49, of Miami (realtor); Flavia E. Perez, 52, of Miami (mortgage broker); Jose Antonio Diaz, 75, of Miami, and Johny Hernandez, 25, of Miami (mortgage broker).

The defendants are variously charged with conspiracy to commit bank fraud (count 1); bank fraud (counts 2-21); receipt of gifts for procuring loans (counts 22 and 23); and providing gifts for procuring loans (count 24 and 25). The indictment also seeks the forfeiture of real property and money derived from the fraud. If convicted, the defendants face a maximum statutory penalty of up to 30 years in prison on each count.

U.S. Attorney Ferrer stated, “Even by South Florida fraud standards, today’s prosecution is shocking. Never before have we seen so many real estate and bank industry professionals charged in a single indictment. In addition, the defendants’ $40 million fraud spanned two years and resulted in $20 million in actual losses to the victim banks. Our commitment to stomp out mortgage fraud is unwavering. We will continue to prosecute all those involved in fraud, from straw buyers and sellers, all the way up the chain to corrupt bank officials and mortgage brokers.”

“Combating mortgage fraud continues to be a priority due to the impact of lending and the housing market on the nation’s economy,” said Special Agent in Charge Gillies. “This is a warning to those in the mortgage industry who think they can get away with creating phony documents to line their pockets with stolen loan proceeds. The FBI will continue to work with its federal, state and local law enforcement and regulatory partners to bring the perpetrators of these crimes to justice.”

“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the United States Attorney for the Southern District of Florida and our law enforcement colleagues in announcing these indictments today. We are committed to our partnerships with federal, state, and local law enforcement to address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal misconduct that undermines that integrity will be held accountable,” said Inspector General Rymer.

Miami-Dade Police Director Loftus added, “Though we are pleased with the outcome of this investigation, we recognize that the indictment of this organization is only a small part of a systemic, ongoing criminal enterprise. We will remain vigilant in our pursuit of these offenders.”

As part of the scheme, brother and sister team, Alina Rubi and Camilo Garcia used Ivette Carreno, then a manager at Regions Bank, to obtain approval of nearly 200 fraud-based HELOCs. Alina Rubi, Camilo Garcia and his wife, Dianelys Garcia, and other co-defendants prepared false documents, such as proof of employment, tax returns, and property deeds, to support loan applications that were replete with false statements. Other co-defendants, such as Pedro Rubi, Luis Pardo Dieguez, and Ivis Hernandez, prepared mortgage and HELOC loan applications on behalf of unqualified borrowers and buyers. The loan applications and related documents, which were submitted to lenders, contained numerous false statements regarding the borrowers’ and buyers’ employment, income, deposits, assets, liabilities, and other information necessary for lenders to assess their qualifications to borrow money. Some of the false statements included misrepresentations that the borrowers were doctors, dentists, engineers, or engaged in other high-paying professions, with false yearly incomes, sometimes exceeding $300,000. In many instances, the unqualified buyers lied about property ownership, in that they did not even own the properties for which they received the equity lines of credit. On some occasions, the defendants used the HELOC proceeds to later purchase the very properties for which they had obtained the HELOC loans.

Alina Rubi, Camilo Garcia, Pedro Rubi, Luis Pardo Dieguez, and Galia Fernandez recruited individuals, and paid others to recruit individuals, to fraudulently obtain mortgage and HELOC loans on the properties. Among the individuals recruited to act as unqualified buyers and borrowers were defendants and co-conspirators Sheena Eizmendiz, Yovanis Obregon Jimenez, Jose Manuel Pardo, Sandra M. Rodriguez, Mayra Martinez Suarez, Laura Diaz, Juan Prieto, Flavia Perez, Jose Antonio Diaz, and Johny Hernandez.

To further the fraud scheme, Alina Rubi, Camilo Garcia, and other co-defendants used Silvia Zagales, a title agent, and her company, the Title Services Group, to divide and disburse, among the defendants, millions of dollars in loan proceeds. As part of the closing procedure, Zagales prepared and submitted to lenders documents that falsely stated, among other things, that borrowers supplied their own funds at the closing of the sale transactions; that she had sufficient loan proceeds and cash-to-close funds to cover the disbursements approved by the lender; and that good faith deposits had been provided by borrowers. Zagales and her co-conspirators fraudulently disbursed the loan proceeds to the sellers and others. In some instances, Zagales used the loan proceeds to satisfy the buyers’ cash-to-close obligations, and would often pocket seller proceeds through another company that she owned and operated. In addition, to conceal the fraud and to conduct multiple mortgage loan and HELOC closings with the same properties, Zagales and her co-defendants, in some cases, failed to timely record, and falsely recorded, mortgage deeds and mortgage documentation with State of Florida authorities.

This law enforcement action is sponsored by the Financial Fraud Enforcement Task Force. The interagency Financial Fraud Enforcement Task Force was established 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.

U.S. Attorney Ferrer commended the investigative efforts of the FBI, U.S. Secret Service, the FDIC, and the Miami-Dade Police Department. The case is being prosecuted by Assistant U.S. Attorney Roger Cruz.

An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.”

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.

Bookmark and Share


Gregory Lashon Thomas, Aja D. Crawford, and Ernest Ohenekitiwa McMillan Set for a Federal Criminal Trial Before Honorable Chief U.S. District Judge Sidney A. Fitzwater

July 7, 2011

The U.S. Attorney’s Office Northern District of Texas on July 6, 2011 released the following:

“TRIAL DATE SET IN MULTI-MILLION DOLLAR MORTGAGE FRAUD CASE

Alleged Fraud Involved Approximately $6 Million in Fraudulently Obtained Loan Proceeds

DALLAS — An August 29, 2011, trial date, before Chief U.S. District Judge Sidney A. Fitzwater, has been set for three defendants charged with running a multi-million dollar mortgage fraud scheme in the Dallas area, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Gregory Lashon Thomas, Aja D. Crawford, aka Aja Abercrombie and Ernest Ohenekitiwa McMillan were arrested on conspiracy to commit mail fraud and mail fraud charges outlined in a four-count indictment returned last month. All three pleaded not guilty and have been released on bond.

According to the indictment, Gregory Thomas, 40, of Desoto, Texas, owned and operated Myriad Investments and Investors Source, two real-estate “investment” companies in the Dallas area. Gregory Thomas recruited individuals, including Ernest McMillan, 41, of Dallas, and others to buy residential real estate by telling them that they were purchasing “investment” properties. Thomas further worked with various loan officers, including Aja Crawford, 34, of Irving, Texas, to prepare false loan applications on behalf of the individual purchasers. The loan applications included misrepresentations about the individuals’ monthly income, intention to occupy the property, assets and liabilities. Some loans also included fake documents attempting to justify an individual’s credit-worthiness, such as fake bank records to show that the individual had sufficient money in the bank to qualify for the mortgage

For certain properties involved in the scheme, Thomas provided the down payment at closing. Shortly after closing, Thomas received payment from the seller that wasn’t disclosed on the HUD-1 Settlement Statement. Thomas would then pay the individual purchaser or another recruiter for purchasing the property.

The indictment alleges that from February 2006 through July 2008, Thomas recruited individuals to purchase real estate properties resulting in approximately $6 million in fraudulently obtained proceeds and $2 million in estimated losses.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement 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. For more information about the task force visit: http://www.stopfraud.gov

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy to commit mail fraud count and each of the substantive mail fraud counts carry a maximum statutory sentence of 20 years in prison and a $250,000 fine. Restitution could also be ordered.

The case is being investigated by the FBI. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.”

To find additional federal criminal news, please read The 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.

Bookmark and Share