Klary Arcentales Indicted by a Federal Grand Jury For Conspiracy to Commit Bank Fraud and Bank Fraud in an Alleged $2 Million Mortgage Fraud Scheme

May 16, 2013

The Federal Bureau of Investigation (FBI) on May 15, 2013 released the following:

“Bergen County Woman Indicted in $2 Million Mortgage Fraud Scheme

NEWARK, NJ— A Bergen County, New Jersey woman was indicted today for her role in a long-running, large-scale mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.

Klary Arcentales, 44, of Lyndhurst, New Jersey, was charged in a five-count indictment with one count of conspiracy to commit bank fraud and four counts of bank fraud, all of which caused losses of at least $2 million.

According to the indictment and other documents filed in this case:

As early as 2006, Arcentales engaged in a mortgage fraud conspiracy through a company called Premier Mortgage Services (PMS). Arcentales, a loan officer at PMS, provided fraudulent documents to financial institutions in connection with mortgage loan applications on behalf of “straw buyers” to induce those financial institutions to fund mortgage loans. Relying upon those false documents, financial institutions funded mortgage loans. Arcentales then profited illegally by receiving a commission from PMS for each mortgage loan that she closed and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for herself.

Conspirator Lester Soto, 56, previously charged by complaint, was a part-owner of PMS. He also acted as a loan officer on certain PMS mortgage loan applications. Soto took a percentage of PMS’s profits. Soto employed document makers to create fraudulent documents in furtherance of the scheme and put loan officers at PMS, including Arcentales, in contact with these document makers to create other false and fraudulent documents.

Conspirator Linda Cohen, 55, previously charged by Complaint, was a paralegal who closed transactions on behalf of a licensed New Jersey attorney. Cohen served as the settlement agent on mortgage loans brokered by Arcentales for various properties. Cohen convened closings, received funds from lenders, and prepared HUD-1 forms—which itemize services and fees charged to borrowers for mortgage loans—that purported to reflect the sources and destinations of funds for mortgages on subject properties. In fact, the HUD-1s were neither true nor accurate. At or following the closings, Cohen disbursed mortgage loan proceeds directly to PMS, herself, and others, including in amounts not reflected on the HUD-1s. Cohen received a fee for each fraudulent loan in which she participated.

Conspirator Antonio Pimenta, 45, previously charged by complaint, owned and managed Kelmar Construction Co., which built properties that were then sold to straw buyers utilizing fraudulent mortgage loans brokered by Arcentales.

The indictment charges Arcentales with one count of bank fraud conspiracy and four counts of bank fraud, each punishable by a maximum potential penalty of 30 years in prison and a fine of $1,000,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s charges. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit and Zach Intrater of the Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov.

The charges and allegations contained in the indictment and complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.”

Federal Bank Fraud Crimes – 18 U.S.C. 1344

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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

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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.


Deputies sold weapons that ended up with criminals, prosecutors say

June 4, 2012

Los Angeles Times on June 1, 2012 released the following:

“Two Sacramento County sheriff’s deputies were charged Friday by federal prosecutors with illegally selling dozens of weapons, some of which allegedly fell into the hands of criminals.

Deputies Ryan McGowan, 31, and Thomas Lu, 42, both of Elk Grove, face charges of trafficking in handguns that cannot be legally purchased in California, Fox40 in Sacramento reported.

Also charged were firearms dealer Robert Snellings, 61, of Rancho Murieta and Ulysses Simpson Grant Early IV, 36, who is accused of buying guns. Both are from Sacramento.

U.S. Atty. Benjamin Wagoner said the deputies were charged with serving as straw buyers by purchasing the restricted handguns, which peace officers are permitted to buy. They then sold the guns at a profit to unqualified buyers through licensed dealers, prosecutors said.

Gun buyers in California can only buy firearms off an “approved roster,” according to state law. However, peace officers are allowed to purchase certain weapons known as “off-roster” firearms, which are usually high-capacity.

Members of law enforcement can privately sell these “off-roster” guns, as long as the sale is approved by a federal firearms licensee. It’s illegal if their goal is to make money off the sale of these guns through continuous purchase and sale.

The deputies are accused of using their peace officer exemption to buy dozens of weapons over more than a year then selling them to others for a profit.

Investigators said at least two weapons eventually reached criminals, though there is no evidence the deputies had that intent, the Associated Press reported.

Two other police officers, one in Sacramento and the other in nearby Roseville, were implicated in the investigation but have not been charged. Both have since lost their jobs.

The two deputies worked at the department’s Rio Consumes Correction Center in Elk Grove. One deputy resigned and the other is on administrative leave, said Deputy Jason Ramos, a spokesman for the sheriff’s office.”

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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

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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.


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.


James Warren Hoffman and his wife Teresa Gay Hoffman Indicted for Allegedly Orchestrating a $5 Million Mortgage Fraud Scam

October 19, 2011

The Federal Bureau of Investigation (FBI) on October 18, 2011 released the following:

“Minnesota Couple Indicted for Orchestrating $5 Million Mortgage Fraud Scam

MINNEAPOLIS— Earlier today in federal court, a Minnesota couple was indicted in connection with a $5 million mortgage fraud scheme. James Warren Hoffman, age 51, and his wife, Teresa Gay Hoffman, age 52, both of Stillwater, were indicted on one count of conspiracy to commit mortgage fraud through the use of interstate wire and nine counts of mortgage fraud through interstate wire.

The indictment alleges that from August of 2001 through 2009, James Hoffman conspired to defraud mortgage lenders and obtain money from those lenders. Teresa Hoffman began participating in the scheme in August of 2006. The defendants allegedly recruited straw buyers to purchase real estate in both Minnesota and Wisconsin with the proceeds of fraudulent mortgage loans arranged by James Hoffman, and in some instances by both defendants. The defendants owned several entities, which arranged financing for the fraudulent transactions.

From August 2001 through 2008, the couple lived in a Hastings home without ever owning it. James Hoffman arranged for a series of straw purchasers to buy the property entirely with the proceeds of fraudulent loans. From June 2001 through 2008, the couple used a Spicer Lake property as their vacation home without ever owning it by also arranging fraudulent mortgage loans for a series of straw buyers. Starting in June of 2006, the couple, through three of their businesses, purchased apartment buildings in Rochester, Sauk Rapids and Spicer to convert them into condominiums. Then they sold the condos to straw buyers, who paid for them with proceeds of fraudulent mortgage loans arranged by the defendants. In total, the estimated loss to mortgage lenders is approximately $5 million. During the course of the conspiracy, the defendants allegedly received loan proceeds that were wire transferred by the lenders.

If convicted, the defendants face a potential maximum penalty of 20 years in prison on each mortgage fraud count and five years on the conspiracy count. 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 and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant United States Attorney David J. MacLaughlin.

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.”

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

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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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.


House Republicans to Request Special Counsel to Probe Holder on ‘Fast and Furious’

October 4, 2011

Fox News on October 4, 2011 released the following:

“EXCLUSIVE: House Republicans are going to call for a special counsel to determine whether Attorney General Holder perjured himself during his testimony to the House Judiciary Committee on Operation Fast and Furious, Fox News has learned.

House Judiciary Committee Chairman Lamar Smith, R-Texas, is sending a letter to President Obama arguing that Holder cannot investigate himself and will request a probe by a special counsel.

The question is whether Holder committed perjury during a Judiciary Committee hearing in May. At the time, Holder indicated he was not familiar with with the Bureau of Alcohol, Tobacco, Firearms and Explosives program known as Fast and Furious.

However, a newly discovered memo dated July 2010 shows Michael Walther, director of the National Drug Intelligence Center, told Holder that straw buyers in the Fast and Furious operation “are responsible for the purchase of 1,500 firearms that were then supplied to the Mexican drug trafficking cartels.”

In response to the Monday release of that and other documents, the Justice Department said Holder was confused by the question, and that he was answering about when he first learned of the “troubling tactics” of the program, not the name of it.

But House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., told Fox News on Tuesday morning that Holder saying he didn’t understand the question rather than he didn’t know of the program is not a successful defense to perjury.”

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.

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FBI Busts Alleged Mortgage Fraud Ring

August 4, 2011

Fox News on August 4, 2011 released the following:

“10 Charged in $60 Million Mortgage Fraud Scheme

By Jana Winter

The FBI has arrested 10 people for allegedly participating in a $60 million mortgage fraud ring early Thursday morning in the New York area, FoxNews.com has learned.

Three more suspects are expected to be in custody by the end of the day, an FBI official said.

The 13 alleged members of the mortgage fraud ring include real estate attorneys, title closers, appraisers and straw buyers. They were arrested on conspiracy to commit bank fraud and wire fraud charges.

All are expected to appear before a judge in the Southern District federal court on Thursday.

One of the main subjects created numerous mortgage brokerages, including FCE and TAT Mutual Capital. Through these brokerages, the subject allegedly facilitated fraudulent real estate loan transactions throughout the New York metropolitan area.

The scheme involved more than 100 properties in New York and Florida.”

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.

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