Nevada Mortgage Fraud Task Force Announces Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters
|U.S. Attorney’s Office June 17, 2010|
LAS VEGAS—Following an announcement today by Attorney General Eric Holder in Washington, D.C., representatives of the Southern Nevada Mortgage Fraud Task Force in Las Vegas, including U.S. Attorney Daniel G. Bogden and FBI Special Agent-in-Charge Kevin Favreau, announced the regional results of the nationwide takedown "Operation Stolen Dreams," which targeted mortgage fraudsters in Nevada and throughout the country and is the largest collective enforcement effort ever brought to bear in confronting mortgage fraud.
The sweep was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on March 1 to date, Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions which have resulted in the recovery of more than $147 million.
In southern Nevada, 123 defendants were charged, convicted, or sentenced during Operation Stolen Dreams. These defendants allegedly engaged in hundreds of straw buyer transactions involving hundreds of local properties with a gross total loss of over $246 million ($246,783,272). The majority (73) of these 123 defendants worked in the local real estate industry, and include 30 loan officers, 24 real estate agents, six loan processors, five settlement agents, four mortgage brokers, two appraisers, and one builder. The evidence gathered against these defendants stemmed from 25 criminal investigations conducted by the Southern Nevada Mortgage Fraud Task Force. The task force has additional pending criminal mortgage fraud investigations and it will be vigorously investigating these cases throughout the coming months.
“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”
"Operation Stolen Dreams has been a coordinated, focused initiative to attack mortgage fraud and prosecute its perpetrators,” said U.S. Attorney Bogden. “Although we have some of the highest initiative numbers in the nation—which highlights our extraordinary law enforcement efforts—it also points out the extent of the problem in Nevada. From an investigatory and prosecutorial standpoint, Operation Stolen Dreams is a good start, but by no means does this mark the completion of our efforts in Nevada. The Southern Nevada Mortgage Fraud Task Force will continue to aggressively investigate and prosecute these mortgage fraudsters.”
“The number of arrests and prosecutions arising from Operation Stolen Dreams in southern Nevada are indicative of the extremely high level of fraud and graft that existed in our local real estate industry over the past six years,” said Kevin Favreau, Special Agent in Charge, FBI – Las Vegas. “Everyone in our community has been affected by these crimes. Thanks to the hard work and dedication of dozens of law enforcement officers and prosecutors here in southern Nevada, the persons who perpetrated these crimes will face justice.”
Agencies which participated in Operation Stolen Dreams in Nevada include the FBI, HUD Office of the Inspector General, the U.S. Postal Inspection Service, the U.S. Secret Service, IRS Criminal Investigation, and the Las Vegas Metropolitan Police Department. Persons who have information concerning potential mortgage fraud in Nevada may contact the Southern Nevada Mortgage Fraud Hotline at (702) 584-5555.
Operation Stolen Dreams cases in the District of Nevada included:
USA v. Michael Capodici, et al.
Case No. 2:10-cr-281
On June 16, 2010, Michael Capodici, Linda Marie Kot, Jeffrey Palladino, and Michael Blair were indicted by the federal grand jury on mortgage fraud charges. From about August 2005 to May 2006, the defendants are accused of devising a mortgage fraud scheme involving straw buyers and the submission of false information to financial institutions in order to obtain mortgage loans. The defendants are alleged to have been involved in 12 fraudulent real property sales transactions involving nine homes sold in Las Vegas. The homes were either flipped—sold twice within a short period of time—or were the subject of foreclosure. The majority of the homes sold for more than $600,000, and the approximate value of the mortgages for the 12 transactions was $8 million. The defendants are pending trial.
USA v. Lloyd Gardley et al.
Case No. 2:10-cr-00236-GMN-LRL
On May 26, 2010, Lloyd Gardley, Candis Gardley, Suzanne McAllister, Arcell Mitchell, Jr., and Sharon Wagner were indicted by the federal grand jury on mortgage fraud charges. From about 2005 to April 2007, the defendants are accused of devising a mortgage fraud scheme involving straw buyers and the submission of false information to financial institutions in order to obtain mortgage loans. Between August 25, 2005, and April 18, 2007, the defendants are alleged to have been involved in 28 fraudulent real property sales transactions involving 21 homes sold in Las Vegas. Seven of the homes were "flipped" or sold twice within short periods of time. The majority of the homes sold for more than $700,000, and the total value of the mortgages for the 28 transactions was $18.9 million. The defendants are pending trial.
USA v. Brett Depue et al.
Case No. 2:10-cr-00121-RLH-RJJ
On March 10, 2010, Brett Depue, owner/operator of numerous now-defunct Nevada investment companies, and two of his former employees, Brian Barney and Maria Ornelas were indicted by the federal grand jury on mortgage fraud charges. From about February 1, 2005, to May 31, 2007, in Nevada and elsewhere, the defendants allegedly participated in a mortgage fraud conspiracy in which they used "third party disbursements" and "double escrow" methods to fraudulently obtain monies from the financial institutions. The Indictment specifically discusses 17 homes in Las Vegas and Henderson which were purchased fraudulently between April 2005 and April 2007. The defendants are pending trial.
USA v. Calway Cauley et al.
Case No. 2:08-cr-00288-PMP-RJJ
On February 19, 2010, following a four-day jury trial, Calway Cauley was convicted of conspiracy to commit mail fraud; mail fraud; conspiracy to commit wire and bank fraud; and two counts of bank fraud. Cauley used straw buyers to obtain mortgages to purchase houses in Nevada and California, causing lenders to lose between $200,000 and $400,000. Cauley is scheduled for sentencing on August 3, 2010. Four co-defendants were also charged in the scheme and have pleaded guilty: William Ervin, Ladon McClellan, Joyce Wilturner, and Truemeatra Warner.
The President’s Financial Fraud Enforcement 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 on the task force, visit StopFraud.gov.