Home Sacramento Press Releases 2011 Jury Convicts Elk Grove Man in Sacramento-Area Mortgage Fraud Scheme
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Jury Convicts Elk Grove Man in Sacramento-Area Mortgage Fraud Scheme

U.S. Attorney’s Office March 31, 2011
  • Eastern District of California (916) 554-2700

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today that Gabriel Richard Viramontes, 48, of Elk Grove, was convicted today of six counts of bank fraud and seven counts of mail fraud. The guilty verdict was returned by a federal court jury in Sacramento after a seven-day trial before United States District Judge Edward J. Garcia.

According to testimony presented at trial, Viramontes and three co-defendants (who had already pleaded guilty to related charges) engaged in a mortgage fraud scheme in the Sacramento area that involved at least 19 homes with loans of more than $8 million.

From June 2006 through October 2006, the defendants, through VFM Investment Group, Esnian Mortgage Realty, and Freedom Capital Mortgage, engaged in a mortgage fraud scheme by asking investors to purchase with no money down single family homes on behalf of others with bad credit who wished to purchase homes. The investors were told they would benefit financially from the transactions. The defendants then defrauded lenders such as Washington Mutual Bank, Long Beach Mortgage, and Fremont Investment and Loan by submitting fraudulent loan applications that inflated the buyers' income, falsely stated that a buyer was employed at a specific job, and falsely stated that the properties would be owner-occupied. The purpose of the scheme was to ensure that the home purchase transactions closed, so that the defendants would receive substantial loan broker commissions and illegal kickbacks from real estate sales commissions.

James Roy Martin, 40, pleaded guilty to making false statements on a loan application and money laundering on March 26, 2010. Mario Fellini III, 42, pleaded guilty to making false statements on a loan application on March 12, 2010. Joseph Salvatore Gallo, 38, pleaded guilty to misprision of felony on February 18, 2011. All are from the Sacramento area.

Immediately after conviction, Judge Garcia remanded Viramontes into custody to await sentencing. He is scheduled to be sentenced by Judge Garcia on June 23, 2011. He faces a maximum sentence of 30 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an extensive investigation by the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, and the California Department of Real Estate. Assistant United States Attorneys Matthew C. Stegman and Michael D. Anderson prosecuted the case.

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