Home San Diego Press Releases 2010 Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting...

Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters

U.S. Attorney’s Office June 17, 2010
  • Southern District of California (619) 557-5610

SAN DIEGO, CA—Following an announcement today by Attorney General Eric Holder in Washington, D.C., representatives of the Financial Fraud Enforcement Task Force in San Diego, including United States Attorney Laura E. Duffy; FBI Special Agent in Charge Keith Slotter, Assistant Special Agent in Charge of Internal Revenue Service - Criminal Investigation's Los Angeles Field Office Ellon Lindsey; and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Neil Barofsky announced the regional results of the nationwide takedown "Operation Stolen Dreams," which targeted mortgage fraudsters in the Southern District of California 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.

“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.”

United States Attorney Laura E. Duffy said, “In today's fragile economic environment, mortgage fraud of varying types has inflicted damage and suffering throughout our community. The United States Attorney's Office is committed to investigating and prosecuting those who illegally traffic in financial hope and victimize the unwary.”

FBI Special Agent in Charge Keith Slotter commented, "Given the current financial and economic state of the country mortgage fraud only exacerbates the problems that have plagued the housing industry. We are committed to investigating those who participate in such schemes and will aggressively pursue those who put their personal greed above the good of this nation."

“Mortgage fraud hurts our communities, driving home buyers into foreclosure, leaving lenders with bad loans and neighborhoods burdened with deteriorating and abandoned properties. This type of crime not only erodes the financial health of our communities, it also threatens the integrity of our tax system,” observed Ellon Lindsey, Assistant Special Agent in Charge of IRS - Criminal Investigation's Los Angeles Field Office. Today, IRS - Criminal Investigation is pleased to be a part of the numerous investigations that have successfully attacked these crimes on a variety of fronts. From wire fraud and tax crimes to mail fraud and money laundering, these schemes have been successfully disrupted and their promoters brought to justice.”

Special Inspector General for the Troubled Asset Relief Program Neil Barofsky stated, “The United States Government's response to the foreclosure crisis includes programs to support struggling homeowners by modifying their mortgages at no expense to the borrowers. By engaging in criminal conduct, fraudsters hurt not only their direct victims, but also the credibility of the Government's relief efforts. Such conduct will not go unpunished. SIGTARP is committed to working with its law enforcement partners to bring to justice each and every criminal who seeks to profit from this national crisis.”

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.

Operation Stolen Dreams cases in the Southern District of California include:

United States v. Benjamin Aguilera, et al., Case Number 10cr2242JM

On June 8, 2010, a federal grand jury handed up a 51-count indictment charging 19 individuals with mail fraud and wire fraud in connection with a mortgage fraud scheme carried out in San Diego and the San Francisco Bay Area. The indictment alleges that defendants, many of whom were licensed loan officers and real estate professionals, falsified employment and income information in mortgage applications to induce banks and lending institutions to make loans to unqualified or under-qualified borrowers. The defendants generated at least $55 million in fraudulent loans and received over $1 million in fees and commissions. The defendants charged in this case are: Benjamin Aguilera, Matthew Antinarelli, Maria Isabella Antinarelli, Stephen Kenneth Chrysler, Aida Agusti Castro, Ebrahim “Abe” Darian, Maria Teresa Echeverria, Mylene Funk, Ivan Gil, Francisco Arnulfo Giron, Jr., Laneka Marie Motley, Jonathan J. Garcia, Karen Garcia, Mansour Zandi, Mustafa Shujayee, Solmaz Naji, Stephen Jonathan Lawler, Sean Robert Livingston Peck, and Vince Premchand Thadani.

This case is the product of an investigation by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Valerie H. Chu.

United States v. Brian Andrew La Porte, Case Number 10cr1863LAB

A 10-count indictment was unsealed on May 20, 2010, charging six individuals with conspiracy to commit wire fraud and wire fraud. The defendants are charged with submitting false and fraudulent mortgage loan applications and related documents to banks and other lending institutions, thereby inducing the institutions to make approximately 36 loans totaling approximately $20,800,000.00. The defendants charged with participating in the conspiracy are: Brian Andrew La Porte, Daniel John Schuetz, Michael Wayne Wickware, Roxanne Yvette Hempstead, Darryl Anthony Wallace, aka Darryl Anthony White, and Terrence Smith, aka Terry Lee Smith. The indictment alleges that the defendants devised a scheme to defraud mortgage lenders and to obtain money and property by false and fraudulent means and diverted the proceeds for their personal use and benefit. According to the indictment, from May 2008, the defendants agreed to submit false loan applications to mortgage lenders to obtain financing to purchase residential properties. The defendants recruited “straw buyers” who had sound credit histories but who otherwise would not have qualified to purchase the residential properties selected by the defendants. The indictment further alleges that, as part of the conspiracy, defendants Brian Andrew La Porte and Daniel John Schuetz prepared fraudulent loan applications on behalf of the straw purchasers, falsely stating the employment and monthly salaries of the straw purchasers.

This case is the product of an investigation by agents of the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Jonathan I. Shapiro.

The public is reminded that an indictment 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.

United States v. Roberto Aguilera, Case Number 10cr2020L

Roberto Aguilera, an Enrolled Agent with the Internal Revenue Service, entered a guilty plea to an information charging conspiracy to commit wire fraud and bank fraud in connection with a mortgage fraud scheme. Aguilera admitted that he prepared letters which falsely stated that individuals were self-employed and that he had prepared tax returns for them in prior years, when in fact Aguilera had not prepared prior years' tax returns for them and did not know whether they were self-employed. Aguilera sold these letters to loan officers, real estate professionals, and borrowers to be submitted to banks and lending institutions in support of mortgage applications which contained false statements about borrowers' income and employment. The plea is subject to final acceptance at the time of sentencing on August 9, 2010, before District Court Judge M. James Lornez.

This case is the product of an investigation by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Valerie H. Chu.

United States v. Glenn Steven Rosofsky, Case Number 10cr0978BEN

United States v. Michael Trap, Case Number 10cr0912BEN

Glenn Steven Rosofsky pleaded guilty on June 1, 2010 to a superseding information charging him with one count of conspiracy to commit wire fraud and money laundering, one count of money laundering, and one count of filing a false tax return. Michael Trap pleaded guilty on March 24, 2010 to a two-count information charging him with conspiracy to commit wire fraud and money laundering. These criminal charges stemmed from Rosofsky and Trap's operation of a fraudulent telemarketing operation in San Marcos, California. Rosofsky and Trap admitted that in approximately April 2009, he and Trap began operating a loan modification business using the names “Nations Housing Modification Center” and “Federal Housing Modification Department” (NHMC), in an effort to fraudulently sell loan modification services to homeowners who were delinquent on their monthly mortgage payments. Rosofsky and Trap admitted that they and others used false and fraudulent statements and representations to induce customers to purchase loan modification services from NHMC. Sentencing is set for Rosofsky on September 10, 2010 and Trap on June 21, 2010 before United States District Court Judge Roger T. Benitez.

These cases are the product of an investigation by agents of the Internal Revenue Service, Criminal Investigation and the Office of the Special Inspector General - Troubled Asset Relief Program (TARP) and is being prosecuted by Assistant U.S. Attorneys Eric J. Beste and Jonathan I. Shapiro.

United States v. Darnell Bell, et al., Case Number 09cr1209H

Darnell Bell entered a guilty plea on March 5, 2010, to an indictment charging that he conspired to violate the Racketeer Influenced and Corrupt Organizations (RICO) statute by engaging in a pattern of racketeering activity, namely, wire fraud, bank fraud, and money laundering. The charged racketeering activity all stemmed from an extensive mortgage fraud scheme based in San Diego, California. In addition to Bell, eleven defendants have entered guilty pleas in this matter. According to the plea agreement, Bell and the members of the corrupt enterprise devised a scheme to defraud mortgage lenders and to obtain money and property by false and fraudulent means. Bell admitted that, among other things, the corrupt enterprise used inflated appraisals, A “straw buyers,” and false loan applications in order to induce lenders to make loans to persons and at terms that the lenders otherwise would not have funded. Bell further admitted that members of the corrupt enterprise structured the escrow documents in such a way that the enterprise received a cash “kickback” on each real estate transaction. Bell also admitted that the straw buyers failed to make the required mortgage payments for the fraudulently purchased properties, which ultimately resulted in the properties' being foreclosed upon. Sentencing is scheduled on July 26, 2010 before U.S. District Judge Marilyn L. Huff.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation and is being prosecuted by Assistant U.S. Attorneys Nicole Acton Jones and Todd W. Robinson.

United States v. Kurt Gardner, Case Number 10CR2324JM

Kurt Gardner entered a guilty plea on June 15, 2010, to a two-count information charging Gardner with wire fraud and filing a false tax return. The guilty pleas were tendered before United States Magistrate Judge Louisa S. Porter, subject to final acceptance at the time of sentencing by United States District Court Judge Jeffrey T. Miller. According to court records, Gardner admitted to obtaining a loan on a property by submitting a loan application containing false statements, which were supported by fraudulent bank statements, employment earnings statements, and W-2 statements. Sentencing is scheduled for September 10, 2010.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Christopher M. Alexander.

United States v. Lucette Montane, Case Number 08CR2387W

Lucette Montane entered a guilty plea on May 3, 2010, to Count One of an Indictment charging Montane and five other defendants with conspiracy to commit wire fraud. According to court records, in 2005 Montane and others worked for Creative Financial Solutions, Inc. (“CFS”), a mortgage brokering company located in San Diego. CFS was in the business of sending loan application packages and other documents to lenders for review and funding. The court documents further allege that CFS did not fund loans, but instead received commissions from the lenders when the loans closed. In addition to the commissions, Montane and others received payments from lenders, sellers, and buyers when loans closed. The documents also allege that CFS obtained mortgage loans for unqualified borrowers by, among other things, concealing the true purchase price of the homes by submitting false purchase contracts; submitting false loan applications; intentionally concealing the fair market value of the home; using misleading appraisals; and submitting false bank statements and income documentation. In total, the victim lenders funded more than $16 million in loans on properties that have been foreclosed or are in the foreclosure process. The lenders have lost over $3.9 million, with potential losses in excess of $5.1 million, due to the fraudulent loans. Sentencing is scheduled for Montane and the five other defendants on July 19, 2010, before United States District Court Judge Thomas J. Whelan.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Christopher M. Alexander.

United States v. Eric Montiel, et al., Case Number 09cr2582WQH

Eric Montiel pled guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud in connection with the operation of fraudulent investment programs and the use of fraudulent home loan applications to obtain money for investment purposes. His plea was accepted on March 11, 2010 by United States District Judge William Q. Hayes. In his plea agreement, Montiel admitted that he and others prepared home loan applications falsely stating that the potential borrowers earned substantial income as employees of businesses where the borrowers did not in fact work, overstating assets, and fabricating bank statements to submit in support of home loan applications. The conspiracy resulted in more than $20 million in losses to individuals, financial institutions, and other lenders. Sentencing for Montiel is scheduled for November 22, 2010, before Judge Hayes.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation and is being prosecuted by Assistant U.S. Attorneys Steven E. Stone and Melanie K. Pierson.

United States v. Moises Pacheco, Case Number 10cr1585JM

Moises Pacheco pled guilty on May 7, 2010, to conspiracy to commit mail fraud, wire fraud, and bank fraud in connection with the operation of fraudulent investment programs and the use of fraudulent home loan applications to obtain money for investment purposes. In his plea agreement, Pacheco admitted that he and others provided false representations on home loan applications regarding borrower's employment and assets. The conspiracy resulted in more than $7 million in losses to individuals, financial institutions and other lenders. Sentencing is set for August 6, 2010 before United States District Judge Jeffrey T. Miller.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Steven E. Stone.

This content has been reproduced from its original source.