Two California Residents Indicted on Conspiracy and Bank Fraud Charges
TAMPA, FL—United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Gary Hughes (35, San Diego, CA) and Jason Martin (36, Orange County, CA) with one count of mortgage fraud conspiracy involving bank fraud, and other related substantive charges. Hughes and Martin each face a maximum penalty of 30 years’ imprisonment for each count. The indictment also notifies the individuals that the United States is seeking a forfeiture money judgment for the proceeds of the charged mortgage fraud conspiracy.
According to the indictment and court proceedings, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County, Florida. The new owners of The Arbors then engaged in a plan to convert the complex from rental apartments to condominium units.
Hughes and Martin’s co-conspirator, Brendan Bolger, aided the developers in the sale of numerous condominium units at The Arbors through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase units at The Arbors, Bolger created an addendum to the purchase contract that offered buyers various incentives, such as rental supplements, money to defray maintenance costs, and a design credit to upgrade the unit’s amenities. When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid a kickback for the amount of the design credit to the buyer from Capital Management’s bank account. In this manner, Bolger and other co-conspirators failed to disclose to buyers’ mortgage lenders material facts about the financing of the sale of The Arbors condominium units. Bolger and others referred prospective buyers to Hughes and Martin to obtain financing for their unit purchases. Hughes’s and Martin’s roles in the conspiracy as mortgage brokers consisted of originating mortgages for The Arbors units through Envision Lending and Set 2 Go Loans. The loan applications Martin and Hughes submitted contained material misrepresentations, including false occupancy and inflated borrower income and asset information. These loan applications were submitted to FDIC insured institutions and other mortgage lenders. Additionally, through their company, HUMAR Investments, Hughes and Martin provided the borrowers cash to close without disclosing the payments to the lenders.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.