Three Attorneys, Two Real Estate Brokers, and Five Others Indicted in $10 Million Mortgage Fraud Scheme
|U.S. Attorney’s Office April 06, 2010|
Earlier today at the federal courthouse in Brooklyn, New York, an indictment was unsealed charging 10 defendants, including three attorneys and two licensed real estate brokers, with conspiracy, bank fraud, and wire fraud arising out of their mortgage fraud scheme. The indictment alleges that the defendants fraudulently obtained over $10 million in loans from American Home Mortgage, Fremont Bank, BNC Mortgage (a subsidiary of Lehman Brothers), and WMC Mortgage (a subsidiary of GE Money Bank).
The indictment was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, Joseph M. Demarest, Jr., Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office, and Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation. The defendants’ initial appearances and arraignments are scheduled later today before United States Magistrate Judge Roanne L. Mann, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The case has been assigned to United States District Judge I. Leo Glasser.
The indictment charges Akin Ayorinde, Hervin Henry, Anthony Onua, Umana Oton, Max Shimba, John Star, Anthony Suazo, Marisol Vasquez, and two others with conspiracy to commit bank and wire fraud. In addition, Ayorinde, Henry, Onua, Oton, Shimba, Star, Suazo, and two others are charged with bank fraud, and Ayorinde, Henry, Onua, Shimba, and two others are charged with wire fraud.1
As detailed in the indictment, from January 2005 to May 2007, Ayorinde, Onua, and Star purchased properties located in Brooklyn and Queens. Ayorinde and Onua are attorneys licensed to practice in the State of New York, and Star is a real estate broker licensed in the State of New York. As part of the scheme, the defendants allegedly submitted false loan applications to create the appearance that the properties were being purchased by creditworthy individuals, when, in fact, the properties were purchased at inflated prices by straw buyers who were controlled by Ayorinde, Onua, and Star. Many of these straw buyers were recruited by Henry, a real estate broker licensed in the State of New York. The indictment charges that Suazo furnished fraudulent appraisals to support the inflated purchase prices of the properties, and Onua, Shimba, and Marisol Vasquez provided fraudulent title abstract reports and other documentation that falsely enhanced the purported value of the properties. These false documents induced lenders to issue loans which were far in excess of the true value of the properties.
The defendants were assisted in the fraud by a third attorney, Oton, who is also licensed to practice in the State of New York. Ayorinde, Onua, and Oton served as attorneys at the closings and allegedly were aware that there were fraudulent misrepresentations made to lenders in connection with the closings.
“This prosecution is another example of the results of the department’s ongoing efforts to investigate and prosecute allegations that licensed professionals abused their positions to perpetrate mortgage fraud,” stated United States Attorney Campbell. “We believe that professionals who serve as gatekeepers against fraud owe a duty to their clients and their oaths and should not compromise that duty by promoting their own selfish interests.”
FBI Assistant Director-in-Charge Demarest stated, “As attorneys and real estate brokers, these men know the ins and outs of dealing in real estate. We should expect them to be honest and serve their clients, but in this case they allegedly did just the opposite. Their activity hurts the trust that everyone should be entitled to when dealing with their attorneys and brokers. The FBI is dedicated to tracking down those that work to abuse the system and steal money while causing further damage to the real estate market.”
FDIC Inspector General Rymer stated, “The Federal Deposit Insurance Corporation Office of Inspector General is committed to its partnerships with others in the law enforcement community as we address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that if the individuals indicted today have undermined that integrity, they will be held accountable.”
The maximum term of imprisonment for any defendant convicted of conspiracy to commit bank and wire fraud is 30 years. The indictment also seeks forfeiture of the proceeds of the defendants’ bank and wire fraud activities, including a criminal forfeiture money judgment and money traceable to the offenses.
The government’s case is being prosecuted by Assistant United States Attorneys Jonathan E. Green and Daniel A. Spector.
1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.