Twenty Individuals Indicted and Arrested for Providing False Statements in Loan Applications and Bank Fraud
Defendants Face a Forfeiture Allegation of $3,177,650
|U.S. Attorney’s Office February 25, 2014|
SAN JUAN—Twenty individuals, including ringleaders, straw buyers, sellers, real estate agents, and an accountant have been charged in a 11-count indictment unsealed today and returned by a grand jury in San Juan, Puerto Rico, on February 12, 2014, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico announced today. These charges stem from a scheme used by the defendants to obtain money from mortgage lending institutions. The investigation was conducted by the Department of Homeland Security (HSI), along with Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), and the Housing and Urban Development-Office of Inspector General (HUD-OIG).
The defendants are charged with bank fraud and making false statements in loan applications. The investigation revealed that as part of the scheme and artifice to defraud, the defendants, through straw buyers, would purchase properties by obtaining mortgage loans from federally insured financial institutions in amounts substantially exceeding the selling price of the properties. The excess amount of the loans would be “kickbacked” to the defendants, and then they would default on payment of the monthly mortgage premiums.
In order to ensure the approval of the loans, the participants would create and submit false supporting documentation along with the loan application, e.g., financial statements, bank statements, employment verification letters, and tax returns, among others.
According to the indictment, the defendants, aiding and abetting each other, knowingly made or caused to be made material false statements to various financial institutions for the purpose of influencing the action of other financial institutions in connection with a loan application to obtain mortgage loans. The financial institutions are Banco Santander de Puerto Rico, Doral Bank, Banco Bilbao Vizcaya Argentaria of Puerto Rico, and RG Premier Bank of Puerto Rico.
The defendants are Lina Prestol-Rodríguez, José Santana-Aponte, Carlos Vélez-De Jesús, Ángel Torres-Maymi, Brenda Mercado-Rodríguez, Marilyn Meléndez-Prestol, Johanna Rivera-Benítez, Carlos Solis-Guzmán, José Luis Negrón-Molina, Alexander Cifuentes-Ramos, Carlos Ortiz-Dávila, Eduardo Cora-Colón, Gabriel Branda-Collazo, Ricardo Santiago-Verdecía, Marco Antonio Ambert-Torres, José Rafael Mora-Nazario, Angélica Álvarez-Castañeda, Sheila Benabe-González, Adelinzy Grace-Vázquez, and Awilda Díaz-Cabrera.
Defendant Lina Prestol-Rodríguez, the leader of the fraudulent schemes, is also charged with conspiracy to commit money laundering. It was the object of the conspiracy that Prestol-Rodríguez and her co-defendants would engage in a series of financial and monetary transactions, some in excess of $10,000 in criminally derived property, in order to promote the carrying-on and concealment of the bank fraud and false statements in loan applications in order to unjustly enrich themselves and eliminate existing debt obligations.
“This indictment demonstrates the commitment of the Department of Justice and the U.S. Attorney’s Office in Puerto Rico to ensure the integrity of the financial and banking system,” said Rosa Emilia Rodríguez Vélez, U.S. Attorney for the District of Puerto Rico. “The investigation and prosecution of financial crimes is one of the top priorities of the U.S. Department of Justice. Mortgage fraud is a serious issue for the banking industry and for homeowners who helplessly watch as their property values decrease, and foreclosure signs and abandoned properties take over their neighborhoods.”
“These arrests are a reflection of the success that comes when federal, state, and local law enforcement agencies work together to target criminal organizations and individuals in Puerto Rico,” said Ángel Meléndez, special agent in charge of HSI San Juan. “At HSI, we follow the money trail to identify, disrupt, and dismantle the most complicated financial schemes and seize criminal assets. We will continue to aggressively investigate fraudulent financial schemes that put in jeopardy the integrity of our financial system and are often a gateway to further criminal activity.”
Lester Fernández, Special Agent in Charge of this Region for the U.S. Department of Housing and Urban Development-Office of Inspector General, stated, “It is always disturbing when industry professionals who have fiduciary responsibilities and are expected to act as honest brokers exploit federally funded programs. HUD-OIG will continue to partner with prosecutors, law enforcement, and audit agencies to aggressively pursue those engaged in activities that harm federal housing programs.”
Carlos Cases, Special Agent in Charge of the FBI, said, “Mortgage fraud isn’t a victimless crime. It threatens the financial health of our communities and leaves lenders burdened with bad loans and neighborhoods with abandoned and deteriorating property. FBI will continue to utilize its financial investigative expertise to aggressively investigate criminal activities that attack our financial system.”
IRS Special Agent in Charge José A. González stated, “The IRS-Criminal Investigation is committed to employing its financial expertise to investigate and trace the flow of the monies derived from financial violations, including mortgage fraud. Rest assured that those willing to participate and profit from these illegal activities will be deprived of their ill-gotten gains and brought to justice.”
This case is being prosecuted by Senior Litigation Counsel Scott Anderson. The case was investigated by ICE-HSI, HUD-OIG, FBI, and IRS.
The maximum penalties for these offenses are 30 years of imprisonment and fines up to $1 million. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.