U.S. Attorney MacBride Announces Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters
|U.S. Attorney’s Office June 17, 2010|
ALEXANDRIA, VA—Following an announcement today by Attorney General Eric Holder in Washington, D.C., U.S. Attorney Neil H. MacBride of the Eastern District of Virginia announced the regional results of the nationwide takedown, Operation Stolen Dreams, which targeted mortgage fraudsters in the Eastern District of Virginia 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, 2010, 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.”
“Mortgage fraud continues to be a big threat in our area,” said U.S. Attorney MacBride. “The overall results of these schemes are the same. They cause huge losses for our financial institutions, distress mortgage markets in our communities, and ruin many homeowners’ savings and their credit.”
In the Eastern District of Virginia, prosecutors have charged seven defendants as part of Operation Stolen Dreams. Since 2009, the office has prosecuted 57 individuals involving mortgage fraud, representing more than $100 million in loss and approximately $74 million in restitution. Those sentenced since 2009 will face a total of nearly 144 years in prison.
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.
The cases brought in the Eastern District of Virginia during Operation Stolen Dreams were investigated by the FBI, Internal Revenue Service, the U.S. Postal Inspection Service, and the Office of the Inspector General for the U.S. Department of Housing and Urban Development.
Below is a brief summary of the cases brought since March 1, 2010:
United States vs. Yvonne Robertson
Robertson, 44, of Hampton, Va., owned a real-estate investment business in Virginia Beach, Va., and is accused of signing contracts for investment properties but often assigning the contracts to other individuals for purchase with promises that she would arrange for the down payment funds and closing costs, that she would then manage the properties by finding renters, collecting rental payments, and making mortgage payments, and that individuals would received cash back from loan proceeds of the property.
United States vs. Charles Engle
Engle, 47, of Greensboro, N.C., was charged with making false statements on mortgage loan applications to purchase two properties in Cape Charles, Va. Engle allegedly inflated his income on these applications so that he could qualify for mortgages for which he would not otherwise qualify. The indictment further alleges that Engle submitted letters from friends verifying falsely his income and employment to qualify for these loans. After completing the initial purchases, Engle allegedly was able to withdraw over $140,000 in equity from these properties through second mortgages and refinancing the properties. Ultimately, the properties were foreclosed.
United States vs. Aaron V. Hernandez
Hernandez, 41, was affiliated with and owned and operated various mortgage companies located in Northern Virginia, which focused on the sale of vacant, sub-divided lots in North Carolina and South Carolina. Hernandez pled guilty to repeatedly falsifying mortgage loan applications through a number of ways. These included providing fake employment information and inflating buyers’ income levels, value of the real estate that they owned, or other liquid assets purportedly held by the applicants. The loss attributed to Hernandez was $4.5 million.
United States vs. Ahmad Abbasi
Abbasi, 36, of Woodbridge, Va., pled guilty to recruiting relatives or associates to fraudulently obtain more than $4.5 million in refinanced or new home loans for six properties, all of which have now been foreclosed at a loss of approximately $1.6 million to the lenders. As a result of these fraudulent loans, Abbasi received kickbacks and proceeds from the loans, refinances, or inflated flips totaling more than $746,000.
United States vs. Stephen M. Gunther
Gunther, 40, is an attorney from Hertford, N.C., who has a law office in Virginia Beach, Va. While acting as a settlement agent on four properties, Gunther pled guilty to concealing agreements where he used his personal funds to pay closing costs on behalf of buyers—who were actually straw purchasers—and subsequently was reimbursed by a third party. Relying on the false settlement statements, the lenders made the loans, which later went into default. Two were sold at foreclosure, with one sale pending.
United States vs. William D. Timberlake
Timberlake, 52, is an attorney with a law office in Virginia Beach, Va., pled guilty to defrauding several mortgage lenders in connection with closings on seven properties with loans totaling more than $2.2 million. At settlement, Timberlake did not disburse the funds in accordance with the lender’s instructions and the HUD-1 settlement statements and concealed side agreements between buyers, sellers and third parties. After five of the homes foreclosed, the lenders lost approximately $629,000.
United States vs. Tamiko Alston
Alston, 39, operated a real estate settlement firm in Hampton, Va., called Above All Title and Escrow. Alston is accused of working with a mortgage broker to prepare false settlement statements on at least 15 properties, which concealed the true source of the required buyer funds because the lender would not have approved the loan knowing the true information. Several of the properties later went into foreclosure.