9 Million dollars in Fraud 12 New York’s Arrested

Preet Bharara the United States Attorney for the Southern District of New York announced on October 8^th the arrest and indictments of twelve individuals for their roles in a mortgage fraud scheme. All twelve were arrested on the morning of October 8^th and were to appear in court later that day. The individuals included loan officers, mortgage brokers and attorneys who defrauded mortgage lending institutions in a residential mortgage scheme that involved over nine million dollars.

The defendants all had their own roles in the scheme and they used their individual expertise to purchase over a dozen properties in New York City and Long Island. The conspirators used inflated appraisals, straw buyers and false applications in order to obtain residential mortgages. They provided mortgage lending institutions with fraudulent mortgage applications and supporting documentation in order to obtain loans on the purchase properties involved.

The chief conspirator in the scheme is Jeffrey Larochelle. Mr. Larochelle is 29 and from Bay Shore. He worked for a mortgage broker company called Reliable Capital and processed mortgage loans through them. Mr. Larochelle’s job was to locate properties for the scheme. He also oversaw and directed the manufacturing of documentation that would be used by straw buyers and the submission of that fraudulent documentation to mortgage lenders for approval.

The individual who ensured loose ends were tidied up is Eric Finger. Mr. Finger is 44 and from Mineola. He was the attorney would handled some of the closings on the properties involved. Mr. Finger’s role was to ensure the closing and to adjust the HUD1 to ensure mortgage lenders would not catch on. He made the payments out to the other individuals in the scheme by falsifying the HUD. He was not alone. Brandon Lisi, 36 from Glen Cove who is also an attorney handled the purchase agreements and arranged for the straw buyers to meet the sellers in regard to the purchase properties. Joell Barnett is age 36 and from Brooklyn. Mr. Barnett was also one of the attorneys in the case who handled purchase agreements and received proceeds from the closings and dispersed the funds out to members of the conspiracy.

Denise Parks who is 43 and from Olive Branch, Mississippi worked for Atlas Home Equities. Mr. Parks was a loan office for the company. He often prepared the mortgage applications and did employment verifications and assisted in creating straw buyer identity information.

Foriduzaman Sarder was the chief straw buyer recruiter in the scheme. He is 40 and from Jackson Heights. Mr. Sarder provided loan officers with his name and address information in order to help ensure the straw buyers information on the mortgage application. Mortgage lenders would contact him for employment verification purposes.

Mikael Huq was one of the creators of the straw buyer identities. He created documents for the straw buyers for the sole purpose of closing the loan in a false name. Mr. Huq is 34 and from Astoria.

One of the straw buyers was Sakat Hossain. Mr. Hossain is 43 and from Jackson Heights. His role in the scheme was to act as the straw buyer.

Reginald Johnson who is 35 from St. Albans prepared documentation and submitted fraudulent loan applications to mortgage lending institutions. He worked out the of Hempstead office for Reliable Capital and was the Managing officer there.

Fredrick Warren processed loans through Reliance Capital as well as other broker firms. Warren is 35 and from Miller Place. His role in the scheme was to prepared the loan applications and assist in identifying properties in which to purchase.

Fritz Bonaventure who worked as an independent loan officer through Lend America identified properties, used fraudulent documentation, created fraudulent documentation and supplied straw buyer information to other brokers. Mr. Bonaventure is 28 and from Lithonia, Georgia.

The indictments of the twelve defendants stems from an investigation by the Federal Bureau of Investigation, the United States Attorney’s Office for the Southern District of New York, The NY State Attorney General’s Office, The NY State Banking Department’s Criminal Investigation Bureau, The United States Secret Service, The United States Postal Inspection Service, The Department of Homeland Security’s United States Immigration and Customs Enforcement, the New York State Department of Motor Vehicles, The New York City Department of Probation and the Social Security Administration.

Attorney Bharara acknowledged all the federal, state and local law enforcement agencies for their assistance in the investigation and thanked them for their outstanding service. He also acknowledged that the investigation is ongoing.

The Attorney General for New York stated that this criminal activity is what caused and contributed to the mortgage crisis. He stated that these twelve individuals were able to obtain millions of dollars using phantom buyers simply because it was easy. He stated that we need to work on regulation and continue law enforcement collaboration to ensure these types of individuals are not able to exploit the system.

Richard Neiman, the Superintendent of Banks for the New York State stated his disgust that attorneys and brokers who should have acted as gatekeepers to protect the mortgage lending system used the system for personal gain. He thanked all the agencies involved with the investigation on this case.

Brian Parr the Special Agent-in-Charge of the New York Field Office of the United States Secret Service stated that our Nation’s financial System is compromised continually by identity theft and other banking related crimes and that his office as well as the others involved in this case are committed to bringing these criminals to justice.

Ronald Verrochio, the Inspector-in-Charge of The New York Division of the United States Postal Inspection Service stated that his Postal Inspectors are committed to pursuing these types of cases to ensure that confidence is restored to financial markets.

Michael Lockard and Ryan Poscablo both Assistant United States Attorneys will be prosecuting the case along with Meryl Lutsky , the Assistant Attorney General.

Mr. Bharara noted that an indictment is merely an allegation that a crime has taken place and that all individuals are innocence until proven guilty.