Miami – Dade’s 41 for $40M Mortgage Scandal

Federal and State agents in Florida in July went forward with indictments on forty one people in a Mortgage Fraud case that can only be described as nightmare for the lenders involved.

The indictments are the result of an investigation that begun in September 2007 by the Federal-State Mortgage Fraud Strike Force and has only just begun in the courts. The indictments cover forty one people from mortgage brokers to title agents to straw buyers. The fraud in this ring was very well organized to have covered so many aspects of the mortgage industry.

Magile Cruz, the owner of Star Lending Mortgage, State Mortgage Lending, Sherley Title Services, Doral Title Services and Professional Title Express, received ten years in prison last January for her involvement that lead to the first set of indictments.

The indictments included nineteen residents of Miami-Dade County for their actions that lead to the twenty one million dollars in fraudulent mortgage loans. Most acted as straw buyers or knowingly participated in falsifying mortgage loan applications.

The second set of indictments charged thirteen straw buyers with Bryan A. Guarch and Richard Pi being the coordinators behind the scam. Allegedly the two used the proceeds from falsified loan applications to payoff the straw buyers and fund bountiful life styles.  The case alone resulted in four million in fraudulent loans and cost the mortgage lenders involved over two point six million in losses.

Sixto Figueroa and Susy Figueroa, husband and wife were indicted in the third set of indictments that include three straw buyers that the Figueroa’s recruited and submitted false loan applications to lenders. They fraudulently sold residential lots in Port LaBelle that resulted in eight hundred thirty thousand dollars in fraudulent loans.

The fourth indictment was for Fielding Dameron. Allegedly he recruited straw buyers, submitted falsified loan applications in several real estate deals in both Miami – Dade and Broward Counties between 2005 and 2007 which resulted in nine point eight million in fraudulent mortgage loans.

Stephen LaLonde was indicted on his role in a mortgage closing scheme in the fifth indictment. Spectrum Title in Oakland Park handle six closings in which LaLonde is allegedly stole more than one million from Spectrum Title, legitimate borrowers, and mortgage lenders. LaLonde would keep the proceeds from loan being refinanced and not payoff the borrowers existing loan.

The final indictment involved Milennys Foira and Richard Diaz. They recruited Jean Claude Chaen to use his identity for ten thousand dollars and enough credit to buy property in Miami. Chaen agreed to the arrangement and Foira and Diaz submitted a falsified mortgage application, the lender wired the funds, no payments were made on the mortgage and the property fell into foreclosure. The result was four hundred and fifty thousand dollars in mortgage loan.

In view of the indictments in Miami in July it has became clear that mortgage lenders need to ensure that their fraud procedures are implemented at all levels.