Flagstar Bank was duped in one case involving a crooked lawyer for $700,000 while a Miami attorney stole about that amount in public money.
Mark Helfand, 60, who has pleaded not guilty to federal charges, is one the lawyers in MortgageDaily.com’s latest installment of real estate attorneys gone wild.
According to a 12 count indictment handed down in U.S. District Court in Chicago late last year, Helfand worked closely with members of the Jackson family, who prosecutors say used real estate seminars on property flipping to mask a fraud scheme.
Three members of the Jackson family — who worked as loan officers and appraisers — have already pleaded guilty to various mortgage and bank fraud charges.
Helfand is accused of aiding the Jacksons’ scheme by providing money to the Jacksons, who used the funds to buy dilapidated properties. The Jacksons would then, according to prosecutors and court documents, find buyers for the properties. But the appraisals were inflated to secure bank loans for more than the properties were worth.
And many of the buyers were unqualified to receive loans and were acting as “straw” buyers.
Prosecutors say Helfand helped prepare phony documents used to secure loans from Flagstar Bank. He also attended the closings as a lawyer, where money was allegedly skimmed for those involved in the scam.
Flagstar says it was taken for nearly $700,000 and many of the properties involved in the scam fell into foreclosure when the property owners couldn’t make payments.
Prosecutors have said the Jackson’s are expected to testify against Helfand.
In Miami, lawyer and affordable housing developer Oscar Rivero, once heralded in south Florida for his vision and success, has been arrested on public corruption charges.
Court records and government documents show that Rivero is charged with stealing more than $700,000 in public money that was earmarked for public housing for the poor. Prosecutors say he used the money to buy a house in South Miami and outfit it with appliances and a swimming pool.
The court documents indicate that in November of 2004 the Miami-Dade Housing Authority wrote Rivero a check for $806,000. The money was allocated so Rivero could build an affordable housing project, but the project was not built.
Rivero is accused of wiring most of the money to a title company and then allegedly buying the house with cash.
Rivero could not be reached to comment. He faces up to 21 months in prison. He has been charged with two first degree felonies; grand theft and committing an organized scheme to defraud.
Rivero was considered a civic and business leader who had served as chairman of the Miami Parking Commission and once worked as an aide to former Miami-Dade County Manager Alex Peneles.
The housing authority is facing charges of scandal and mismanagement, much of it reported in a series of articles by the Miami Herald. Following the articles Joe Martinez, chairman of the Miami-Dade Board of County Commissioners, appointed an ad hoc committee to conduct a review of the housing authority.
“Recent media coverage … alleged that public lands were conveyed and some of the public funds were allocated to private developers who, charged with building affordable housing for the neediest of our community failed to produce,” Martinez said in a statement.
The U.S. Department of Housing and Urban Development issued a statement applauding Martinez’s action and offering to help in the probe.
Finally, in New York, five people have pleaded guilty to running a mortgage scam through a phony law firm.
According to the Nassau County District Attorney’s office, Joseph LaMattina and Associates Inc. was created to look like a legitimate law firm. LaMattina is a lawyer from Long Island, N.Y., and has not been implicated in the case. But is he related to people who are.
LaMattina set up a business for his relatives in order to make income from residential closings, according to a statement from district attorney Kathleen Rice. But he became sick and allowed the business to continue, being run by his wife’s relatives.
The relatives established a trust account for mortgage lenders to wire closing funds. “The corporation was then supposed to distribute the entire amount of the incoming wire for a particular loan at the direction of the borrower,” Rice said.
But Dillon said the five defendants used the money to buy real estate, a 37-foot boat and luxury cars that included Bentleys, Rolls Royces, Mercedes and a Corvette. They also spent $250,000 on their own mortgage payments.
The five used the phony law firm and various accounts and businesses to move money and cover their tracks, Rice said.
“The defendants moved millions of dollars in and out of the corporation’s accounts and transferred funds back and forth between other companies that were controlled by the defendants,” she said.
Others have also pleaded guilty in the scheme. Eight people were originally indicted.
