All the players were in place to run a textbook mortgage scam — mortgage broker, lawyer, appraiser, real estate investors and phony buyers.
For a while, it worked. Using “straw buyers,” phony appraisals, fake employment records and bogus income and asset information, New York state prosecutors say the crew of alleged mortgage scammers used 23 mortgage transactions to steal $4.4 million from three banks.
So brazen were the accused thieves that they received one mortgage loan by simply erecting a facade on the front of a house in Brooklyn that had been mostly destroyed by fire years ago, said Nassau County, N.Y., District Attorney Denis Dillon.
But the scheme fell apart after a woman filed a complaint in March 2003 alleging her identity had been stolen and used to obtain a $360,000 mortgage loan from Washington Mutual Bank, Dillon said in a statement.
“Our investigation confirmed that the person who appeared at the closing…was someone other than the complainant,” Dillon said.
Dillon has filed charges against seven people who allegedly participated in the scam to use fake information to obtain mortgages.
The investigation also involved what Dillon described as an “elaborate flipping scheme.”
“The defendants were…purchasing properties to resell at inflated prices, and using either outright identity theft or paid ‘straw borrowers’ to obtain the mortgage loans needed for both the purchases and resales of the properties,” Dillon said.
“The ‘resale’ would generally take place on the same day as the initial purchase, sometimes occurring even before the defendants had actually purchased the property, and proceeds from the ‘resale’ would be used to pay for the initial purchase,” he said.
In the statement, Dillon’s office detailed the charges each of the defendants face.
John Graziano, 37, is a mortgage broker in Northport, N.Y., who allegedly handled the phony loan packages and directed the fake document scheme. He faces charges of grand larceny, possession of forged documents and fraud.
Sam Hilany, 34, was identified as real estate investor from West Hemstead, N.Y., and the alleged leader of the ring. “Hilany was both the seller and purchaser of each of the properties and he received all the proceeds,” Dillon said.
Hilany is accused of selling properties he did not own, arranging the phony appraisals and setting up the bogus contracts. He faces more than 50 years in prison if convicted of all charges.
Antonio Duval, 39, is a real estate appraiser in South Ozone Park, N.Y., who allegedly inflated the values of property.
In the instance of the burned out building, Duval allegedly submitted to lenders “a diagram purportedly of the layout of the building’s interior even though the building actually had no interior and was merely an exterior shell,” Dillon said.
Duval was charged with theft, fraud and falsifying business records.
Epko Steele, 31, of 31, of Springfield Gardens, N.Y., and Raimundo Tijada, 31, of Forest Hills, N.Y., were allegedly paid $5,000 to act as straw buyers and obtain the loans by using the phony documents. Each were charged with theft and possession of forged documents.
Raquel Ushkow, 36, a lawyer from Selden, N.Y., faces fraud charges for allegedly helped Hilany “in conveying properties he did not own by representing him at both the sale and purchase of properties,” Dillon said.
Georgette Ritchie, 39, vice president and title closer for Generation Abstract Corp. in Amityville, N.Y., handled the closings and was aware of the flipping scheme and the “huge discrepancies between the purchase and sale prices.”
Ushkow and Ritchie were charged with fraud and face up to four years in prison.
Lawyers for the defendants could not be reached. But attorneys representing Graziano and Ushkow told New York’s Newsday that their clients are innocent.
