11 Indicted In Mortgage Fraud Case

Rene Abreu, 40, and his wife Lourdes Adan-Abreu, 39 — owners of The Mortgage Pros — also owned Abreu Real Estate and RLA Homes, companies used to facilitate the alleged bank and mail frauds, according to the announcement. Mortgage loan originators and processors employed by The Mortgage Pros were also named in the indictment. Several of the defendants have either been arrested or turned themselves in, including Abreu.

The scheme began in 1992, the DOJ said. The defendants allegedly disregarded financial documents provided by borrowers and instead submitted false documentation to several financial institutions in an effort to secure approval on residential and commercial loans. Fake HUD-1 statements were allegedly prepared to hide the exchange of funds between the buyer and seller, enabling the appearance of a cash down payment by the buyer.

Defrauded lenders include Bank United of Houston, Texas; Household Bank, FSB of Wooddale, Illinois; and Flagstar Bank, FSB (formerly First Security Savings Bank) of Bloomfield Hills, Michigan.

The Indictment said that false financial statements were submitted to the New Jersey Department of Banking and Insurance in order to retain the mortgage banking license. The Department’s regulations required that Mortgage Pros maintain a net worth of $250,000 to retain its mortgage banking license.

One defendant, Luis Nieves, was employed by Hudson United Bank, according to the indictment. As a senior loan officer at the bank, he allegedly helped Abreu in a check kiting scheme that enabled Abreu to avoid obtaining loans through official means. Nieves is accused of accepting $3,000 for his part. During a five year span, the negative balance in Abreu’s account repeatedly exceeded $1 million.

Count seventeen of the indictment accuses Abreu and another defendant, Manuel Mier, a/k/a “Manny Mier”, of collecting bribe and protection money from the owner-operators of an illegal gambling operation and a corrupt local chief of police. The defendants allegedly represented to the police chief that they were “acting on behalf of a high-level West New York public official.”

To launder the funds, the DOJ said more than $2 million was deposited into accounts at Hudson United in amounts less than $10,000 per transaction. Transactions above $10,000 require domestic financial institutions to file reports with the Internal Revenue Service. More than $5,000 in cash payments were allegedly made to a bank teller for assistance in structuring some of the deposits.

Following is a complete list of defendants.

• RENE ABREU
• LOURDES ADAN-ABREU
• ANA MARTELL
• KATHY GIUNTA
• VALERIANO SANCHEZ a/k/a “Valerio Sanchez”
• FERNANDO JIMENEZ
• EDGARDO AGUIRRE a/k/a “Eddie Aguirre”
• RONALD ROSNER
• LUIS NIEVES
• JOSE CERVINO
• MANUEL MIER a/k/a “Manny Mier”

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• Indian authorities apprehended Rajiv C. Shah, one of two brothers that allegedly sold loans with fraudulent documentation to 3 U.S. lenders
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• Kent E. Baklor was sentenced for defrauding two lenders of over $8.5 million
• Tamira Smyth was sentenced in a Chicago ‘flipping’ scam involving twenty defendants
• Former Las Vegas mortgage broker David Ferradino was sentenced to five years’ probation and ordered to pay $4.2 million in restitution to 90 investors
• Michael Graham received a sentence of more than 12 years in prison and was ordered to pay $515 million in restitution for his role in the failure of The First National Bank of Keystone.
• Yehuda Shiv was charged by the SEC with overstating the value of his clients’ assets by more than $139 million
• Cheryl A. Swain pleaded guilty to a charge of mail fraud in connection with her conduct as the VP for Marketing Syndication of MCA
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• Steven D. Mueffelman and John S. Lombardi charged in a 15-count indictment with mail and wire fraud
• Raymond T. Jackman, JR. was sentenced to two years’ probation
• GreatStone Mortgage in Florida is accused of fraud, sexual harassment.
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• Maryland is the state with the most instances of possible fraud, according to Affinity Corporation’s ‘Suspected Fraud Activity Index’ for the months of June, July and August.
• Thomas Eck and Zahra Gilak made as much as $15 million, and defrauded investors of $100 million in sham that included online mortgage brokerage
• Richard Wood, a Las Vegas mortgage broker accused of bilking millions of dollars from dozens of investors in a nationwide Ponzi scheme, was gunned down outside his home.
• FBI Investigating Massive Mortgage Fraud Case In Spokane
• Richard Michael McDowell, who through southern California-based Active Home Loans and M&M Loan Service admittedly swindled an estimated $7 million from about two dozen investors, was sentenced to 27 months in federal prison

Sam Garcia has been in mortgage lending since 1980, and is the Publisher of MortgageDaily.com. He also owns and operates CloseNow.com, a consumer real estate portal site.email: SamGarcia@MortgageDaily.com