A group of mortgage brokers have been accused of using fraudulent loan packages to help a New York builder sell properties at artificially inflated prices.
According to court documents provided by the U.S. Department of Justice, the case involves $67 million in homes built by entities owned and operated by Robert A. Amico and sons Robert J. Amico and Richard N. Amico. Mortgages against the properties total more than $57 million. Prices paid for some of the individual properties exceeded $600,000.
Beginning around July 1994 and continuing to about January 2000, the Amicos built at least 170 residential homes in the Rochester, N.Y., area. The Amicos allegedly used no-down-payment schemes to attract buyers, with purchasers not being required to pay closing costs or attorney fees.
Many of the loans were run through Patrick McNamara, a mortgage broker and star witness for the government in the case against the Amicos. Using state-of-the-art computer technology and scanners, McNamara and the Amicos allegedly altered income and asset documents, created fake leases, and presented fraudulent loan applications to wholesale lenders.
Among the defrauded lenders were Bank of America FSB, Chase Manhattan Mortgage Corporation, Citicorp Mortgage Inc., Countrywide Home Loans, Inc., Flagstar Bank, FSB, GE Capital, Indy/Mac Mortgage Holdings Inc., Option One Mortgage Corporation, Standard Federal Bank, The CIT Group/Consumer Finance Inc., and Washington Mutual Bank.
McNamara, along with closing attorney Joseph Shramek and others, allegedly misled lenders by presenting documentation indicating down payments of up to 25% when, in fact, no down payments were being made — and some of the purchasers were receiving cash back. Shramek represented both the Amico entities and the purchasers at most of the closings, and also represented the lenders at many of the closings. Shramek allegedly deceived the purchasers into signing the fraudulent closing documents.
McNamara and Shramek were officers of many of the entities owned by the Amicos. McNamara was the purchaser of more than one Amico home.
McNamara also used other mortgage brokers to obtain the approvals. Although required, the brokers did not interview the applicants and obtain supporting documentation directly from them. They included Capital Mortgage Network, Inc. (owned by defendant Debra Gilliatt), MFC Mortgage Company (managed by defendant Allan Peters), Lenders Choice Funding, Inc. (employer of defendant John DiNuzzo), Ambassador Group, Mitchell George & Associates, and Citi Mortgage Services, Inc.
The government said Gilliatt, Peters, and DiNuzzo knew the documentation they received from McNamara and the Amicos was false. According to case documents, the three earned extraordinarily large commissions from wholesale lenders by charging the buyers excessively high rates and collecting yield spread premiums.
McNamara and the Amicos allegedly duped appraisers by providing fake blue prints that inflated the square footage of the homes, purchase agreements which falsely stated that the purchasers had agreed to pay the inflated sale prices for the homes, and information regarding comparable sales of other Amico homes where property values had been inflated.
They also are accused of altering legitimate appraisals and creating fake appraisals using the fictitious appraiser names Kyle Rapke and Charles Carey.
In testimony against the Amicos, McNamara — who pleaded guilty in the scheme — said Robert A. Amico talked about fleeing the country when the massive mortgage fraud scheme began to unravel. The Rochester Democrat and Chronicle reported that McNamara testified the two visited cemeteries in Atlanta during March 2000 to obtain the names of people who had died young, which would help them obtain fake identification.
The Democrat and Chronicle also reported that McNamara has lied five times testifying against the Amicos.
Other articles about mortgage fraud cases include:
- Builder A. William Erpenbeck, Jr. directed his employees to deposit checks made out to construction lenders to the company’s own bank account.
- Angel L. Serrano Jr. accused of duping mortgage lenders in a Massachusetts flip scheme.
- Fraud Flips National Phenomenon: A look at mortgage fraud schemes.
- Atlanta fraud network responsible for more than $100 million in losses.
- Several southern California individuals have been charged for defrauding lenders and HUD of millions.
- The Provident Bank has reportedly filed a civil lawsuit against Community Home Mortgage Corp., accusing the company of fraud.
- Todd H. Charske and Gregory B. Romer of Kemper Financial Inc. are accused by the FBI of operating a flipping scheme and defrauding Meritage Mortgage Corporation
- According to the Suspected Fraud Activity Index for August of this year, the state showing the most deterioration in the Fraud Index combined with the higher activity levels is Texas.
- Two Virginia men are accused of using a Virginia title insurance agency to illegally divert loan proceeds for their own benefit.
- 83 individuals have been indicted by a Cleveland grand jury for participating in mortgage fraud schemes.
- Former PinnFund CFO admitted to being a coconspirator in the $300+ million Ponzi scheme
- Three Peoria, Illinois women were sentenced for their involvement in a mortgage loan scam where they defrauded a bank of $1.7 million in a classic flip transaction scheme
- Shirley Harwood and her employee pled guilty to defrauding two lenders out of more than $6 million
- Loan originator Brian J. Wilkozek and two loan processors are among fifteen people indicted in a south side Chicago “flipping” scheme
- Edward Rostami was sentenced to a year in prison for using a fraudulently obtained property title to obtain a $1 million loan
- Rene Abreu was among 11 people indicted in a case involving The Mortgage Pros, Inc. in Guttenberg, New Jersey
- David Allan Van Velzer, Jr., was sentenced to more than 8 years in prison for wire fraud and money laundering
- Kenneth Bradford and Jo Ellen Bryant received 10+ year sentences in a Georgia flipping case
- Seven indicted in AppOnline.com mortgage fraud scheme
- Indian authorities apprehended Rajiv C. Shah, one of two brothers that allegedly sold loans with fraudulent documentation to 3 U.S. lenders
- Loans originated by originated by Chapel Creek Mortgage Banker, Inc. could cost Chase Manhattan Mortgage Corp. between $10 and $20 million
- 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
- Robert B. Herbert, Jr. of Raleigh allegedly “embezzled and misappropriated moneys from Stewart Title.
- Donald Lukens allegedly defrauded more than 100 investors — including popular sports figures — of at least $12.5 million in a number of schemes, including one involving mortgage backed securities
- 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.
- The government is pursuing mortgage fraud cases in Charlotte and Cleveland.
- Miami family allegedly ran a mortgage fraud ring that swindled lenders out of $3.8 million.
- 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
