Press Release
FEDERAL-STATE MORTGAGE FRAUD INITIATIVE CHARGES 31 DEFENDANTS IN MULTI-MILLION DOLLAR MORTGAGE FRAUD SCHEME
December 17, 2007
FOR IMMEDIATE RELEASE
R. Alexander Acosta, United States Attorney for the Southern District of Florida, Michael K. Fithen, Special Agent in Charge, United States Secret Service (USSS), Michael V. Powell, Special Agent in Charge, U.S. Department of Housing and Urban Development , Office of Inspector General (HUD-OIG), Region IV, Henry Gutierrez, Inspector in Charge, U.S. Postal Inspection Service, and Roger Reinke, Chief, City of Marco Island Police Department, announced today charges against 31 defendants in the most recent multi-million dollar mortgage fraud scheme in South Florida. Today’s announcement follows the September 27, 2007 announcement by United States Attorney Acosta launching a Federal-State Mortgage Fraud Initiative to combat the growing problem of mortgage fraud in South Florida. Since then, 55 defendants have been charged in connection with several mortgage fraud schemes involving fraudulent mortgage loans totaling more than $75 million.
Today’s Indictment charges defendants Juan Torrens, the de facto owner of Amsouth Trust & Investment Corp. (“Amsouth”) and president of Countryside Land & Development, Inc., Rachael Torrens, president of 1st Choice Realty of South Florida, Inc. and de facto owner of First United Mortgage USA Corp., Daniel Ramos, Alfonso A. Muxo, a State of Florida certified real estate appraiser and owner of Palm Bay Real Estate Appraisals, Inc., and Katherine Harris, former president and part owner of Floridian Home Title Corporation, with conspiracy to commit wire fraud and/or wire fraud for their participation in a massive mortgage fraud scheme. This scheme involved fraudulent mortgage loans obtained for the purchase of 28 properties located in Miami-Dade and Broward Counties, and in the City of Marco Island. The Indictment also charges defendants Mario E. Diaz, Aurelio Pozo, Oscar Barreiro, Lellany Rordriguez, Jose Asensi, Carlos Morales, Damaris Jimenez, Lizabeth Perez, Mario Blanco, Rene Rodriguez, Tamaris Angulo, Alicia Loaiza, Ester Crespo, Jesus Enrique Guevara, Janette Lugo, Priscilla Fleitas, Erick Clavijo, Luis DeJesus Planas, Moises Llorens, Milva Roque, Aurora Ramentol, Gladys Lens, Nancy Fundora, Yanny Cruz Pavon, and Jacqueline Perez-Castillo (“the straw buyer defendants”) with wire fraud for their participation in this mortgage fraud scheme.
According to the Indictment, Juan Torrens would identify sellers of residential properties who were willing to overstate the true selling price of their properties. Daniel Ramos and Juan Torrens would then recruit and pay the straw buyer defendants to pose as buyers and ostensibly participate in the purchase of the selected properties. Defendants Rachael Torrens and Juan Torrens would prepare and cause to be prepared on behalf of the straw buyer defendants fraudulent mortgage loan applications. The applications included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2. These fraudulent loan applications would be signed by the straw buyer defendants.
Thereafter, to support the overstated sales prices on the properties and the fraudulent mortgage applications for the straw buyer defendants, defendant Alonso A. Muxo would prepare, for a fee, fraudulent appraisals attesting to the inflated property values dictated by Juan Torrens. Roger Rosario, an employee of Regions Bank, provided, on at least one occasion, a fraudulent verification of deposit in connection with a mortgage loan application for one of the straw buyer defendants.
To effectuate the scheme, defendants Juan Torrens and Rachael Torrens, together with the straw buyer defendants, would create and submit to the banks and lending institutions HUD-Settlement Statement Forms, also known as HUD-1s, which falsely stated that the straw buyers brought their own funds to the closings. In truth, however, the straw buyer defendants brought no such funds to the closing. The straw buyer defendants would allow their identities and credit information to be used in the mortgage loan applications, falsely representing themselves to be the true buyers of the properties and the individuals responsible for the loan.
Once the mortgage applications were approved, the lenders would wire the loan proceeds to the title company, Floridian Home Title, for closing. At closing, Amsouth, a company owned and controlled by Juan Torrens, would receive a credit for the difference between the inflated price and the actual selling price of the property. Defendant Katherine Harris would, for a secret fee, create and submit to the lender a false Settlement Statement form, HUD-1, concealing from the lender the existence of the credit given to the buyer from the seller and that Amsouth was also involved in the transaction.
Lastly, defendants Juan and Rachael Torrens would make the payments on the mortgage loans to maintain the loans afloat until the properties could be resold again, often to another straw buyer. When the Torrenses failed to make payments on the loans, some properties went into foreclosure, resulting in substantial losses to the lending institutions.
United States Attorney Acosta stated, "Mortgage fraud cannot be ignored. It has become a real and daily threat to the asset most important to most of us Floridians – our homes. The United States Attorney’s Office and our law enforcement partners in this Initiative have made prosecution of mortgage fraud a top law enforcement priority. To date, our Mortgage Fraud Initiative has resulted in the prosecution of 55 individuals responsible for more than $76 million in fraudulently obtained loans. Unfortunately, more prosecutions will follow.”
Michael Fithen, Special Agent in Charge of the U.S. Secret Service, noted, "The Secret Service Miami Field Office embraces this new initiative to address the full scope of mortgage fraud schemes that continue to emerge and victimize South Florida. We will bring to bear our expertise and that of law enforcement partners from our Electronic Crimes Task Force and Financial Crimes Task Force to assist in these significant investigations."
Kenneth M. Donohue, Inspector General of the U.S. Department of Housing and Urban Development - Office of Inspector General, said, "The message here is clear: if you do business with HUD and try to defraud, we're coming after you. We are motivated to do so because, like most American taxpayers, we are appalled that some people try to manipulate these programs at the expense of families in need."
Roger Reinke, Chief of the City of Marco Island Police Department, stated, “On behalf of the citizens of Marco Island, the Marco Island Police Department is proud to assist the United States Attorney’s Office, the U.S. Secret Service, the U.S. Department of Housing and Urban Development - Office of Inspector General, and all other law enforcement agencies involved in this investigation. Of the twenty-four properties under investigation, fifteen were located in Marco Island.”
If convicted of conspiracy to commit wire fraud and/or wire fraud, the defendants face a statutory maximum sentence of twenty (20) years of incarceration, as to each count of conviction. Substantial penalties and restitution would also be ordered.
Mr. Acosta commended the investigative efforts of the U.S. Secret Service, the U.S. Department of Housing and Urban Development - Office of Inspector General, U.S. Postal Inspection Service, and the City of Marco Island Police Department. He also commended the cooperative efforts of Harry Berry and the Floridian Home Title Corporation in this investigation. This case is being prosecuted by Assistant United States Attorney Richard D. Boscovich.
Attachments:
Indictment (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
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