Eleven Individuals Sentenced For Their Participation In Large-Scale Mortgage Fraud Scheme
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich sentenced 11 individuals this week for their participation in a large-scale, Sarasota-area mortgage fraud scheme. The scheme spanned over ten years and involved tens of millions of dollars in fraudulent loans. The individuals sentenced this week previously pleaded guilty to conspiring to commit wire fraud, and/or to making false statements on loan applications, which were submitted to FDIC-insured financial institutions and mortgage lenders. The scheme involved a myriad of fraudulently acquired properties, many which were on prime, waterfront real estate. The on-going investigation has so far resulted in the conviction of a total of 19 individuals, including a number of loan officers, title agents, real estate agents, and mortgage brokers.
The idea behind the scam perpetrated by those involved in this case, and their conspirators, was to fraudulently obtain the maximum loan possible on each property by providing false information in the loan application. The conspirators would then sell the properties within a few years after they appreciated without risking much, if any, of their own money. The conspiracy began in the late 1990's and then grew slowly until 2004, when it exploded with the drastic increase in real estate prices in Sarasota. The conspiracy ended, however, when the real estate market collapsed in 2008.
Richard Bobka (43, Sarasota), one of the main perpetrators of the fraud, was sentenced to 15 years in federal prison and ordered to pay $22,841,625.74 in restitution for his role in helping to oversee the scheme. Bobka pleaded guilty earlier this year, while a jury was being selected for a trial involving himself, his brother, George Cavallo (47, Kirkland, WA), his sister-in-law, Paula Hornberger (41, Kirkland, WA), and one of his associates, Joel Streinz (54, Nokomis). Cavallo, Streinz, and Hornberger were convicted in May 2012 following a 3-month trial. They were sentenced last week to 10 years, 5 years, and 12 months and 1 day respectively.
R. Craig Adams (45, Tampa) was sentenced to 3 years in federal prison and ordered to pay $25,024,775.74 in restitution for his role in initiating and orchestrating the conspiracy. In the spring of 2008, when the fraudulent scheme began to collapse with the downturn in the real-estate market, Adams turned himself into law enforcement. Over the next 4 years, Adams cooperated extensively with the government in its efforts to target the most culpable individuals who caused the largest losses to the banks.
Nine other defendants were also sentenced this week for their roles in the scheme.
• Joseph Dirocco (43, Sarasota), 24 months in federal prison, and $1,590,000 in restitution;
• Jeffrey Berghorn (48, Sarasota), 12 months and 1 day in federal prison, and $2,495,653.74 in restitution;
• Thomas Brustad (43, Sarasota), 12 months and 1 day in federal prison, and $3,005,500 in restitution;
• Jonathan Glucker (45, Sarasota), 12 months and 1 day in federal prison, and $6,318,000 in restitution;
• Derek Luther (42, Sarasota), 12 months and 1 day in federal prison;
• Lisa Rotolo (49, Bradenton), 12 months and 1 day in federal prison, and $23,378,975.74 in restitution;
• Bonnie Katz (59, Wisconsin), 3 years Probation, with 6 months home detention, and $15,638,975.74 in restitution;
• George Bobka, Sr. (76, Sarasota), time served and $4,534,150 in restitution;
• Heather Kabobel (40, Sarasota), time served and $1,925,000 in restitution.
This case was investigated by the Federal Bureau of Investigation, the FDIC’s Office of Inspector General, and the Sarasota County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Christopher Tuite and Cherie Krigsman.