Ten Indicted in Loan Modification Fraud Scheme
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula Reid, Special Agent in Charge, United States Secret Service, Miami Field Office, and Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service, Miami Division, announce the unsealing of a 20-count indictment returned by a Federal Grand Jury in West Palm Beach charging mail fraud and conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Sections 1341 and 1349.
The following defendants were charged in the indictment:
- Jason Andrew Vitulano, 38, of West Palm Beach, FL;
- Robert Harry Bacon, 34, of West Newbury, MA;
- Peter Ian Brown, 26, of Sound Beach, NY;
- Christopher Francisco Duharte, 36, of Coconut Creek, FL;
- Brian Fleuridor, 29, of Delray Beach, FL;
- Arthur Vincent Fogarty, III, 57, of Hollywood, FL;
- Neil Lawrence Sack, 40, of Fort Lauderdale, FL;
- Gregory B. Small, 28, of Boynton Beach, FL;
- Jeffrey Charles Leroy Taylor, 39, of North Lauderdale, FL; and
- Ajay Alexander Thuraisingham, 26, of Tamarac, FL.
Each defendant is charged with one count of conspiracy to commit mail and wire fraud and multiple counts of mail fraud. According to the Indictment, between September 2008 and August 2009, the defendants operated boiler rooms that collected advance fees from distressed homeowners purportedly in exchange for obtaining loan modifications for the homeowners which were, with few exceptions, never provided.
The indictment alleges that defendant Vitulano was the organizer and operator of FHA All Day.com, Inc. and two other companies, Housing Assistance Law Center, Inc. and Safety Financial Corp., which operated the boiler rooms in Boca Raton and later in Deerfield Beach. According to the indictment, defendant Bacon was an operations manager who wrote and edited sales scripts, while the other eight defendants served as team managers of four to eight telemarketers who made thousands of phone calls to homeowners behind on their mortgage payments.
As alleged in the indictment, the defendants made false statements to the homeowners including telling homeowners they had already been approved or pre-approved for a loan modification that would save the homeowner a specific amount off their mortgage payment, reducing the interest rate and often the principal balance on the mortgage loan. The defendants, according to the indictment, routinely told customers that they had been approved by an “underwriter” and that they had a team of “expert attorneys” who would finalize the loan modifications.
The indictment further alleges that the defendants targeted homeowners across the country that were facing foreclosure, falsely telling them that the company would stop the foreclosure process and that homeowners could stop making mortgage payments while they waited for the company to finalize their loan modifications. FHA All Day, as alleged in the indictment, moved its offices and changed the corporate name several times to avoid law enforcement scrutiny and to hamper consumer complaints. Through the use of these and other false representations, the defendants, according to the indictment, induced over 2,000 distressed homeowners to pay up front fees totaling more than seven million dollars to the defendants.
Defendant Vitulano faces up to 20 years imprisonment on each of the 20 counts against him. Defendants Taylor and Thuraisingham face up to 20 years in prison for each of the four counts against them. The other seven defendants, who are each charged in three counts, face up to 20 years in prison on each of those counts. All ten defendants further face up to $250,000 in fines and mandatory restitution as to each charge.
Defendant Vitulano is expected to make his initial appearance in West Palm Beach on January 15, 2014. Defendant Brown made his initial appearance in federal court in the Eastern District of New York on December 24, 2013 and was released on bond. Defendant Thuraisingham will make his initial appearance in the Eastern District of New York today.
Defendants Duharte, Fleuridor, Fogerty, Sack and Taylor made their initial appearances today in West Palm Beach. Fleuridor and Fogarty are being held pending bond hearings scheduled for Monday, December 30, 2013. Defendant Taylor’s pre-trial detention hearing is set for Tuesday, December 31, 2013. Defendants Bacon and Small will make their initial appearances in federal court on December 31, 2013 in West Palm Beach. These initial appearances and hearings will take place at 10:00 A.M. in U.S. Magistrate’s Court in West Palm Beach on their respective days. Defendants Duharte and Sack were released on bond today.
Mr. Ferrer commended the investigative efforts of the U.S. Secret Service and the U.S. Postal Inspection Service. This case is being prosecuted by Assistant U.S. Attorneys Lauren Jorgensen and Ellen Cohen.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
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.