News

Financial Fraud Enforcement Task Force Announces Regional Results of “Operation Stolen Dreams” Targeting Mortgage Fraudsters


Over Two Dozen Local, State and Federal Agencies Coordinate Their Efforts
to Combat Fraud and Seek Restitution in Maryland

FOR IMMEDIATE RELEASE
June 17, 2010

Baltimore, Maryland – Following an announcement today by Attorney General Eric Holder in Washington, D.C. regarding a takedown organized by the Financial Fraud Enforcement Task Force, U.S. Attorney for the District of Maryland Rod J. Rosenstein announced the regional results of the nationwide takedown, Operation Stolen Dreams, which targeted mortgage fraudsters in the District of Maryland and throughout the country and is the largest collective enforcement effort ever brought to bear in confronting mortgage fraud.

The sweep was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on March 1, 2010 to date, Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions which have resulted in the recovery of more than $147 million.

“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”

"The Maryland Mortgage Fraud Task Force includes local, state and federal regulatory and law enforcement agencies working together to coordinate our enforcement actions, identify appropriate cases for investigation and devote the resources necessary to pursue them," said U.S. Attorney Rod J. Rosenstein. "Our goals are to punish con artists who have committed mortgage fraud and deter others from following in their footsteps."

Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement, recovering money for victims and increasing cooperation with state and local partners.

The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.

Participants in the Maryland Mortgage Fraud Task Force include:

Maryland Department of Labor, Licensing & Regulation, Office of the Commissioner of Financial Regulation Maryland Office of the Attorney General
Maryland Insurance Administration
Maryland Department of Human Resources
Maryland State Police
Baltimore County Police Department
Howard County Police Department State’s Attorney’s Office for Baltimore City
State’s Attorney’s Office for Baltimore County
State’s Attorney’s Office for Montgomery County
State’s Attorney’s Office for Prince George’s County
State’s Attorney’s Office for Howard County
United States Attorney’s Office for the District of Maryland
District of Columbia, Department of Insurance, Securities & Banking
Federal Reserve Bank of Richmond
Federal Bureau of Investigation
Inspector General, Federal Deposit Insurance Corporation
Inspector General for the Board of Governors of the Federal Reserve System
Inspector General, Social Security Administration
Inspector General, U.S. Department of Housing & Urban Development
Inspector General, U.S. Department of Veterans Affairs
Internal Revenue Service, Criminal Investigation Division
Special Inspector General for the Troubled Asset Relief Program
U.S. Postal Inspection Service
U.S. Secret Service

Assistant U.S. Attorney Jonathan Biran is the Task Force coordinator for the U.S. Attorney’s Office, District of Maryland. Mr. Biran is a member of a nationwide network of federal mortgage fraud prosecutors, and he maintains an email list used to relay information from the U.S. Department of Justice to members of the Maryland Mortgage Fraud Task Force.

For further information about the Maryland Mortgage Fraud Task Force, including instructions about how to report mortgage fraud and details about criminal mortgage fraud prosecutions, please visit www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.

Federal Operation Stolen Dreams cases in the District of Maryland include:

United States vs. Douglas Skibicki, CCB-10-0151

A superseding indictment was returned yesterday, June 16, 2010 charging Douglas Skibicki, age 41, of Bethesda, Maryland, with mail and wire fraud, aggravated identity theft and bankruptcy fraud, in connection with a mortgage fraud scheme in which he allegedly defrauded lenders, family and others of over $7.4 million. According to the 17 count superseding indictment, Skibicki was a mortgage originator and/or broker for a company which operated in Laurel, Maryland. From June 2005 through August 2009, Skibicki, with the assistance of an appraiser and others, allegedly participated in a scheme to defraud the victims of over $7.4 million through a series of real estate transactions. Skibicki was released after his arrest upon condition that he is prohibited from working in the financial services industry while awaiting trial.

http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/MortgageBrokerIndictedinSchemetoDefraudLendersFamilyandOthersofover2.8Million.html

United States vs. Dema Daiga & Olu Campbell, 09-00628

On June 10, 2010 a federal jury convicted Dema Daiga, age 28, of College Park, Maryland, and Olu Campbell, formerly known as Oluseun Oshosanya, age 29, of Laurel, Maryland, of numerous counts of wire fraud. According to trial testimony, from August to December 16, 2008, Daiga and Campbell used two straw purchasers and the stolen identifiers of four other individuals to purchase six Baltimore properties - five of which quickly went into default, resulting in a loss to a Beltsville mortgage lending company of approximately $664,493. Daiga was also convicted of two counts of aggravated identity theft in connection with the scheme. According to trial testimony, Daiga worked as a mortgage loan broker and assisted with property appraisals, and Campbell also worked in the mortgage lending field. The defendants are scheduled to be sentenced on August 27, 2010.

http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/TwoMarylandMenConvictedinMortgageFraudScheme.html

United States vs. David Wehrs, Sr., 10-00038

On May 19, 2010, an Annapolis mortgage broker was sentenced to three years in prison for defrauding home buyers and investors of $2.3 million in order to day trade and to pay personal and business expenses. According to his plea agreement, David Wehrs Sr., age 55, owned Maryland Title and Escrow Company, Inc., located in Annapolis, and operated a small home remodeling company called Show-Me. From 2007 to October 2009, Wehrs induced individuals to invest money through Maryland Title into a purported FDIC-insured money market fund that Wehrs “guaranteed” would pay monthly interest payments of 10.85%. Instead of depositing the money into a market fund, Wehrs deposited investor funds into one of two bank accounts he controlled in the name of his title company. Wehrs used the money to “day trade.” Day trading is the rapid buying and selling of securities throughout the day in the hope that the stocks will continue climbing or falling in value for the seconds to minutes that they are owned, allowing a person to lock in quick profits. During the scheme, Wehrs conducted millions of dollars of stock trades per month. From early 2008 until mid-2009, Wehrs lost approximately $1 million in day trading. Wehrs also used some of the investor funds to: pay “monthly interest” and “redemptions” to other investors; pay expenses of his other businesses, including Show-Me; make escrow payments for his title company; buy real estate and personal property; and pay other personal expenses.

http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/AnnapolisMortgageBrokerSentencedtoThreeYearsinPrisonIn2.3MillionFraudScheme.html

United States v. Massey, 10-00238

In May 2010, a Waldorf, Maryland couple pleaded guilty to lying to banks to obtain over $1.2 million in home mortgage loans in just three months, from June to September 2007. Melva Massey, age 39, her husband D’Von Massey, age 37, and others submitted three mortgage applications for three properties in Washington, D.C. to different banks which falsely stated: each property was to be the Masseys’ primary residence; the Masseys had substantial rental income; another individual rented other property owned by the Masseys; and that individual had provided Melva Massey a cashier’s check for a security deposit on the rental property. The three banks approved the mortgage loans in the total amount of $1,205,267. Each of the three properties went into foreclosure or short sale, resulting in a total loss to the banks of $859,190. The Masseys are scheduled to be sentenced in September, 2010.
http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/WaldorfWomanPleadsGuiltytoLyingtoBanksToObtainover1.2MillioninHomeMortgageLoans.html

United States v. Lynzi Richardson, CBD-10-1274

On April 8, 2010, Lynzi Richardson was charged by criminal complaint with assisting D’Von and Melva Massey in lying to banks to obtain over $1.2 million in home mortgage loans in just three months, from June to September 2007. The criminal complaint alleges that Richardson knowingly processed false loan applications on behalf of the Masseys containing false information about, among other things, the Massey’s income and their intent to use the referenced homes as their primary residence. This matter is pending, and the filing of a complaint is not a finding of guilt.

United States v. Idowu, 09-000298

Also in May 2010, a Hagerstown woman was convicted by a federal jury for fraudulently obtaining over $1.1 million in loans for her residence and bankruptcy fraud. Olusola Idowu, age 57, was the owner and president of SSS Nutrition & Dietetic Care Services (SSS Nutrition). SSS Nutrition was a health care services company specializing in the “Optifast” weight management program. According to testimony at her five day trial, between November 2003 and December 2008, Idowu falsely represented to financial companies that her son was employed as a nutritionist at SSS Nutrition and falsely representend his earnings and assets, in order to obtain mortgages and loans and lied to, and concealed information from, the U.S. Bankruptcy Court in relation to her Chapter 13 bankruptcy petition. Idowu is scheduled to be sentenced in August.

http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/HagerstownWomanConvictedforFraudulentlyObtainingOver1.1MillioninLoansandBankruptcyFraud.html

United States v. Cousins, 10-00089

On March 8, 2010, a federal grand jury indicted Rolando Alonzo Cousins, a/k/a “Junior,” age 32, of Bowie, Maryland, a senior loan officer at Metropolitan Money Store, for conspiracy to commit mail fraud, mail fraud and money laundering, in connection with the massive mortgage fraud scheme which promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, but left them homeless and with no equity. The 11 count indictment alleges that Cousins, Joy Jackson, Jennifer McCall and others: paid approximately $10,000 to each of the straw buyers to participate in the scheme; fraudulently bolstered the credit of the straw buyers so they could qualify for more favorable mortgages; obtained fraudulently inflated loans on the properties in the straw buyers names; served as straw buyers themselves; stripped away the bulk of the homeowners equity proceeds and converted that money to their own personal use; and stopped making the mortgage payments on the homes, resulting in the homes being foreclosed upon.

The indictment seeks the forfeiture of $1.5 million, alleged to be Cousins’ proceeds from the scheme.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Joy Jackson and Jennifer McCall pleaded guilty to their role in the scheme and were sentenced to 151 months in prison and 135 months in prison, respectively. Nine other co-conspirators also pleaded guilty and were sentenced.


http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/SeniorLoanOfficerwithMetropolitanMoneyStoreIndictedinMortgageFraudScheme.html

In addition to the above federal cases, there were significant developments in cases brought by state and local agencies that are members of the Maryland Mortgage Fraud Task Force, including:

State v. Katherine Ting Tiong , Montgomery County Circuit Court. This criminal case was brought by the Montgomery County State’s Attorney’s Office. Tiong is a licensed real estate agent in Maryland. She is alleged to have used family members as straw-purchasers to fraudulently purchase a home at below market prices through the Montgomery County Moderately Priced Dwelling Unit (MPDU) program. The fraud scheme allegedly included mortgage fraud as well as fraud against the government MPDU program. The home purchase allegedly was financed through a fraudulently obtained mortgage. Tiong then allegedly rented the property to third-parties in violation of MPDU program regulations and received the rental income for her personal benefit. It is also alleged that Tiong later refinanced the property through a fraudulent loan application and also fraudulently obtained a HELOC loan to strip the property of equity. An indictment was filed in this case on March 18, 2010. Trial is pending. An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Maryland Office of the Attorney General, Consumer Protection Division v. Metropolitan Money Store and Briane Barbour, Prince George’s County Circuit Court. In a civil case related to the federal Metropolitan Money Store prosecution described above, a judgment was entered against Barbour on March 15, 2010, ordering injunctive relief and entering a monetary judgment of $362,872.67.

The Prince George’s County State’s Attorney’s Office, in conjunction with the Department of Labor Licensing and Regulation Financial Regulation, brought the following cases:

Case No. 100457A
Indicted on 4/13/2010
Date of offense-January 1, 2009-March 1, 2009

Latoya Calder was indicted on mortgage fraud; multiple counts of felony theft from homeowner victims and against a mortgage lender without a lense and conspiracy. She worked as a mortgage originator for a Virginia-based brokerage and was subsequently fired from her position on account of the alleged mortgage fraud. After she was fired, she allegedly broke into her broker’s software system, stole the user name and password of another mortgage originator and commenced to broker deals through the company under someone else’s name. As a result of her alleged illegal activities, she secured multiple loans from the lender and collected illegal fees for loan consulting. Her former employee never received any of the money from the brokered deals because Calder and her co-conspirators allegedly circumvented the intended funds to their shell companies.

Case No. 100457C
Indicted on 4/13/2010
Date of offense-January 1, 2009-March 1, 2009

Stephan Baker was indicted on mortgage fraud, multiple counts of felony theft from homeowner victims and against a national lender, counterfeiting, identity theft, multiple counts of operating as a mortgage lender without a license and various conspiracy counts. The scheme involved charging phony pest inspection fees. Although he was a licensed pest inspector, he allegedly never provided pest inspections to his victims, but charged them up to $2,000. He also further allegedly perpetrated his fraud by receiving processing fees on the HUD One form. The processing fees were intended for the brokerage firm that his co-conspirator worked for.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Defendant Johnson Olawoyin pleaded guilty in the following cases:
Case 091536X
Guilty Count II - Operating as a mortgage lender without a license
Penalty: 11 months suspended: 364 days supervised probation with special condition of restitution in amount of $26,000. $10,000 due at sentencing; the remaining $16,000 is due 90 days after sentencing.

Case 091535X
Guilty Count - Theft
Penalty: 11 months suspended: 364 days supervised probation with special condition of restitution in amount of $10,000. $5,000 due at sentencing; the remainder is due 90 days after sentencing.

Case 091806X
Guilty Count IV - Operating as a credit business service without a license
Penalty: 11 months suspended: 364 days supervised probation with special condition of restitution in amount of $6,000. $5,000 due at sentencing; the remaining $1,000 is due 90 days after sentencing.

Sentencing is scheduled for July 15, 2010. The victims will be present to receive their first restitution payment.

The Maryland Department of Labor, Licensing & Regulation, Office of the Commissioner of Financial Regulation (with the Maryland Office of the Attorney General acting as counsel), issued orders to cease and desist against the following individuals and businesses, totaling 43 respondents and a total amount of judgments/final orders (including both orders for fines/penalties and orders for restitution) of $936,101:

In the Matter of Apply 2 Save, Inc., Derek Oberholtzer, and Trapper Fishbeck: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A final order to cease and desist was issued on April 30, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $409,000, and an order to pay restitution to 204 Maryland consumer victims totaling $306,000.

In the Matter of Marc Cox: Respondent engaged in unlicensed mortgage origination activity after his mortgage lender license had been revoked, and he collected improper finder’s fees. Final order issued on 5/12/2010: includes an order to permanently cease and desist from engaging in mortgage lending and mortgage origination activities with Maryland residents, an order to pay civil penalties of $28,000, and an order to pay restitution of $6,000.

In the Matter of William W. Bruner IV: Respondent’s actions during the mortgage lending process constituted fraud and resulted in the theft of money from a client. A final order was issued on May 20, 2010, which included an order to permanently cease and desist from engaging in mortgage lending, brokering, or origination activities with Maryland residents, an order to pay a monetary penalty of $11,000, and an order to pay restitution of $5,000.

In the Matter of David S. Stepney: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 5, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $5,000, and an order to pay restitution of $10,000.

In the Matter of First Choice Loan Solutions, LLC and Douglas S. Skibicki: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 5, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $2,000, and an order to pay restitution of $9,750. This matter related to the federal criminal prosecution of Douglas Skibicki described above.

In the Matter of The Home Savers, National Pacific Mortgage, Inc., Jason Ritchie, and Skip Cronin: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 5, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $3,000, and an order to pay restitution of $9,300.

In the Matter of 21st Century Legal Services, Inc., Fidelity National Legal Services Inc., Transitional Corporation of America, Inc., Andrea Ramirez, and Kathy Deleon: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 6, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $9,000, and an order to pay restitution to Maryland consumer victims totaling $28,734.

In the Matter of US Homeowners Assistance, Fredy Quesada, Marjorie Jorgensen, Sandy Hernandez, Joe Diaz, and Mastura Sheren: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 6, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $3,000, and an order to pay restitution of $7,200.

In the Matter of American Home Solutions Group LLC, Dante Marquez, Jeff George, and Andrea Olavarria: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 12, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $3,000, and an order to pay restitution of $4,500.

In the Matter of Fintech Services, Inc. a/k/a Fintech Loan Modification Services, Michael C. Mali, and Andrew Cappello a/k/a Andrew Capello: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 13, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $3,000, and an order to pay restitution of $6,000.

In the Matter of The Selig Law Group, P.C., Save My Home, Krista Selig, Chris Fasullo, William Soto, and Cheryl Johnson: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 13, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $5,000, and an order to pay restitution of $12,600.

In the Matter of Amerimod, Inc. a/k/a American Modification Agency, Salvatore Pane, Jr., Andrew P. Daniels, Efrain Roman, and Matthew Crosta: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 13, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $7,000, and an order to pay restitution to Maryland consumer victims totaling $35,517.

In the Matter of Pinnacle Financial Solutions Inc., and Ryan Zimmerman: Illegal loan modification activities, including collecting up-front fees from Maryland consumers and engaging in unlicensed credit services business activities. A Final Order to Cease and Desist was issued on May 13, 2010, which included an order to permanently cease and desist from engaging in loan modification, loss mitigation, or other similar activities with Maryland consumers, an order to pay a monetary penalty of $3,000, and an order to pay restitution of $4,500.

 

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