Las Vegas Real Estate Broker and Husband Charged with Federal Mortgage Fraud Offenses
Las Vegas, Nev. – A Las Vegas real estate broker and her husband have been charged by the Federal Grand Jury with defrauding federally-insured financial institutions of millions of dollars through a scheme that involved inflated housing values, straw purchasers and limited liability companies, announced Gregory A. Brower, United States Attorney for the District of Nevada.
Eve Mazzarella, 30, and her husband, Steven Grimm, 45, were indicted on Wednesday, March 12, 2008, and charged with six counts of Bank Fraud, one count of Money Laundering, and Aiding and Abetting. Grimm was arrested this morning in Las Vegas by agents and officers of a joint federal, state and local mortgage fraud task force, and is scheduled to appear before a United States Magistrate Judge at 3pm tomorrow for an initial appearance and arraignment. Mazzarella has not yet been arrested.
"It is a violation of federal law for a person to make a false statement regarding income, assets, debt, or matters of identification, or to willfully overvalue any land or property in a loan and credit application for the purpose of influencing in any way the actions of a federally-insured financial institution," said U.S. Attorney Brower. "Victims of mortgage fraud may include the banks which loan the money, but also include all homeowners and would-be homeowners who end up paying for this type of fraud. The U.S. Attorney's Office has made the prosecution of mortgage fraud a priority, and intends to work closely with its partners on the Southern Nevada Mortgage Fraud Task Force to aggressively investigate and prosecute individuals who commit this type of offense."
Eve Mazzarella and Steven Grimm control and operate numerous limited-liability companies, registered in Nevada and conducting business in Las Vegas. According to the allegations in the Indictment, from about January 1, 2004, to the present, Mazzarella and Grimm, devised the following scheme to defraud federally-insured financial institutions in order to benefit themselves:
- Mazzarella and Grimm recruited individuals (straw buyers) to make offers to purchase homes in Las Vegas at substantially above the seller's asking price. Once the purchase was negotiated, the straw buyers applied for mortgages from financial institutions. Mazzarella and Grimm placed, or caused to be placed, false information regarding the straw buyers' places of employment, income and assets on the mortgage loan applications in order to ensure that the straw buyers could qualify for the loans.
- The defendants required the straw buyers to transfer title to the property to a designated limited liability company controlled by the defendants. The defendants typically used the straw buyer's first initial and last name to name limited liability company. The defendants did not pay the straw buyer his/her fee until the property was transferred to the limited liability company.
- After the mortgage loans were funded, the defendants caused title and escrow companies to disperse a portion of each loan to one of their limited liability companies.
- Once the defendants obtained control over a property, they would again sell the same property to another straw buyer at an inflated price.
- The defendants engaged in approximately 432 straw buyer transactions, and obtained control over approximately 227 properties with a total purchase price of over $100 million.
- The defendants defaulted on mortgage payments on many of the loans which caused the properties to go into foreclosure. At least 118 of the approximately 227 properties purchased by the defendants have been sold in foreclosure causing losses to the banks of more than $15 million.
If convicted, the defendants face up to 30 years in prison and a $1,000,000 fine on each bank fraud charge and up to 10 years in prison and a $250,000 fine on the money laundering charge.
This is an ongoing investigation which is being led by the FBI and IRS Criminal Investigation, and other agencies of the Southern Nevada Mortgage Fraud Task Force, including the Las Vegas Metropolitan Police Department, the Nevada Attorney General's Office, Office of the Inspector General for the Social Security Administration, Office of the Inspector General for the Department of Housing and Urban Development, and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Brian Pugh.
Persons who have information concerning potential mortgage fraud may contact the Southern Nevada Mortgage Fraud Hotline at (702) 584-5555.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.