Two are charged for $3.3 mortgage-Fraud involving six medina properties
A one-count federal information was filed against two people accused of taking part in a mortgage fraud scheme involving six luxury properties located in Medina, Ohio, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today.
The lenders lost a total of approximately $3,327,333 as a result of the scheme, according to the information. The information charges one count of conspiracy to commit bank fraud and wire fraud in a mortgage fraud scheme.
Those charged are: Joseph J. Beccia, age 60, of Parma; and, Alex F. Blackmore, age 49 of Bronx, New York.
The information charges that from in or around May 2006 through on or about June 20, 2007, Beccia and his company, Horizon Construction, built six luxury properties in Medina.
Although some of the properties were not fully completed, Beccia listed five of the six properties for sale at purchase prices that were equal to the true-market value of each property, starting on or about May 13, 2005. Specifically, Beccia listed the five properties for sale as follows: 2940 Sutton Lane, Medina for $599,000, on or about August 30, 2006; 4281 Fox Glen Drive, Medina for $395,000, on or about May 13, 2005; 4320 Perian Court, Medina for $399,000, on or about November 9, 2005; 3006 Sutton Lane, Medina for $529,500, on or about August 30, 2006; and, 4740 Lake Forest Trial, Medina for $925,000, on or about August 30, 2006.
Beccia incurred the cost of the construction of these homes without having known purchasers for these properties. Beccia was not able to sell these properties for an extended period of time and began to experience financial difficulties, according to the information.
Joseph Jones, an individual previously convicted in another mortgage fraud scheme, met Beccia through T.F., a real estate agent working in the area. T.F. advised Beccia that Jones had a system by which Jones could sell these properties so that Beccia could pay off his debts on the properties.
The information charges further that Jones and T.F. explained to Beccia that Jones had individuals willing to have properties purchase in their names. Jones and T.F., also, advised Beccia that in order to make Jones’ system work the properties would need to be removed from the market and re-listed at significantly higher purchase prices. Finally, Jones and T.F. advised Beccia that they would handle the interactions with the loan officers and securing the mortgage loans. All Beccia had to do was participate in the sale of the properties at the significantly inflated purchase prices and sign off on the loan documents as the seller, which Beccia agreed to do.
The information also charges that Beccia advised Jones and T.F. the amount of money he required from the sale of each the properties in order for him to repay the amounts he had borrowed to construct the luxury homes. Then, Jones determined the additional amount of money he wanted to receive over and above the amount of money required to be distributed to Beccia after the sale of each of the properties. Beccia and T.F. prepared new purchase agreements for each of the six properties with the inflated purchase price necessary to satisfy the amounts of money required.
Jones enlisted Blackmore to be a straw buyer/investor of some of Beccia’s properties. Jones advised Blackmore that if he would agree to allow these luxury homes to be purchased in his name, he would not have to provide any down payment funds because Jones would provide the down payment funds, and Jones would provide Blackmore with a significant amount of cash back after the closing of each property for allowing his name to be used as the purchaser. In addition, Blackmore signed the loan documents containing false information in order for him to qualify to purchase the properties, according to the information.
The information charges that T.F. re-listed five of the six properties for sale at the inflated purchase prices determined by Beccia and Jones as follows: 2940 Sutton Lane, Medina from $599,000 to $950,000; 4281 Fox Glen Drive, Medina from $395,000 to $647,000; 4320 Perian Court, Medina from $399,000 to $650,000; 3006 Sutton Lane, Medina from $529,500 to $920,000; and, 4740 Lake Forest Trial, Medina from $925,000 to $1,400,000.
Finally, the information charges that Jones enlisted the services of Marilyn Mannarino, an individual previously convicted in another mortgage fraud scheme, and Tower City on all six of Beccia’s properties. Tower City prepared the HUD-1s to make it appear to the financial institutions and mortgage lenders that Blackmore provided the down payments from his own personal funds, when in fact Jones provided the down payments. Beccia and Blackmore signed the HUD-1s knowing that Blackmore had not provided the down payments from his own personal funds.
Each of the properties for which defendants secured a mortgage loan went into foreclosure, resulting in a total loss of approximately $3,327,333, with Flagstar Bank incurring a loss of approximately $1,053,000, Lehman Brothers Bank incurring a loss of approximately $752,500, J.P. Morgan Chase incurring a loss of approximately $422,000, Suntrust Mortgage, Inc. incurring a loss of approximately $420,833, and American Brokers Conduit, a division of American Home Mortgage, Inc. incurring a loss of approximately $679,000.
If convicted, defendants’ sentences will be determined by the Court after review of factors unique to this case, including defendants’ prior criminal records, if any, each defendant’s role in the offense, and the characteristics of the violation. In all cases the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Mark S. Bennett, following an investigation by the Cleveland Offices of the Federal Bureau of Investigations and the United States Secret Service. An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.