FINAL DEFENDANTS SENTENCED IN SEVEN-PERSON MORTGAGE FRAUD CONSPIRACY
THURSDAY December 01, 2011
Public Affairs Officer
Six are members of the same family
CINCINNATI – Six family members and an employee of one of the companies they owned have been sentenced in U.S. District Court for a mortgage fraud scheme involving nine properties they bought and sold for their own use between 2004 and 2009.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Dugan T. Wong, Assistant Inspector in Charge, U.S. Postal Inspection Service, announced the sentences today. All defendants were sentenced by Chief U.S. District Judge Susan Dlott.
Debbie Sferrazza, 47, of West Chester, was sentenced today to a total of 46 months in prison followed by three years of supervised release. She pleaded guilty to one count of conspiracy to commit wire and mail fraud, one count of money laundering, and three counts of filing false income tax returns. She was ordered to pay $384,537 in restitution to the lenders she defrauded and $151,671.48 to the IRS.
Between 2004 and 2009, Debbie Sferrazza started several mortgage brokerage companies in the area, including Alpha Mortgage Lending, LLC; Alpha Mortgage Exchange, LLC; S.D.S. Processing LLC (also known as S.D.S. Inc.); and Target Loan Packaging (also known as Target Loan Processing). Over the years, she used the different companies to help perpetrate the fraud and avoid detection of the fraud. She was the sole owner and operator of the companies and their final office was operated out of her house.
“The Sferrazza brokerage companies provided loan services for numerous clients over the years that involved allegations of fraud,” Assistant U.S. Attorneys Timothy Mangan and Jennifer Barry told the court in a sentencing memorandum filed with the case. “However, out of practical necessity, the indictment focused strictly on nine properties that were bought and sold for personal gain and use by the Sferrazza family.” All the properties involved eventually landed in foreclosure.
Debbie Sferrazza’s husband, Salvatore Sferrazza, 72, of West Chester, was sentenced today to three years of probation to include ten months of home confinement. Salvatore Sferrazza pleaded guilty to one count of conspiracy to commit wire and mail fraud and one count of money laundering. He was ordered to pay restitution of $71,709.80 to the lenders.
Heather Ashurst, 28, of West Chester, was sentenced June 29, 2011 to two years of probation and ordered to pay $99,406.96. She pleaded guilty to one count of conspiracy to commit wire and mail fraud.
Whitney Bonapfel, 23, of Cincinnati, Debbie Sferrazza’s daughter, was sentenced on June 29, 2011 to two years of probation for making a false statement or report to HUD (a misdemeanor offense).
James Ashurst, 28, of West Chester, was sentenced on June 29, 2011 to one day in jail, three years of supervised release and ordered to pay $99,406.96 in restitution. James Ashurst pleaded guilty to one count of conspiracy to commit wire and mail fraud, and one count of money laundering. He is the husband of Heather Ashurst and a son of Debbie Sferrazza.
Keiron Ashurst, 45, of Fairfield, was sentenced on June 30, 2011 to 12 months and one day in prison for conspiracy to commit wire and mail fraud. He was ordered to pay $138,500 in restitution. He is the brother of Debbie Sferrazza, and also a citizen of Great Britain who may face immigration consequences.
Tabatha Sturgill, 36, of Hamilton, who was employed by Debbie Sferrazza, was sentenced on June 30, 2011 to 12 months and one day in prison for conspiracy to commit wire and mail fraud and for filing a false income tax return. She was ordered to pay $384,537.18 in restitution.
According to court documents, James and Heather Ashurst lived in the houses, worked for Debbie Sferrazza at the mortgage businesses, and were involved in the laundering of funds. Salvatore Sferrazza was often present at and involved in the mortgage business and laundering of funds, but was not officially an employee. Keiron Ashurst did not work at Debbie Sferrazza’s mortgage business, but his home was fraudulently bought and sold twice in order to pull money out of the loans and save the property from foreclosure and divorce proceedings. Whitney Bonapfel did not work for the mortgage business or live in the subject homes, but she was listed as the purchaser for a property where James and Heather Ashurst eventually lived.
“The fraud scheme was fairly simple in nature, but extensive and persistent,” Mangan and Barry wrote. “The scheme involved the submission of false and fabricated supporting documentation to mortgage lenders. The supporting loan documents often included fraudulent Verifications of Employment, Verifications of Deposits, W-2 forms, pay stubs, Social Security payment letters, HUD-1 statements, and/or banking statements. The false Verifications of Employment and Verifications of Deposit for the borrower typically misrepresented not only the borrower’s information, but also the verification process itself.”
In addition to the FBI, IRS, and Postal Inspection Service, agencies participating in the Greater Cincinnati Mortgage Fraud Task Force include the Ohio Attorney General’s Office, the U.S. Housing and Urban Development Office of Inspector General, the Cincinnati Police Department, the U.S. Secret Service, the Springdale Police Department, the Warren County Prosecutor’s Offfice, Hamilton County Prosecutor Joe Deters’ Office, the U.S. Attorney’s Office in the Eastern District of Kentucky, the West Chester Police Department, the Middletown Police Department, Hamilton County Sheriff Simon Leis, the FDIC, and the Ohio Department of Commerce Division of Financial Institutions.
“This type of cooperative investigation is the most effective way to fight the problem of mortgage fraud,” Stewart said. “I want to commend all the Task Force members, as well as Assistant U.S. Attorneys Mangan and Barry, who prosecuted the case.”