Butler Mortgage Broker Charged In Mortgage Fraud Scheme
PITTSBURGH, Pa. - A resident of Butler, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of conspiracy, bank fraud, wire fraud, and money laundering, United States Attorney David J. Hickton announced today.
The seven-count indictment named Jeffrey Garbinski, 43.
According to indictment presented to the Court, Garbinski operated a mortgage broker business called Main Street Mortgage Services, Inc. which did business as Asset Mortgage and Financial Services, Inc.. Garbinski also operated the Closing Company of PA (Closing Company), which was an entity that provided real estate settlement services in which it received funds from lenders with instructions about how to distribute the funds, including the paying off of liabilities associated with the collateral underlying with the transactions.
The indictment alleged that Garbinski, through Asset Mortgage and Financial Services, Inc. and the Closing Company defrauded lenders by submitting settlement statements that falsely represented that funds received from the lender were used to pay liabilities associated with the collateral, therefore placing the lender in the first lien position. In fact, funds that were supposed to be used to pay the liabilities associated with the collateral were used for the personal benefit of the Garbinski and a co-conspirator, and were used by Garbinski to invest in an unrelated business. The indictment further alleges that Garbinski and a co-conspirator concealed the illicit use of the funds from the title insurance company which conducted an audit of the Closing Company by, among other things, providing a fraudulent bank statement for the Closing Company that concealed the illicit use of the funds.
The law provides for a maximum total sentence of 170 years in prison, a fine of $4,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Mortgage Fraud Task Force conducted the investigation leading to the indictment in this case. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.