23 Individuals Indicted And Arrested For False Statements In Loan Applications And Bank Fraud
Defendants face a forfeiture allegation of $5,394,104.00
San Juan, Puerto Rico – Twenty-three individuals, including street brokers, loan officers, realtors, appraisers, straw buyers and sellers have been charged in a 15-count indictment unsealed today and returned by a grand jury in San Juan, Puerto Rico on September 4, 2013, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico announced today. These charges stem from a scheme used by the defendants to obtain money from mortgage lending institutions.
The investigation revealed that false statements and documents were submitted to mortgage lending institutions to qualify straw buyers for mortgage loans. The false and fraudulent statements supplied by these defendants were: bank account statements, income tax withholding statements, rental contracts, certification forms, and employment certifications, to mention a few. Once the bank approved the loan and disbursed the money, the co-conspirators would then divide the profits from the seller’s proceeds.
According to the indictment, the defendants aiding and abetting each other, knowingly made or cause to be made material false statements to various financial institutions for the purpose of influencing the action of other financial institutions, in connection with a loan application to obtain mortgage loans. The financial institutions are: Banco Santander de PR, Cooperativa de Ahorro y Crédito Oriental, Cooperativa Abraham Rosa, Doral Bank, First Bank of PR, Banco Bilbao Vizcaya Argentaria of PR, and RG Premier Bank of PR.
The defendants and their roles in the scheme are as follows:
- Defendant Wilson Álvarez-Luna was an individual engaged in the business of purchasing and selling real properties. At times he recruited straw buyers for transactions included herein.
- Defendants Arístides Reyes-Ayala; Benjamín García-De Villalobos; Joel Rodríguez-Santiago; Vivette Rodríguez-Navedo; and Ivyleslie Caraballo-Pastrana, were loan officers and supervised loan officers who participated in the mortgage loan origination, processing and approval process in connection with some of the loans included in the indictment.
- Defendants Álvarez-Luna; Reyes-Ayala; Guillermo Castro, aka “Reynaldo Vanderhorst Meléndez;” Ramón Álvarez-Lombana; José Rosario-Ruiz, aka “Chino;” Benneth Dávila-Ochoa; Moisés Rolón-Santiago; Orlando Pérez-Juarbe; Cesar Berroteran-Cadenas; Anny Raquel Reyes-Cruz; Gerardo Vergara-Ramírez; and Edwin Girald-Torres participated in real estate transactions as either seller or straw buyer and applied and obtained mortgage loans.
- Defendants Antonio Sotomayor-Ramírez and Henry Schettini-Gutiérrez were real property appraisers.
- Defendants Álvarez-Luna; Jesús Cuadrado-Rodríguez; Beker De Jesus-Eckardt; Ángel Daniel Bermúdez-Saez; Onix Morales-Torres; Berroteran-Cadenas; and José Cabrera-Beuchamp, aka “Pepe” acted as facilitators who would recruit straw buyers or refer properties and property owners to participate in some of the fraudulent loan transactions.
- Defendants Morales-Torres and José Cabrera-Beuchamp, aka “Pepe,” were real estate agents.
“This indictment demonstrates the commitment of the Department of Justice and the U.S. Attorney’s Office in Puerto Rico to ensure the integrity of the financial and banking system,” said Rosa Emilia Rodríguez Vélez, U.S. Attorney for the District of Puerto Rico. “The investigation and prosecution of financial crimes is one of the top priorities of the U.S. Department of Justice. Mortgage fraud is a serious issue for the banking industry and for homeowners who helplessly watch as their property values decrease, and foreclosure signs and abandoned properties take over their neighborhoods.”
Lester Fernández, Special Agent in Charge of this Region for the US Department of Housing and Urban Development – Office of Inspector General stated: “It is always disturbing when industry professionals who have fiduciary responsibilities and are expected to act as honest brokers exploit federally funded programs. HUD-OIG will continue to partner with prosecutors, law enforcement and audit agencies to aggressively pursue those engaged in activities that harm federal housing programs.”
Carlos Cases, Special Agent in Charge of the FBI said: “Mortgage fraud isn’t a victimless crime. It threatens the financial health of our communities, and leaves lenders burdened with bad loans and neighborhoods with abandoned and deteriorating property. FBI will continue to utilize its financial investigative expertise to aggressively investigate criminal activities that attack our financial system.”
This case is being prosecuted by Assistant U.S. Attorney Mariana Bauza. The case was investigated by U.S. Department of Housing & Urban Development Office of Inspector General (HUD-OIG), Federal Bureau of Investigation (FBI), Puerto Rico Office of the Commissioner of Financial Institutions, Puerto Rico Police Department, Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and the Puerto Rico Treasury Department, Tax Crime Division.
The maximum penalties for these offenses are 30 years of imprisonment, and fines of $1 million. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.