U.S. Department of Justice
United States Attorney
District of Rhode Island
October 2, 2009
Former Johnston woman pleads guilty to $1.7 million mortgage fraud scheme
Lisa Torres, 40, formerly of Johnston, pleaded guilty today to a $1.7 million mortgage fraud scheme in which she purchased properties that had recently been foreclosed upon, and then used the names of straw purchasers in sham sales to finagle mortgage financing.
United States Attorney Peter F. Neronha, Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation, and Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, jointly announced the guilty plea, which Torres entered before Chief U.S. District Court Judge Mary M. Lisi in U.S. District Court, Providence.
At the plea hearing, Assistant U.S. Attorney Lee H. Vilker said the government could prove that, between October 2007 and June 2008, Torres purchased nine residential properties in Providence. She then enlisted the aid of others, some willing participants, others unwitting dupes, to arrange sham sales of the properties at inflated prices in order to obtain mortgage financing. The loan proceeds went to Torres, the purported seller of the properties, so she profited the difference between what she had paid for the properties, about $1.1 million, and what she purportedly sold them for, about $1.7 million.
Torres used a variety of ruses to enlist the aid of the sham purchasers, suggesting to them that they were not really buying the properties and that Torres would actually service the mortgages. However, Torres failed to service the mortgages and in the process defrauded the lending institutions out of approximately $675,000.
To secure the financing, Torres engaged the services of coconspirators, who fabricated W-2 forms, pay stubs, and bank account balances to misrepresent the employment status and credit worthiness of the sham buyers.
Torres is currently serving a federal prison sentence for obstruction of justice, conspiracy and making false statements, a case that was prosecuted in U.S. District Court, Massachusetts. She is due to be released on January 26.
The Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation conducted the investigation.