Pair Of Friends Charged In Scheme To Defraud Distressed Homeowners
PHILADELPHIA – An indictment, unsealed today, charges two friends, Daniel Sheehan, 41, of Gloucester City, NJ, and John Hoban, 42, of Bellmawr, NJ, in a scheme to defraud distressed homeowners seeking help out of more than $400,000, announced United States Attorney Zane David Memeger. The pair is charged with wire fraud conspiracy and eight counts of wire fraud. Sheehan is additionally charged with 18 wire fraud counts and one count of interstate transport of stolen property. As a result of the alleged scheme, more than 110 people were defrauded, several of whom lost their homes.
According to the indictment, between September 2012 and February 2015, Sheehan, a mortgage modification professional, represented to a dozen clients that he could help them modify their mortgages through the Home Affordable Mortgage Program (“HAMP”) or the Home Affordable Refinance Program (“HARP”). Instead, it is alleged, Sheehan: took fees from his clients without ever submitting the loan modification paperwork he promised; deceived his clients by representing to them that he had secured a new mortgage for them; directed many of his clients to make their mortgage payments to him until their new loan paper work arrived; had Hoban pretend to be a bank representative to lull the client into a false sense of security; and used his clients’ mortgage payments for his own purposes rather than that for which those payments were intended. Several of Sheehan’s clients’ homes went into foreclosure and at least two went to Sheriff’s sale.
According to the indictment, LS, who owned a home in Northfield, NJ, contacted Sheehan after he lost his job and couldn’t make his mortgage payments. LS and his wife had lived in the home for years and had raised their children there. In August of 2013, Sheehan told LS that he could get him a loan modification that would reduce both his principal and his interest rate. LS paid Sheehan his requested fee of $1,700. In February of 2014, Sheehan informed LS that he saw LS’s offer and that LS should have it in his hands in the next 24 to 48 hours. Although LS’s house was scheduled to be sold as a Sherriff’s sale on several occasions, Sheehan allegedly reassured LS that he would take care of it. In May of 2014, a man came to LS’s and told LS that he was going to purchase the house at Sherriff’s sale. When LS told Sheehan, Sheehan instructed LS to ignore the man. On July 1, 2014, Sheehan told LS that the modification had been approved, that his house had not been sold, and presented him with an agreement to sign. He told LS that he would have to make trial payments of $1,525.55 for the next three months and he instructed LS to make the payments out to him and that he would place the payments in an escrow account. In September of 2014, Sheehan allegedly gave LS a document that purported to be an order from a judge allowing LS to stay in his home until September 23, 2105. On November 5, 2014, LS appeared in court where he learned from the judge that the document provided to him by Sheehan was a forgery. On November 5, 2014, LS and his family were physically evicted from their home.
In another instance, according to the indictment, when a client of Sheehan’s started receiving foreclosure notices from her bank, Sheehan told her that a representative with the new mortgagor would resolve the issue. Sheehan then, it is alleged, had Hoban pose as that bank representative, convincing the homeowner that the foreclosure notice would be “frozen” and that she would receive a packet from the new bank in 30 days. Meanwhile, no application for a loan modification had ever been filed on that homeowner’s behalf.
“This type of mortgage fraud is very personal. The defendants cheated their homeowner victims out of hundreds of thousands of dollars by preying on their emotional and financial vulnerabilities,” said Memeger. “The financially struggling victims viewed the defendants as life savers who would help them preserve their most valuable investment -- their homes. Instead, the defendants betrayed their victims, sank them into deeper debt, and, in some cases, left them homeless.”
“It’s hard to overstate the cruelty displayed by these defendants,” said FBI Special Agent-in-Charge William F. Sweeney, Jr. “Portraying themselves as white knights who would help families keep their homes, pocketing their money – knowing, all the while, their unsuspecting victims would soon be homeless. Their actions are unconscionable.”
It is further alleged that between April 2014 and February 2015, Sheehan transported, transmitted, and transferred in interstate and foreign commerce, goods, wares, securities, and money of the value of $5,000 or more, taken by fraud.
If convicted, each defendant faces a maximum statutory sentence of 20 years in prison, possible fines, and up to three years of supervised release. Sheehan would be required to pay a $2,900 special assessment; Hoban, a $900 special assessment. A notice of forfeiture for $470,000 is also attached.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Paul Shapiro.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.