Wells Fargo Agrees To Pay $2.09 Billion Penalty For Allegedly Misrepresenting Quality Of Loans Used In Residential Mortgage-Backed Securities
SAN FRANCISCO – Gabriela Tigges was sentenced today to 12 months and one day in prison, and ordered to pay a $20,000 fine and $208,186.78 in restitution, for her involvement in a bank fraud scheme related to a fraudulent mortgage loan application and a fraudulent mortgage loan modification application, announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
Tigges, 60, of Martinez, Calif., pleaded guilty on October 1, 2015, to two counts of bank fraud. According to the plea agreement, Tigges admitted she caused a client to submit a fraudulent mortgage loan application to World Savings Bank in approximately October 2005. She also admitted submitting a fraudulent mortgage loan modification. Tigges’ conduct eventually cost the bank $208,186.78
The loan at issue was for the purchase of Tigges’s own home by a client of her mortgage brokerage located in the East Bay, Pan American Funding Group. That mortgage loan application contained numerous misrepresentations regarding the transaction and Tigges’s client. For example, the loan application inflated Tigges’s client’s income and misrepresented the source of that individual’s down payment, which had been provided by Tigges. The application also failed to disclose that Tigges and her client had agreed on a much higher purchase price than that disclosed to the lender and that Tigges would be placing her own $275,000 lien on the property after World Savings funded the loan. Ultimately, Tigges’ client was unable to make the mortgage payments and, in early 2008, deeded the property back to Tigges.
Tigges then posed as her client to negotiate a modification of the loan with the mortgage holder, Wachovia Mortgage (which, by then, had purchased World Savings before being purchased by Wells Fargo Bank). Tigges later stopped making payments on the loan (which was still held in Tigges’ client’s name), prompting Wells Fargo to foreclose on the property in September 2010. Wells Fargo sold the property in 2011, and calculated its losses on the loan to be $208,186.78.
Tigges, was indicted by a federal grand jury on August 9, 2012. She was charged with two counts of bank fraud and one count of aggravated identity theft.
The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, U.S. District Judge, following a guilty plea on two counts in violation of 18 U.S.C. § 1344. The government agreed to move for dismissal of the aggravated identity theft charge as part of the plea agreement. Judge Gonzalez Rogers also sentenced the defendant to a three-year period of supervised release, imposed a $20,000 fine, and ordered the defendant to pay restitution to Wells Fargo in the amount of $208,186.78. The defendant has been in custody since April 2015, when she returned to the United States from Brazil after a five-year absence from this country.
Assistant U.S. Attorney Kyle F. Waldinger is prosecuting the case with the assistance of Jessica Meegan. The prosecution is the result of an investigation by the Federal Bureau of Investigation.