U.S. Department
of Justice
Defendants Sentenced To Prison And Ordered To Pay $8.5 Million To Victims Of Mortgagte-Fraud Scheme
PANAMA CITY, FLORIDA – Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced that earlier today, United States District Judge Richard Smoak ordered defendants, who were convicted several months ago for their roles in a complicated mortgage-fraud scheme, to pay more than $8.5 million to victims of the scheme. Avinie Maurice Bates, III, 41, of Miami; Jill Beth Newman Zuravel, 47, of Boynton Beach; Alan Jay Nathan, 60, of Boca Raton; and Meredith Lelann King, 38, of Destin were held jointly responsible for repaying the victims $8.5 million in losses caused by the scheme, and Joann V. Walter, 56, of Parkland was held jointly responsible for repaying $2.4 million of the losses.
The evidence presented in the case showed that Bates held himself out as a real-estate investor with a Miami investment company, known as Right Choice Housing, LLC. Zuravel acted as the attorney for Right Choice Housing. Nathan owned Mortgage Bankers of America Group, Inc., a mortgage company located in Boca Raton, and Walter was a mortgage broker with Mortgage Bankers of America. King was a closing agent employed by Blue Dolphin Title, LLC, a title company located in Panama City Beach.
The evidence further showed that, in 2005 and 2006, the defendants obtained over $9 Million in mortgages from lenders to purchase ten properties in Panama City and Panama City Beach. Bates found properties, entered into sales contracts to purchase the properties at one price (the “lower sales price”), and listed the buyer on the contracts as “Right Choice Housing, LLC and/or assigns.” Then Bates, Zuravel, Nathan, and Walter convinced individuals in the Miami area to release their credit information in exchange for up to $30,000. Once these individuals (the “straw buyers”) were in place, Zuravel prepared the legal documents to assign the sales contracts from Bates and Right Choice Housing to the straw buyers at a much higher price (the “higher sales price”).
Once these assignments were made, Nathan and Walter prepared loan applications for the straw buyers, in which they falsely inflated the straw buyers’ income, employment, bank account balances, and intent to reside at the properties – all for the purpose of fraudulently qualifying the straw buyers for the millions of dollars in loans.
After the loans had been approved by the lenders, King conducted the property closings at Blue Dolphin Title in Panama City Beach. At the closing, she used the difference between the lower and higher sales prices to cover the straw buyers’ required down payments and then paid the rest to Bates, Zuravel, and Nathan. Of that balance, King wired over $1.2 million to Bates or to companies owned by Bates, such as Gold by Gold and Bates Enterprises.
By the end of 2006, all of the mortgages were in default, and all of the properties have since been foreclosed upon or are in foreclosure proceedings.
At the sentencing hearings for the defendants, held in September, the Court determined the following terms of imprisonment for each defendant, but reserved ruling on the issue of restitution until a hearing could be held:
Bates was sentenced to just over 12 years in prison.
Zuravel, who cooperated in the case, was sentenced to 4 years in prison.
Nathan, who cooperated in the case, was sentenced to just under 3 years in prison.
King, who cooperated in the case, was sentenced to 2½ years in prison.
Walter, who cooperated in the case, was sentenced to 20 months in prison.
Restitution Hearing
The Court held an evidentiary hearing regarding the restitution a week ago, but reserved ruling until today. The Court ordered the defendants Bates, Zuravel, Nathan and King to pay a total of
8,596,595.24 in restitution to the victims on all ten properties as set forth below, and ordered Walter to pay a total of $2,409,462.38 for her involvement with three of the properties. At the hearing, the Government admitted dozens of exhibits reflecting the outstanding balances on the mortgages, as well as the price for which the properties were sold after foreclosure or current taxable value to establish the amount owed to the victim financial institutions and sellers. The Government’s evidence showed that, to date, the total loss on all of the mortgages was approximately $12 million, and the fair market value of the properties was just under $3 million.
Property | Restitution Ordered | Victim |
23001 Front Beach Road | $610,489.42 | JP Morgan Chase |
$486,865.63 | Aurora Loan Services | |
21222 Front Beach Road | $747,704.42 | American Home Mortgage Servicing Inc. |
1501 Trout Lane | $421,268.54 | Aurora Loan Services |
483 Wahoo Road | $822,957.64 | HSBC Bank |
1522 Trout Lane | $1,310,350.58 | Ocwen Loan Servicing, LLC |
2729 Kings Road | $474,640.15 | Bank of America |
4452 Ashland Road | $1,112,849.77 | Selene Finance |
2843 Longleaf Road | $895,394.50 | Selene Finance |
342 Fairway Boulevard | $453,184.59 | Deutsche Bank |
TOTAL | 8,596,595.24 |
“This case is a stark reminder of the lengths to which greed-motivated criminal minds will go,” said U.S. Attorney Marsh. “At a time when the economy and the real-estate market were on a downward trajectory, these defendants were not afraid to make a bad situation worse. In cases driven by greed, restitution to the victims is a critical part of the penalty paid by these offenders.” Ms. Marsh also expressed her deep gratitude to the work of the Florida Office of Financial Regulation – Bureau of Financial Investigations, the Florida Department of Financial Services - Division of Insurance Fraud, and the U.S. Postal Inspection Service, whose excellent work led to the results in this case.
The case was prosecuted by Assistant U.S. Attorney Gayle Littleton.
Panama City Beach, Florida