Mortgage Loan Officer Is Sentenced To More Than Seven Years In Federal Prison For Role In $1.8 Million Fraud Scheme
DALLAS — David Joe Cano, was sentenced this morning by Chief U.S. District Judge Sidney A. Fitzwater to 87 months in federal prison and ordered to pay $1,795,125 in restitution for his nearly two-year role in a scheme to launder the proceeds of mortgage fraud. Judge Fitzwater ordered Cano, who, according to a court order setting conditions for his release, is a resident of Arlington, Texas, to surrender to the Bureau of Prisons on January 7, 2014. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Cano, 41, pleaded guilty in November 2012 to one count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity. According to documents filed in the case, Cano was a mortgage loan officer at 1st Capital Investment located in Richardson, Texas. From January 2006 to November 2007, Cano, along with other coconspirators, operated a scheme to obtain fraudulent loans from Bank of America and IndyMac Bank, as well as GreenPoint Mortgage Funding, Inc. and WMC Mortgage Corporation, both located in California, and Everett Financial Inc. dba Supreme Lending and America Homekey, Inc., both in Dallas. Cano and his conspirators then laundered the money from those loans back to themselves using shell corporations such as Comex International Korea Corporation, Eagle’s Marc Enterprises, Inc. and Sunko Construction.
To defraud the banks and mortgage lenders, Cano and his conspirators selected newly constructed or distressed properties whose value could be inflated without raising lenders’ suspicions. Cano and company then recruited individuals with good credit scores to act as loan applicants for the purchase of the properties and paid them to apply for loans using applications that falsely inflated the applicant’s income and assets. The applicants were deceitfully promised that the properties would be leased until they were sold at a profit and that the applicants would receive regular payments from the rental income that would be sufficient to repay their loans until the properties sold. In reality, the applicants were left with unpaid loans that ruined their credit scores.
“Today’s sentence is a strong reminder how serious our courts consider mortgage fraud,” said Madie M. Branch, Acting Special Agent in Charge, Dallas Field office, IRS Criminal Investigation. “IRS Criminal Investigation is committed to ‘following the money trail’ to ensure that those who engage in mortgage fraud are brought to justice.”
As charged in the Information, the scheme focused on seven properties located at: St. George Place in DeSoto, Texas; Golden Pond Drive in Cedar Hill, Texas; Summerfield Court in Fairview, Texas; Tangleglen Drive in Dallas; Roma Court in Allen, Texas; Avondale Drive in Murphy, Texas; and Stephenville Drive in Frisco, Texas.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The case was investigated by IRS Criminal Investigation with assistance from the U.S. Postal Inspection Service and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney Walt M. Junker was in charge of the prosecution.