Two Individuals Indicted And Arrested For False Statements In Loan Applications
Defendants Face A Forfeiture Allegation Of $296,555.66
San Juan, Puerto Rico – Two individuals have been charged in a one-count indictment unsealed today and returned by a grand jury in San Juan, Puerto Rico on December 22, 2015, said U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico announced today. These charges stem from a scheme used by the defendants to obtain money from mortgage lending institutions. The investigation was conducted by the Department of Homeland Security (HSI), with the collaboration of the Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) and the Housing and Urban Development-Office of Inspector General (HUD-OIG).
Defendants Edgar A. Reyes-Colón and Francisco Quintero-Peña are charged with making false statements in loan applications. The investigation revealed that as part of the scheme and artifice to defraud, the defendants, through straw buyers, purchased a property by obtaining mortgage loans from a federally insured financial institution in amounts substantially exceeding the selling price of the property. The excess amount of the loan was “kickbacked” to the defendants, and then they would default on payment of the monthly mortgage premiums. In order to ensure the approval of the loan, the participants created and submitted false supporting documentation along with the loan application, i.e.: financial statements, bank statements, employment verification letters, tax returns, among others.
The defendants, aiding and abetting each other, knowingly made or caused to be made, material false statements to Doral Bank for the purposes of obtaining mortgage loan numbers 3006810889 & 3006804465 for a total amount of $560,000.00 for the purchase of property located at 131 Fairway Street, Palmas Plantation Development, Humacao, P.R. 00791. The false statements included, but are not limited to, the following: (i) in the final Uniform Residential Loan Applications for both loans that an individual had a bank account at Santander Bank ending in 8132 with a balance of $33,892.11, when in truth and in fact, as the defendants well knew, this bank account did not exist; (ii) in the final Uniform Residential Loan Application for both loans that the individual had a monthly bas income of $18,818.00 from a business she owned called K’ricias Boutique, when in truth and fact, as the defendants well knew, these statements were false; (iii) in the HUD-1 for loan #3006810889 that the individual paid closing costs of $4,114.57 when in truth and in fact, as the defendants well knew, this statement was false; and (iv) in the HUD-1 for loan #3006804465 that the individual paid the closing costs of $22,166.48, when in truth and in fact, as the defendants well knew, this statement was false.
The defendants also supplied false and fraudulent account statements, financial statements, and a letter indicating that the individual’s then existing primary residence was producing rental income, when in truth and fact, as the defendants well knew, this was false.
This case is being prosecuted by Assistant US Attorney Nicholas Cannon. The maximum penalties for these offenses are 20 years of imprisonment, and fines up to $1 million. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.