Conspirator In Multi-Million Dollar Mortgage Fraud Scheme Sentenced To 20 Months
San Diego, CA - United States Attorney Laura E. Duffy announced that Claudia Montes was sentenced today by U.S. District Court Judge Janis L. Sammartino to 20 months in custody for her role in a multi-million dollar mortgage fraud scheme between 2005 and 2008
. Montes and her co-conspirators obtained proceeds from approximately 80 mortgage loans by making false representations on the loan applications regarding their respective salaries and assets, among other things. The conspirators’ failure to pay back the loans resulted in defaults and the foreclosure of approximately 28 properties in San Diego and Orange Counties. At one time, the properties included approximately 25 residences in the Talmadge neighborhood of San Diego.
Montes also acknowledged that she and other straw buyers falsely claimed ownership of a co-conspirator’s bank account in order to falsely represent their assets and obtain loans for which they would not otherwise be eligible. Among the straw buyers was Montes’ sister, who she recruited to participate in the scheme. Montes admitted she also obtained home equity proceeds after securing the initial fraudulent loans, and sharing the funds among co-conspirators for personal expenses. Montes was sentenced to concurrent terms for wire fraud and conspiracy and ordered to pay over $1 million in restitution for the losses resulting from the fraudulent loans she allowed to default.
Montes worked closely with co-conspirator Kathryn Sylvester (Case No. 13CR1355-CAB), who pleaded guilty to one count of wire fraud and one count of conspiracy to commit wire fraud on January 16, 2014. Sylvester admitted she had recruited the “straw buyers” to submit the falsified mortgage loan applications for the purchase of local properties and home equity loans. She also admitted she provided false documents to support the straw buyers’ misrepresentations regarding their income and employment. Sylvester also acknowledged that she made similar misrepresentations to obtain loans from private individuals. Although Sylvester often promised she would “flip” a number of the properties for a profit, she systematically drained equity from the properties for her own benefit, resulting in over $5 million in losses to institutional and private lenders. Sylvester is scheduled to appear before U.S. District Court Judge Cathy Ann Bencivengo on April 1, 2014 for sentencing.
Other co-conspirators included Tad Lent, Roderick Michener, and Timothy Shannahan who are all residents of San Diego. Michener pleaded guilty on April 4, 2013, to conspiring with Sylvester to commit bank fraud (Case No. 13CR1130-CAB). Michener admitted that he permitted co-conspirators to claim an ownership interest in his bank account in order to include the account as an asset on their respective mortgage loan applications. He also admitted transferring fraud proceeds to Sylvester. Michener is scheduled to be sentenced before District Court Judge Cathy A. Bencivengo on March 14, 2014.
Lent pled guilty to conspiring with Sylvester to submit falsified loan applications to mortgage lenders by misrepresenting the amount of his assets (Case No. 12CR3744-L). Lent entered his guilty plea on January 28, 2013, and is scheduled to be sentenced before District Court Judge M. James Lorenz on March 3, 2014.
Shannahan admitted conspiring with Sylvester between January 2007 and May 9, 2008, to fraudulently induce lenders to fund mortgage loans (Case No. 13CR1650-L). Among other things, Shannahan falsely claimed on a mortgage loan application that he earned $50,000 per month in order to obtain mortgages for a residence in La Jolla. Shannahan entered his guilty plea on May 18, 2013 and is scheduled to be sentenced before Judge Lorenz on March 10, 2014.
United States Attorney Duffy said, “Crimes like this helped contribute to the housing crisis in 2008, from which we are only now beginning to recover. Sentences such as the one imposed today will hopefully deter others from playing games with the home loan industry and prevent further financial crises.”
|DEFENDANT||Case No. 13CR1313-JLS|
Count 1: Title 18, United States Code, Section 1349 (conspiracy to commit wire fraud and bank fraud); Maximum penalty: 30 years of custody; $1,000,000 fine
Count 2: Title 18, United States Code, Section 1343 (wire fraud); Maximum penalty: 20 years of custody; $250,000 Fine
Federal Bureau of Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.