Owner Of Mortgage Elimination Company Found Guilty In White Plains Federal Court Of $38 Million Fraud Conspiracy
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JACQUELINE GRAHAM was convicted at trial on Wednesday, June 12, 2019, of participating in a conspiracy to commit bank fraud, wire fraud, and mail fraud in connection with a fraudulent debt-elimination scheme to defraud homeowners and banks. GRAHAM was found guilty of the one count she faced after a two-week trial before U.S. District Judge Nelson S. Román.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Jacqueline Graham preyed on vulnerable homeowners who could not afford their mortgage payments during a time of crisis in the housing market. Because of her greed, these homeowners ended up financially worse off than when they found her. We will continue to work with our law enforcement partners to bring to justice those who victimize the vulnerable.”
According to the Indictment in the case and the evidence presented at trial:
From at least 2011 to at least 2012, JACQUELINE GRAHAM partnered with Bruce Lewis and John Ruzza in operating the Valhalla, New York-based Terra Foundation (“Terra”) – which was originally known as the Pillow Foundation – which held itself out as a business that would investigate and eliminate mortgage loans in exchange for fees, soliciting clients who were having difficulties making their mortgage payments. In fact, however, Terra engaged in a wide-ranging scheme to defraud clients, county clerks’ offices, and banks.
The fraudulent scheme, which was created by GRAHAM and Lewis, involved Terra performing “audits” of clients’ mortgages, sending pseudo-legal paperwork to the banks and/or lenders holding the mortgages, and ultimately filing purported mortgage discharges with the relevant county clerks’ offices, which discharges were signed by Lewis or other co-conspirators, claiming falsely to represent the banks and/or mortgage lenders. As a result, anyone doing a title search for one of Terra’s clients would see that the client’s mortgage had been satisfied. The mortgages had not, however, been discharged, and the mortgages were eventually reinstated, after the clients paid their fees.
In order to effectuate the scheme, GRAHAM, Lewis, and Ruzza involved others, including Rocco Cermele, who was Terra’s director of operations and who recruited clients, among other duties; Paula Guadagno, who did real estate title work for, and filed discharges on behalf of, Terra; and Anthony Vigna, a lawyer and CPA who worked in Terra’s offices.
To profit from their scheme, GRAHAM and her co-conspirators charged various fees to Terra’s clients.
In total, GRAHAM and her co-conspirators filed over 60 fraudulent discharges in Westchester and Putnam Counties in New York, and in Connecticut. The fraudulent discharges claimed to discharge mortgages with a total loan principal of nearly $38 million.
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GRAHAM, 53, formerly of Levittown, Pennsylvania, was convicted of one count of conspiracy to commit bank fraud, wire fraud, and mail fraud. The count carries a maximum sentence of 30 years in prison.
Lewis, 67, formerly of Alaska and Washington State, pled guilty to one count of wire fraud relating to the Terra scheme, which carries a maximum sentence of 20 years in prison.
Vigna, 61, of Thornwood, New York, pled guilty to one count of participating in a conspiracy to commit bank fraud, wire fraud, and mail fraud relating to the Terra scheme, which carries a maximum sentence of five years in prison.
Cermele, 56, of Yonkers, New York, pled guilty to one count of participating in a conspiracy to commit mail, wire, and bank fraud, and one count of wire fraud, each relating to the Terra scheme, each of which carries a maximum potential sentence of 30 years in prison, and three additional counts of wire fraud relating to other crimes, each of which carries a maximum potential sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the court.
All defendants are awaiting sentencing.
Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation. Mr. Berman also thanked the Office of the Westchester County District Attorney’s Office and the Department of Housing and Urban Development for their assistance in the case.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys David Felton, Michael Maimin, and James McMahon are in charge of the prosecutions.