Senior Manager Sentenced In Manhattan Federal Court To 16 Years In Prison For Helping To Orchestrate Multimillion-Dollar Mortgage Modification Fraud Scheme
Thousands of Homeowners Victimized in Largest Mortgage Modification Scheme Ever Charged
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DIONYSIUS FIUMANO, a/k/a “D,” was sentenced in Manhattan federal court to 16 years in prison for helping to orchestrate a massive mortgage modification scheme through which he and his co-conspirators defrauded thousands of American homeowners out of a total of approximately $31 million. FIUMANO was convicted on May 3, 2016, following a jury trial before U.S. District Court Judge John F. Keenan, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “At a time when many homeowners needed help the most, Dionysius Fiumano and his co-defendants claimed to be the mortgage modification lifeline they needed. But instead, Fiumano’s company preyed on and victimized the desperate homeowners, taking their money and doing nothing to actually help. Thankfully, Fiumano and his co-defendants have been put out of the swindling business and put behind bars.”
According to the Indictment and other filings in Manhattan federal court, and the evidence presented at trial:
FIUMANO was the general manager of sales at Vortex Financial Management, Inc., a/k/a Professional Marketing Group, a/k/a Professional Legal Network (“PMG”), an Irvine, California-based company that offered purported “mortgage modification” services. Specifically, PMG convinced homeowners that it would work with their lenders to modify the terms of the homeowners’ mortgages to make them more affordable. In that capacity, FIUMANO oversaw PMG’s sales staff of approximately 65 telemarketers and managers.
From November 2011 through May 2014, FIUMANO, while working with and through his sales staff, perpetrated a scheme to defraud homeowners in dire financial straits who were seeking relief through mortgage modifications. Through a series of false and fraudulent representations, FIUMANO and his staff duped thousands of homeowners into paying thousands of dollars each in up-front fees in exchange for little or no mortgage modification service. In total, through their scheme, FIUMANO and his co-conspirators obtained approximately $31 million from more than 30,000 victim homeowners throughout the United States.
As part of the scheme, PMG purchased thousands of “leads,” consisting of the names, addresses, and other contact information of homeowners who had fallen behind in making mortgage payments on their homes. At FIUMANO’s direction, PMG sales staff then solicited these customers by email and by phone, and, using a series of fraudulent misrepresentations, tried to lure them into sending money to PMG for purported mortgage modifications. FIUMANO, through his sales staff, regularly lied to homeowners, including by saying that (a) the homeowners were retaining a “law firm” and an “attorney” who would complete a mortgage modification application and negotiate aggressively on the homeowners’ behalf with banks to modify the terms of the homeowners’ mortgages; (b) the homeowners had been “pre-approved” or “pre-qualified” to receive a mortgage modification; (c) PMG employed underwriters who would calculate and guarantee the homeowners a new, modified rate and monthly mortgage payment; and (d) the up-front fees paid by the homeowners would be paid directly to the homeowners’ lenders, to the attorneys to pay their fees, or to pay the purported “hard costs” of the modification. In truth and in fact, and as FIUMANO well knew, all of these representations were false.
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In addition to his prison term, FIUMANO, 45, of Irvine, California, was sentenced to three years of supervised release, and ordered to pay forfeiture and restitution of $11,975,404.
Four other co-conspirators have also been convicted for their roles in the scheme:
Pedram Abghari, a/k/a “Ted Allen,” 39, of Irvine, California, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of misprision of a felony, which carries a maximum sentence of three years in prison.
Justin Romano, 42, of Blue Point, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
Mahyar Mohases, a/k/a “Christian Mohases,” 34, of Irvine, California, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
Johnny Linderman, a/k/a “Johnny Lamboy,” 55, of Irvine, California, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
Abghari, Romano, Mohases, and Linderman are scheduled to be sentenced by Judge Keenan on November 21, 2016.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the Office of the Special Inspector General for the Troubled Asset Relief Program.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward A. Imperatore and Patrick Egan are in charge of the prosecution.