Businessman Pleads Guilty to Mortgage Fraud
PITTSBURGH – An Allegheny County resident pleaded guilty in federal court to a charge of bank and wire fraud conspiracy, Acting United States Attorney Soo C. Song announced today.
James Nassida, 49, of West Mifflin, Pennsylvania, pleaded guilty to one count before Senior United States District Judge Donetta Ambrose.
In connection with the guilty plea, the court was advised that Nassida owned operated a mortgage brokerage business called Century III Home Equity (Century III), which assisted borrowers in obtaining loans collateralized by real estate. At the time of the events at issue, which was between 2002 and 2008, Century III was one of the largest mortgage broker businesses in the Western District of Pennsylvania, and during the course of that timeframe brokered hundreds of millions of dollars worth of loans using more than a dozen different lenders. Many of those loans, however, involved one or more aspects.
Some of the aspects of the fraud included the following:
- Appraisals that fraudulently inflated the true value of the properties;
- Settlement statements that falsely reflected that the borrowers made substantial payments associated with the purchases of real estate;
- Settlement statements that failed to disclose secondary financing;
- Settlement statements that failed to include cash payments charged by Century III and paid by the borrowers;
- Settlement statements and closing documents that were backdated to reflect that the settlements had occurred on a date prior to the actual settlement date; and
- Various loan documents, including loan approval forms, good faith estimates, and underwriting transmittal forms, that failed to disclose secondary financing and falsely represented the combined loan-to-value ratio.
The fraud also involved misrepresentations to some of the borrowers to induce them to enter into the transactions, including concealing the fees Century III received from lenders for the borrowers’ transactions and the impact of those fees on the borrowers’ interest rates; and concealing the nature of the mortgage products, including that some of the mortgage products could negatively amortize. Lastly, the fraud also involved James Nassida’s receipt of kickbacks from the settlement company that he failed to disclose to the borrowers and lenders, as required.
James Nassida submitted multiple fraudulent documents associated with loans in which he served as a loan officer. In addition, loan officers working under his direction regularly submitted false information to lenders and borrowers. Nassida also caused the submission of fake documents to the lender in connection with his purchase of a $300,000 vacation home near Seven Springs, including the following: (1) a settlement statement that overstated the sales price; (2) a loan application that falsely stated his income and assets; and (3) fake statements from an investment company that falsely verified that he had more than $600,000 in investment when he really had about $15,000. In the loan application, James Nassida reported that he earned approximately $980,000 in 2006, but he did not even file his tax returns in 2006, and his reported taxable income in 2004 and 2005 was not even close to that figure.
Judge Ambrose scheduled sentencing for January 10, 2018. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Brendan T. Conway and Cindy Chung are prosecuting this case on behalf of the government.
The Mortgage Fraud Task Force, in conjunction with the Allegheny County District Attorney’s Office conducted the investigation that led to the prosecution of Nassida. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Allegheny County District Attorney’s Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office. The primary investigators from this case were from the Federal Bureau of Investigation and the United States Secret Service.