MORTGAGE FRAUD INDICTMENTS HIT LAS VEGAS
“We’re not even near half,” Nevada’s U.S. Attorney Dan Bogden said, dropping an anvil of a hint that more indictments and arrests are anticipated in the government’s crackdown on mortgage fraud, as described below in the two Las Vegas Review-Journal articles.
Saturday, Jun. 19, 2010
Copyright © Las Vegas Review-Journal
Four plead not guilty in mortgage fraud cases
By CARRI GEER THEVENOT
LAS VEGAS REVIEW-JOURNAL
Four men who were indicted this week in connection with Operation Stolen Dreams, a nationwide initiative aimed at combating mortgage fraud, appeared before a federal judge in Las Vegas on Friday.
All four defendants, who were indicted in separate cases, were released after pleading not guilty. They were among the 72 people charged this week in U.S. District Court in Las Vegas as part of the nationwide crackdown.
The crackdown targeted complex schemes involving straw buyers, double escrows and diversions from mortgage loans for personal use, according to federal authorities who describe Las Vegas as ground zero for mortgage fraud.
Bradley Tubin, 55, Phet Loi Naovarath, 34, Oudum Somee, 43, and real estate agent Curtis Briley Jr., 74, each answered questions from U.S. Magistrate Judge Robert Johnston during the routine hearing.
Tubin has retained Las Vegas attorney Mace Yampolsky, a childhood classmate from Massachusetts, to represent him.
“I grew up with him,” Yampolsky said after the hearing. “He’s been a very successful businessman” and has lived in Las Vegas for several years.
Tubin was indicted Wednesday on one count of conspiracy to commit bank fraud and surrendered Friday morning. Like the other three fraud defendants in Johnston’s courtroom that afternoon, he was released on his own recognizance.
FBI agents arrested Naovarath, Somee and Briley on Thursday night.
According to the indictment against Tubin, he began conspiring with an unidentified person in 2006 or 2007 to commit bank fraud.
The indictment claims Tubin and his co-conspirator recruited someone to serve as a straw buyer for houses, and Tubin then “sold houses to the straw buyer for hundreds of thousands of dollars more than the defendant had paid for the houses a few months earlier.”
A straw buyer is a person who pretends to be a legitimate buyer for property in order to conceal the identity of the actual buyer.
According to the indictment, Tubin caused false statements to be made in the straw buyer’s loan applications and related documents. Those false statements pertained to the straw buyer’s income, assets, places of employment and intent to occupy the property.
“It was further part of the conspiracy that the defendant falsely and fraudulently represented to the lender that the straw buyer worked since October 2004 for Tubin International, a company owned by the defendant,” the indictment alleges.
The indictment specifically lists a property at 7501 Royal Crystal St. in Las Vegas and claims about $200,000 was diverted in the 2007 transaction. The lender is identified as Countrywide Home Loans.
“There is no allegation that he did anything to falsify the appraisal for the property,” Yampolsky said.
The lawyer said Tubin has never been convicted of a crime.
Tubin’s trial is scheduled to begin Aug. 9, but Yampolsky said that date likely will be pushed back.
Johnston appointed Yampolsky to represent Naovarath, who said he could not afford to hire an attorney. Naovarath was indicted Tuesday on one count of conspiracy to commit wire fraud.
Although Naovarath’s indictment was unsealed in court Friday afternoon, it was not immediately made public.
Briley was indicted Wednesday with escrow officer Brenda Jackson on one count of conspiracy to commit wire fraud and bank fraud, one count of wire fraud and two counts of bank fraud. Jackson also is charged in the indictment with additional conspiracy and fraud charges.
According to the document, Briley and Jackson began conspiring in 2006 or 2007 and engaged in schemes that involved straw buyers and double escrows.
The indictment defines a fraudulent double escrow as “a real estate transaction involving two contracts at two different prices, with two different buyers, on the same property, closing escrow on the same day, intentionally not disclosed to the lender.” Perpetrators of fraud use double escrows to divert money from mortgage loans for their personal use.
According to the indictment, Briley and Jackson caused co-conspirator real estate appraisers to prepare appraisal reports that falsely overstated the value of properties and caused those appraisals to be submitted to lenders.
The indictment specifically accuses the two defendants of diverting about $470,000 from the sales of three Las Vegas properties in 2006.
Briley, who continues to work in the real estate industry, has retained attorney David Phillips to represent him. Johnston said Briley’s employer must be notified of the pending criminal case.
The federal public defender’s office was appointed to represent Somee, a native of Laos. Somee was indicted Tuesday on one count of conspiracy to commit wire fraud.
Although the indictment was unsealed in court Friday afternoon, it was not immediately made public.
Representatives of the Southern Nevada Mortgage Fraud Task Force gathered Thursday in Las Vegas to announce the regional results of Operation Stolen Dreams, the largest collective enforcement effort aimed at confronting mortgage fraud.
Authorities said 123 defendants were charged, convicted or sentenced in Las Vegas during the operation, which began March 1. Those defendants are accused of engaging in hundreds of fraudulent transactions with straw buyers and causing a gross total loss of more than $246 million.
The U.S. attorney’s office has not released a complete list of the defendants.
Michael Capodici, Jeffrey Palladino, Michael Blair and real estate agent Linda Maria Kot were charged together in one of the indictments that was returned Wednesday.
They are accused of devising a mortgage fraud scheme from about August 2005 to May 2006. Authorities claim the defendants were involved in 12 fraudulent real estate transactions involving nine homes sold in Las Vegas.
“The homes were either flipped — sold twice within a short period of time — or were the subject of a foreclosure,” according to a statement from the U.S. attorney’s office in Las Vegas.
The majority of the homes sold for more than $600,000 and the approximate value of the mortgages for the 12 transactions was $8 million, according to the statement.
Kot also was charged in another indictment that was returned Wednesday. Other defendants in that mortgage fraud case are Hugo Patricio Coutelin, Michael Perry and Jeff Thomas.
Commentary by John L. Smith
Sunday, Jun. 20, 2010
Copyright © Las Vegas Review-Journal
JOHN L. SMITH: Dashed dreams ride on waves of mortgage fraud arrests
It’s low tide in Las Vegas.
That’s how Assistant U.S. Attorney Dan Schiess described the home mortgage fraud crisis in Southern Nevada on Thursday.
As the high sea of real estate prices dropped, an ugly truth was exposed.
“When the market was going good, you could cover it up,” Schiess said after the Operation Stolen Dreams news conference at the Lloyd D. George U.S. District Courthouse. “Then the market turned and you leave debris on the beach when the tide goes out.”
Schiess was right. The Southern Nevada Mortgage Fraud Task Force, part of President Barack Obama’s interagency Financial Fraud Enforcement Task Force, so far has charged 123 defendants with arranging phony straw-buyer transactions that grossed more than $246 million locally.
From everything I heard Thursday, Schiess didn’t take his imagery far enough. This is low tide at the BP oil spill.
Officials were unequivocal: This is only the first round in a long fight to bring mortgage fraudsters to justice through felony indictment and asset forfeiture.
“We’re not even near half,” U.S. Attorney Dan Bogden said, dropping an anvil of a hint that more indictments and arrests are anticipated.
It’s amazing, and more than a little troubling, to know that, as FBI Special Agent in Charge Kevin Favreau said, great damage was done to the local housing market by a handful of “small, sophisticated, and organized groups.” Although the straw-buyer practice wasn’t all-pervasive, it didn’t have to be.
The bust out of even a handful of superinflated home loans could ruin a neighborhood.
This isn’t the story of a wishful buyer who fudged a little paperwork in order to fulfill the American dream of home ownership. Not one single-home purchaser was arrested. Authorities aren’t interested in amateurs.
Nor should the investigation be marginalized by the false belief that the only real victims were faceless lending giants with their own track records of rapacious behavior. This is about straw buyers scoring several loans with wholly fraudulent paperwork on behalf of shadowed operators whose experience in the local real estate and mortgage businesses enabled them to game the system.
Even some straw buyers were played for rubes, FBI Supervisory Special Agent Scott Hunter said, explaining that front men who agreed to buy one house later found their names on a half-dozen mortgages.
The greatest shame of all isn’t included in the charges. Amid the debris that has washed up in many cases is the wreckage of broken dreams of good families. Fraud is one thing; the collateral misery wrought by those crimes is impossible to measure.
In Southern Nevada, whole neighborhoods took a roller coaster ride as insiders used straw buyers, then dumped the houses into foreclosure, crushing legitimate homeowners under the weight of falling value. Some homeowners got lucky and sold before the crash, but most were swallowed up.
We all know someone, a family member or a neighbor, buried by the mortgage crisis. Maybe they got in over their heads in an attempt to carve out their own American Dream. Perhaps they lost a job, then lost their home.
Others moved into neighborhoods never imagining they were investing their life savings and walking into the equivalent of a carnival shell game, or a boiler room operation where nothing they saw or heard was real. Those two-story semi-custom houses in Desert Shores, for example, looked like the ideal places to put down roots, raise children, and build some equity. For most people, a house is life’s most important investment.
But when the market cratered, the lawns went brown and the plywood went up. In a matter of weeks once-handsome neighborhoods took on a Dust Bowl feel.
Want to know the saddest part of all?
Our polluted tide hasn’t yet reached its lowest point.
John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.
Ron Johnson, 24 May 2010