Tag Archives: Mortgage Fraud

A developer and restaurateur from Virginia pled guilty Friday for his role in a massive bank fraud scheme that contributed to the collapse of Bank of the Commonwealth, SIGTARP and federal officials announced Monday in a statement. Thomas E. Arney, 56, of Chesapeake, Virginia pled guilty to conspiracy to commit bank fraud, unlawful monetary transactions, and making false statements, according to the statement. Arney faces sentencing on December 3, 2012 and could receive a maximum penalty of 20 years ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô five years each for the conspiracy and false statement counts.

After remaining steady in the first quarter of the year, the Interthinx Mortgage Fraud Risk Index rose again in the second quarter, climbing about 7 percent over the three-month period. Nevada and Arizona are the riskiest two states, followed by Florida, New Jersey, and Georgia, which made its way to the top five list for the first time since Interthinx began tracking mortgage fraud in 2009. Georgia took the place of California, which has been on the top five list since the inception of the index, according to Interthinx.

The Pennsylvania Department of Banking has released its most recent quarterly data on enforcement actions taken by the organization. Second-quarter findings show that the department grappled with 92 incidences during the period. The report, which was complied by the Pennsylvania Department of Banking's Bureau of Compliance and Licensing, revealed that 90 of the 92 actions from the the group resulted in orders against companies for statutory violations. Survey statistics also demonstrated that 43 of the 90 orders for violations stemmed from mortgage-related issues.

Top executives and favored borrowers faced indictment by a federal grand jury on Wednesday for their role in a massive fraud that led to the biggest Virginia bank collapse since 2008. According to a release on Thursday from SIGTARP, the accused are charged with masking non-performing assets at the Bank of the Commonwealth in Norfolk, Virginia. The long-running scheme benefitted the alleged perpetrators to the detriment of the bank, leading to its eventual failure in 2011. The FDIC estimates the cost to its deposit insurance fund to be $268 million.

Mortgage origination fraud may be on the decline, but incidences of collusion appear to be trending up, according to a report released Wednesday by LexisNexis Risk Solutions. After noticing a rising trend in collusion, LexisNexis created a new index specifically to measure incidences of collusion. Collusion has been on the rise since 2009, according to Tim Coyle, senior director of real estate and mortgage solutions at LexisNexis. LexisNexis also observed collusion reports on properties experiencing 50 percent to 95 percent price depreciation.

A Michigan man pleaded guilty to defrauding SunTrust Mortgage Inc. on a $2 million mortgage. Robert Martin Tolentino, of Grand Rapids, Michigan, pleaded guilty in a federal court in Tallahassee, Florida. The plea was announced by Pamela C. Marsh, U.S. Attorney for the Northern District of Florida. Tolentino applied in October 2006 for refinancing of his residential property on St. George Island. In the application, he falsely represented that his monthly salary was $48,000 to $60,000 a month.

SIGTARP announced Tuesday that a Virginia man was sentenced earlier in the week to more than seven years in prison for running a fraudulent mortgage-rescue business. Howard R. Shmuckler of Virginia Beach, Virginia, was sentenced to 90 months in prison followed by three years of supervised release. He was found guilty of running a mortgage-rescue business that received substantial amounts in fees but only modified clients├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó mortgages in a few cases. Shmuckler pleaded guilty to six counts of wire fraud on April 10.

Although mortgage fraud activity seems to be leveling off, a report from MortgageDaily.com showed that mortgage fraud continues to cause foreclosure problems for the most victimized states. The Mortgage Fraud Index, which reflects mostly criminal cases involving law enforcement and court proceedings, showed that mortgage fraud crawled up in the first quarter of 2012. The index was 1151, slightly above Q4 2011├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós 1141 index. The highest recorded index was 2790 in fourth-quarter 2008. According to the website, most of the cases involve crimes committed five or more years ago.

California Attorney General Kamala Harris announced Friday the arrest of Edwin G. Salazar, 34, of Downey, California, and Michael Z. Zuniga, 41, of Fullerton, California, in a $1.3 million Ponzi scheme that targeted Latino investors, many of whom were seniors. Salazar and Fullerton, who operated as OMEGA Investments Corp., were arrested on 57 counts of elder abuse, grand theft, and securities fraud. From January 2007 through June 2008, the licensed insurance agent issued more than $1.3 million in fraudulent securities to individual investors they befriended through their insurance business.

Michigan Attorney General Bill Schuette and State Treasurer Andy Dillon announced Tuesday that a federal judge granted preliminary approval to the state's proposed national class action lawsuit against Bear Stearns and Deloitte & Touche. Bear Stearns and Deloitte & Touche have agreed to settle the securities fraud suit. Under the terms of the settlement, the two firms will pay $294.9 million to investors nationwide who bought Bear Stearns stock and other equity securities and options between 2006 and 2008.