Due to the recent mortgage fraud takedown known as “Operation Bad Deeds,” a joint federal, state and local operation targeting mortgage fraud spearheaded by the U.S. attorney’s office for the Southern District of New York, 41 people face more than 3,600 years in prison if they are convicted.

Operation Bad Deeds resulted in the arrest of 41 individuals from four states — New York, Pennsylvania, Ohio and North Carolina — in eight separate cases for allegedly engaging in various mortgage fraud scams that collectively defrauded lenders out of more than $64 million in home mortgage loans on 107 properties across New York State. Among those charged are six lawyers, seven loan officers, three mortgage brokers, an accountant and a residential property appraiser.

The takedown of Operation Bad Deeds is the culmination of a series of investigations conducted by the U.S. attorney’s office for the Southern District of New York, FBI, New York State Banking Department, HUD Office of Inspector General, U.S. Secret Service, U.S. Postal Inspection Service and FDIC Office of Inspector General.

When announcing the 41 arrests, Preet Bharara, U.S. attorney for the Southern District of New York, said that the fraud schemes alleged in the eight cases “reflect a veritable smorgasbord of scams,” ranging from equity stripping to fraudulent foreclosure rescues to phony loan applications to fake property flips.

“These alleged fraudsters were feverishly working to game the system. The defendants include corrupt industry insiders who are alleged to have employed various forms of deceit to fleece banks and mortgage lenders out of more than $64 million in loans.”

In terms of the eight cases in the operation, the case against Lavette Bills and nine others alleges that the defendants identified distressed properties that could be purchased at a low price by targeting homeowners whose homes were facing foreclosure. The defendants allegedly induced the homeowners to sell their homes to companies controlled by the defendants. The defendants allegedly then flipped the properties to third-party straw buyers at a higher price, usually on the same day.

In the case against Peggy Persaud and others, eight defendants have been charged in a 10-count indictment in connection with an alleged mortgage fraud scheme involving $23 million of fraudulently obtained loans from lenders through a Queens, N.Y.-based mortgage brokerage called GuyAmerican Funding Corp. The defendants allegedly recruited and used distressed sellers and straw buyers to flip properties multiple times between different straw buyers and strip the equity from those properties as they were resold with inflated market values.

Another case — the U.S. v. Beverly Johnson et. al. — concerns six defendants charged in a one-count complaint with conspiracy to commit bank and wire fraud in connection with their alleged participation in a scheme to provide false information and documents to lenders for the purchasing and refinancing of properties. In total, the defendants allegedly obtained $5 million in loans on seven properties through fraud.

Additionally, five defendants are charged with conducting an alleged scheme involving $13.5 million in fraudulently obtained loans. The defendants allegedly conspired to obtain loan proceeds from numerous lending institutions on the basis of fraudulent applications. Loan agents Marlene Bossous and Dayanara Velasquez allegedly prepared fraudulent loan documents. Real estate agency operator Faith Esimai allegedly recruited straw purchasers and prepared fraudulent loan applications. Norman Barabash and Harold John allegedly created false documents.

The case against Danny Siony and three others concerns a 12-count indictment involving $6.8 million in allegedly fraudulent home mortgage loans obtained through a mortgage brokerage firm called Joshua Funding Corp., operated by Mr. Siony and Shirin Kalimi. As part of the scheme, the defendants allegedly recruited and obtained home mortgage loans on behalf of at least six straw buyers to fund the purchase of more than 11 distressed properties in the New York City area. Mr. Siony, Emmanuel Roy and Tariff Dill allegedly recruited the straw buyers.

In another case, Dean Reskakis, Adeolu Adeniji and Sharon Friday are charged in a three-count indictment with allegedly participating in a scheme involving $6 million worth of fraudulent loans. The defendants allegedly obtained mortgage loans using straw buyers for homes at values that were well in excess of the prices at which the sellers agreed to sell them and well in excess of the prices that the properties were actually sold at. The three defendants allegedly created fake documents to trick lenders into believing the inflated sales prices were accurate and allegedly recruited straw buyers to purchase the properties at inflated prices.

In addition, three defendants are charged with allegedly obtaining a $650,000 home mortgage loan for a Brooklyn property. Keren Sade Misaghi purportedly completed a loan application on behalf of the purchaser that contained numerous false statements. David Misaghi allegedly obtained a cashier’s check from a bank account he controlled, which was then altered and used as a “show check” at closing, falsely reflecting a large downpayment by the purchaser. Quentin Tucker was an appraiser who allegedly created an inflated appraisal for the property.

In the final case in the operation, Dustin Dente and Brandon Lisi, two practicing lawyers, were charged with participating in a scheme to defraud various lenders by obtaining mortgages through false and fraudulent information and statements. According to the complaint, the defendants allegedly used straw purchasers to obtain the loans, and, in at least one instance, misappropriated the proceeds of those loans. The defendants are alleged to have fraudulently obtained $3.5 million in home mortgage loans, many of which are now in foreclosure.

The defendants could not be reached for comment.

“A key factor leading to the mortgage crisis was the failure of the gatekeepers, including mortgage brokers and attorneys. Unfortunately, instead of protecting our financial system, in some cases they abused their positions and joined criminal schemes to steal millions of dollars,” said Richard H. Neiman, superintendent of banks for New York State.

Tags: foreclosure, homeowners, lenders, loan officers, mortgage brokers, mortgage crisis, mortgage fraud, mortgage loans, real estate

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