Georgia State Bar and Supreme Court records show that on September 8, 2009 attorney Leonanous A. Moore was disbarred after the Supreme Court on 6 disciplinary matters taken against Moore were heard.

The 6 matters related to:

1. His actions in connection to disbursement of funds in a June 2006 real estate transaction
2. His actions in dealing with $75,000 held in escrow from a real estate transaction
3. His actions in dealing with $10,000 held in escrow from a real estate transaction
4. Payment of title insurance premiums by check from a trust account with insufficient funds
5. Failure to record the deeds in several real estate transactions
6. Failure to respond to State Bar requests for information about the insufficient funds

Additional Materials

• State Bar Member Detail Page [PDF] [Link]
• Supreme Court Order

In the following press release Maryland Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has won a judgment in the Circuit Court for Baltimore City against brothers Michael K. Lewis and Earnest Lewis, Cheryl Brooke, In the House Technology, Inc., and Winston Thomas based on violations of Maryland’s law against foreclosure rescue scams. The Honorable Barry G. Williams issued an order that bars the Lewis brothers, Brooke, and Thomas from offering and selling services of any kind to a homeowner who is in default on a mortgage or is in foreclosure, and requires them to pay over a million dollars in restitution and penalties. The order also requires them to provide regular reports to the Division concerning their employment.
___________________________________________________________________________________

[Editor note:

Those mentioned above were recently sentenced in what is believed to an associated criminal case in the Federal courts. Click here for that entry]

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The Consumer Protection Division sued the Lewis brothers, Brooke, Thomas and In the House Technology, Inc. for engaging in a foreclosure rescue enterprise in violation of Maryland’s Consumer Protection Act and Protection of Homeowners in Foreclosure Act. The Division alleged that the main objective of the foreclosure rescue enterprise was to take title to consumers’ homes and then strip the homes of equity.

The Division also entered into a consent order with Cornerstone Title & Escrow, Inc., a real estate settlement company, that the Division sued for participating in the scheme and for using practices that violated the Consumer Protection Act. Cornerstone denied the Division’s allegations and has not admitted any wrongdoing.

“Maryland law prohibits foreclosure consultants from collecting fees before fully performing the services promised and now prohibits them from arranging foreclosure rescue transactions,” said Attorney General Gansler. “Additionally, Maryland law requires foreclosure consultants to provide clients with notices that explain the homeowner’s rights.”

The consent order entered with Cornerstone requires the company to pay $100,100 and bars Cornerstone from performing settlement services for either of the Lewis brothers, Brooke, Thomas or In the House Technology, Inc. The consent order also bars Cornerstone from performing settlements where the purchaser provided foreclosure consulting services to the seller or the purchaser is acting on behalf of a person who provided foreclosure consulting services to the seller.

Consumers facing foreclosure should always be wary of businesses claiming they can help consumers avoid foreclosure. Instead, the Office of Attorney General recommends consumers consult one of the HUD-approved nonprofit housing counselors listed on the Attorney General’s website at www.oag.state.md.us/consumer/foreclose.htm.

Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has won a judgment in the Circuit Court for Baltimore City against brothers Michael K. Lewis and Earnest Lewis, Cheryl Brooke, In the House Technology, Inc., and Winston Thomas based on violations of Maryland’s law against foreclosure rescue scams. The Honorable Barry G. Williams issued an order that bars the Lewis brothers, Brooke, and Thomas from offering and selling services of any kind to a homeowner who is in default on a mortgage or is in foreclosure, and requires them to pay over a million dollars in restitution and penalties. The order also requires them to provide regular reports to the Division concerning their employment.

The Consumer Protection Division sued the Lewis brothers, Brooke, Thomas and In the House Technology, Inc. for engaging in a foreclosure rescue enterprise in violation of Maryland’s Consumer Protection Act and Protection of Homeowners in Foreclosure Act. The Division alleged that the main objective of the foreclosure rescue enterprise was to take title to consumers’ homes and then strip the homes of equity.

The Division also entered into a consent order with Cornerstone Title & Escrow, Inc., a real estate settlement company, that the Division sued for participating in the scheme and for using practices that violated the Consumer Protection Act. Cornerstone denied the Division’s allegations and has not admitted any wrongdoing.

“Maryland law prohibits foreclosure consultants from collecting fees before fully performing the services promised and now prohibits them from arranging foreclosure rescue transactions,” said Attorney General Gansler. “Additionally, Maryland law requires foreclosure consultants to provide clients with notices that explain the homeowner’s rights.”

The consent order entered with Cornerstone requires the company to pay $100,100 and bars Cornerstone from performing settlement services for either of the Lewis brothers, Brooke, Thomas or In the House Technology, Inc. The consent order also bars Cornerstone from performing settlements where the purchaser provided foreclosure consulting services to the seller or the purchaser is acting on behalf of a person who provided foreclosure consulting services to the seller.

Consumers facing foreclosure should always be wary of businesses claiming they can help consumers avoid foreclosure. Instead, the Office of Attorney General recommends consumers consult one of the HUD-approved nonprofit housing counselors listed on the Attorney General’s website at www.oag.state.md.us/consumer/foreclose.htm.

In the following press release John P. Kacavas, U.S. Attorney for the District of New Hampshire, announced today that a former Hillsborough County prosecutor, Paula Philbrook, pleaded guilty to charges that she engaged in a mortgage fraud scheme. United States District Judge Paul J. Barbadoro accepted Philbrook’s plea of guilty to one count of the federal crime of wire fraud in connection with the scheme. Philbrook, age 41, resides in Brookline, New Hampshire.

During a plea hearing today, Philbrook admitted that, in 2006 and 2007, she obtained over $600,000 in mortgage financing to construct two homes after falsely inflating her income on mortgage loan applications. She further admitted that, in connection with one of those loans, she falsely certified in a later affidavit that she actually had taken occupancy of the property when in fact she had leased it out to a third party and had put it up for sale. According to statements made by the government at the hearing, Philbrook also submitted with one of the mortgage applications a version of a construction contract that omitted pages reflecting an agreement between her and her builder to share the cost of  the down payment and mortgage payments and also to share the proceeds of the property upon resale.
Philbrook has defaulted on one of the properties, resulting in a loss to the lender.

Philbrook is licensed as an attorney in New Hampshire and Massachusetts. From 2004 until a few months ago, Philbrook worked as a criminal prosecutor in the Hillsborough County Attorney’s Office in Nashua, New Hampshire, where she held the title Assistant County Attorney. During that period, she also maintained her own part-time law practice, holding herself out as focusing on estate, business and real estate matters. During the prosecution period, Philbrook also was licensed as a real estate agent and associated on a part-time basis with a large real estate brokerage firm.

Judge Barbadoro scheduled Philbrook’s sentencing for January 28, 2009. Wire fraud carries a maximum term of imprisonment of thirty years, although the federal sentencing guidelines will likely call for a lesser sentence. Philbrook was released subject to conditions pending sentencing.

The investigation was conducted by the Federal Bureau of Investigation and the Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Bill Morse.

On September 2, 2009 The Washington (WA) Department of Financial Institutions announced that it has entered into a Consent Order to revokes the licenses of Escrow Agent, Omni Closing Services, Inc and its owners Sheila Marie Reimer and Diane Sue Gates. The DFI has previously denied a license for Omni employee Lydia Jean Easter.

The Statement of Charges for this case state that Omni acted as the settlement agent in at least 5 escrow transactions that defrauded or misled lenders in the purchase of four properties. Those transactions were for the following properties:
4508 N. Dick Road, Spokane, WA
1824 W York Avenue, Spokane, WA
1523 E. 11th Avenue, Spokane, WA
8324 N. Northview Court, Spokane, WA

The Statement of Charges show that HUD-1’s were falisifed to hide the true source of seller concessions and contributions, lenders closing instructions were not followed, funds were wired to parties not known to the lenders, and that Occupancy Affidavits were signed by borrowers whilst Omni was simultaneously closing another owner occupied property transaction. The full details of these transactions can be found in the Statements of Charges below.

Three of the transactions involved purchases by Matthew Van Hook and American Investment Group.

Additional Materials

• Consent Order for Diane Sue Gates
• Consent Order for Sheila Marie Reimer
• Consent Order for Omni Closing Services
• Denial of License for Lydia Jean Easter
• Statement of Charges

On August 26, 2009, the [Washington] Securities Division entered Order #S-09-043-09-TO02, a Superseding Statement of Charges, Stop Order Suspending and Notice of Intent to Revoke Securities Registration, Summary Order to Cease and Desist, Summary Order Revoking Exemptions, Summary Order Suspending and Notice of Intent to Revoke Securities Broker-Dealer and Securities Salesperson Registration, and Notice of Intent to Impose a Fine (“Superseding Statement of Charges and Order”) against Respondents, Hoss Mortgage Investors, Inc. (“HMI”) and Todd Allan Hoss (“Hoss”). The Superseding Statement of Charges and Order replaces Order #S-09-043-09-SC01, a prior Statement of Charges.

The Superseding Statement of Charges and Order immediately suspends HMI’s securities and broker-dealer registrations, along with Hoss’s salesperson registration. The Superseding Statement of Charges and Order gives notice of intent to revoke those registrations and intent to impose a $100,000 fine against Hoss. The Superseding Statement of Charges and Order alleges that Respondents, HMI and Hoss, have each violated the registration provisions of the Securities Act of Washington (“Securities Act”) by offering and selling unregistered investment loan securities and investments in promissory notes and deeds of trust and investor repayment guarantees.

In addition, the Superseding Statement of Charges and Order alleges that Respondents, HMI and Hoss, have each violated the anti-fraud provisions of the Securities Act by offering and selling the same particular investment to more than one investor; by willfully failing to record deeds of trust that were represented to secure the investments; by reconveying deeds of trust that were to secure specific investments without repaying the investors; by selling more than 100% of the interests in participation loans; and by representing that investors were funding loans to specific borrowers, but the borrowers never received the loan proceeds. The Superseding Statement of Charges and Order alleges that HMI and Hoss have each misrepresented or have failed to disclose how investor funds were to be used and that HMI and Hoss have each failed to provide investors with required financial information about their investments, including information about the borrower, the title to real property, and the valuation of the property that should secure the investment. HMI and Hoss also are each charged with engaging in dishonest and unethical practices in the securities business.

The Respondents, HMI and Hoss, have each made a timely hearing request and they each have the right to a hearing on the Superseding Statement of Charges and Order.

Court records show that on May 26 4, 2009 Christine Calbert Gates was charged in an Information and entered a guilty plea in relation to her involvement in a North Carolina mortgage fraud case. She was involved in the onging mortgage fraud investigations by the FBI in NC which involve five “mortgage fraud cells”.

Gates has admitted that whilst working as a closing attorney on real estate transactions for Mortgage Fraud Cell No. 1, Mortgage Fraud Cell No. 2, Mortgage Fraud Cell No. 4 and Mortgage Fraud Cell No. 5.

No specific closings or properties are mentioned in the information.

On August 3, 2009 Gates was disbarred, click here for the NC Supreme Court Order.

The guilty plea is not available on PACER (locked) but the docket shows that on 9/16/2009 there was a waiver of indictment and an acceptance of the plea.

Court records show that September 4, 2009 Willard Edward Wilson was charged in an Information and entered a guilty plea in relation to his involvement in a North Carolina mortgage fraud case. He was involved in the onging mortgage fraud investigations by the FBI in NC which involve five “mortgage fraud cells”.

Wilson has admitted that whilst being the owner of Blaw Construction Company, LLC he acted as a facilitator for Mortgage Fraud Cell No. 2. There are no specific details of the property(s) in which he was involved and the information merely mentions that he made a false statement in relation to a loan and outlines the general, wider, scheme that is described in the link above.

Wilson is a former Council Member for the Hampton County (NC) Council.

Click here for a video news report from WCNC News which indicates that Wilson is also a Church Deacon and treasurer for the NAACP.

The guilty plea is not available on PACER as it is “locked”.

Here are all the case updates that were not sent during my vacation. Sorry there are a lot!

Terence Mayfield sentenced to 97 months for defrauding church congregation

Garrett Gililland extradited from Spain to face numerous fraud and drug charges

Jamilah Al-Bari pleads guilty in $19 million mortgage fraud

Adriana Cruz is last of 8 defendants to be sentenced in Miami HELOC fraud case

Uto Essien and nine other sentenced in Colorado mortgage fraud scheme

Marlon Pratt given 10 years imprisonment in Hennepin County mortgage fraud case.

Cheryl Brook is final defendant to be sentenced in Maryland scam that targetted victims via TV ads

All four defendants have now pleaded guilty in Shelbyville (TN) mortgage fraud case 

Pastor Roland McGill and his wife Shalonda McGill are sentenced in Florida mortgage fraud scam 

Rosario Divins sentenced to 350 months for Texas foreclosure scam & contempt of court

Keith Pittman sentenced to 4 yrs imprisonment in IL fraud case

Two more guilty plea’s in $3 million Kansas City mortgage fraud

Yomi Jagunna given 141 months and ordered to pay around $3.2 million in NJ HELOC fraud

Former settlement agent, Wany Shain, pleads guilty in Louisville mortgage fraud case

Two sentenced in Maryland foreclosure and mortgage frauds that targetted victims via TV ads

Henry “Uche” Obilo sentenced to 88 months in Virginia HELOC fraud scheme

Cheryl Camus sentenced to 5yrs and 3 months in Bay Area real estate fraud scheme

Benjamin Osmanson pleads guilty in $26 million Vermont mortgage fraud case

Lawyer Richard Allison sentenced in Metropolitan Money Store fraud case

Former bank employee, Eric Jason Sunsdahl, pleads guilty in Parish Marketing fraud case

Passadena (MD) title company owner sentenced to 84 months imprisonment

Mario Bernadel convicted in Phoenix (AZ) area mortgage fraud scheme

In the following press release the Federal Trade Commission announced two new law enforcement actions in a continuing crackdown on mortgage foreclosure rescue and loan modification scams, bringing to 22 the number of these cases the Commission has filed since the housing crisis began. The FTC also announced developments in similar pending mortgage-related actions.

“Today’s challenging economy presents an opportunity for con artists who prey upon financially distressed consumers. The Federal Trade Commission and our state and federal partners will continue to bring law enforcement actions to stop this insidious fraud,” FTC Chairman Jon Leibowitz said. “If you’re worried about keeping your home, avoid any company that asks for a large fee in advance, guarantees that they’ll stop a foreclosure or modify a loan, or tells you to stop paying your mortgage company and to pay them instead.”

The FTC’s announcement accompanied a meeting of federal and state officials including Chairman Leibowitz, Treasury Secretary Timothy Geithner, Attorney General Eric Holder, Department of Housing and Urban Development Secretary Shaun Donovan, and the state attorneys general from eleven states (Arkansas, Connecticut, Illinois, Iowa, Maryland, Missouri, Nevada, North Carolina, Ohio, Rhode Island and Washington). These federal and state officials met in Washington, D.C., to discuss emerging trends and ongoing efforts against fraud in the mortgage marketplace. In addition to law enforcement, the FTC discussed its ongoing rulemaking proceeding involving mortgage modification services and continuing efforts to educate consumers about avoiding mortgage-related scams.

In today’s two new announced FTC actions, the defendants allegedly falsely claimed that they would obtain a mortgage modification in virtually all cases. According to the FTC’s complaints, after charging homeowners large up-front fees, the defendants often did little or nothing to help them renegotiate their mortgages or stop foreclosure. The FTC seeks to stop the defendants’ deceptive claims and make them forfeit their ill-gotten gains.

Nations Housing Modification Center and its principals allegedly violated the FTC Act and the FTC’s Telemarketing Sales Rule by misrepresenting themselves as a federal government agency or affiliate and falsely claiming that, in return for a $3,000 fee – half due up-front and half due two weeks later – they would obtain mortgage modifications that would make consumers’ loan payments substantially more affordable in virtually every instance. According to the FTC, the defendants also falsely claimed a 90 percent success rate, that only selected customers meeting certain qualifications were offered a loan, and that they had attorneys and forensic accountants on staff. In fact, the FTC alleges that very few homeowners got modifications, the defendants accepted advance fees for services from all applicants, and they had neither lawyers nor accountants on staff.

According to the FTC’s complaint, the defendants solicited consumers by mail designed to look as if it came from a federal government agency, deceptively stating, “a bill has been passed by Congress” that “allows the Nations Housing Modification Center to provide relief for homeowners that are delinquent on their mortgage through the Nations Home Affordable Modification Program.” The defendants also allegedly made misleading statements on their Web site and with consumers who called their toll-free number. The complaint alleges that consumers were misled because the defendants’ promotion is very similar to the real government “Making Home Affordable” program that provides free mortgage loan assistance.

The defendants are Federal Housing Modification Department, Inc., doing business as Nations Housing Modification Center and Loan Modification Reform Association, and Michael A. Trap, Glenn S. Rosofsky, and Bryan P. Rosenberg. The Commission vote to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the District of Columbia on September 16, 2009.

The FTC appreciates the assistance of the Office of the Special Inspector General for the Troubled Asset Relief Program, the office of Jim Freis, Director of the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, the office of Bonnie M. Dumanis, District Attorney, County of San Diego, California, and the Washington, D.C. Division of the U.S. Postal Inspection Service the in this matter.

Infinity Group Services and its president are charged with violating the FTC Act by falsely representing that they would obtain a loan modification in all, or virtually all, instances; that they would give full refunds if they failed to do so; and that they would obtain loan refinancing for an up-front fee of $995.

According to the FTC’s complaint, the defendants’ radio ads and Web site urged consumers to call a toll-free number. Once consumers called, the defendants’ sales personnel promised that, in return for the up-front fee, the company would help them modify their mortgage loans through the Department of Housing and Urban Development’s Hope for Homeowners program. The defendants claimed a high success rate and offered a full refund if they failed. The FTC alleges that the company often failed to obtain loan modifications and either failed to answer or return consumers’ telephone calls or update them about their status. When consumers were able to contact the defendants, they were falsely told that negotiations were proceeding smoothly or that lenders had caused a delay. In many instances, consumers received refunds only after repeatedly complaining to the FTC, the California Attorney General’s Office, or the Better Business Bureau.

The FTC’s complaint further alleged that the defendants also offered mortgage loan refinancing for a “flat fee” of $995 but then sought additional fees ranging from $2,000 to $15,000. In other instances, consumers were led to believe that they had closed on their loans but were later told by the defendants that the loan would not be funded. According to the complaint, the defendants’ Web site stated that there were no hidden costs, but a fine-print footnote stated, “Rates, Fees and Terms are subject to change.”

The defendants are Infinity Group Services, also doing business as IGS, Hope to Homeowners, ASK IGS, and ASK IGS, Inc., and the company’s president, Kahram Zamani. The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Central District of California, Southern Division, on August 26, 2009.

The FTC also announced developments in four previously filed foreclosure rescue cases:

The FTC has obtained a stipulated federal court order barring Lucas Law Center and its principals from misrepresenting their services and charging up-front fees. The defendants allegedly used an attorney to circumvent California prohibitions against receiving a fee before providing any services. In addition to falsely representing that they would obtain mortgage loan modifications, the defendants allegedly told some homeowners to stop paying their mortgage in order to pay the defendants’ fees of up to $3,995.

The order announced today bars the defendants’ allegedly deceptive practices, pending a trial, and requires them to disable Web sites offering their services and to note the FTC’s lawsuit and the order on the Web sites. The order also requires domain name registrars to prevent any changes to the defendants’ Internet domain name registrations. The order names a permanent receiver over the corporate defendants, extends an earlier asset freeze, and bars the defendants from filing for bankruptcy without the court’s permission. The FTC ultimately seeks consumer restitution and a permanent bar on the defendants’ deceptive practices.

The defendants are LUCASLAWCENTER “INCORPORATED,” Future Financial Services, LLC, Paul Jeffrey Lucas, Christopher Francis Betts, and Frank Sullivan. The complaint was filed in the U.S. District Court for the Central District of California, Southern Division, on July 7, 2009. (see July 15, 2009, press release http://www.ftc.gov/opa/2009/07/loanlies.shtm) The stipulated order was entered on August 24, 2009.

The FTC has obtained a preliminary injunction halting the allegedly deceptive practices of United Credit Adjusters Inc., The Loan Modification Shop, Ltd., and their principals, and freezing their assets, pending a trial. The Commission recently filed an amended complaint in this matter, adding as defendants The Loan Modification Shop, Ltd. and Casey Lynn Cohen, also known as Casey Lynn Collins, alleging that they and one of the original defendants, Ezra Rishty, misrepresented that they would help consumers obtain a mortgage loan modification or stop foreclosure in all or virtually all instances.

The FTC’s original complaint, filed in February 2009, charged seven corporate and three individual defendants with falsely promising to remove negative information from consumers’ credit reports (even information that is accurate and current), charging an up-front fee, and failing to provide written disclosures. (see March 17, 2009, press release http://www.ftc.gov/opa/2009/03/unitedcredit.shtm.) The original defendants are United Credit Adjusters, Inc., doing business as United Credit Adjustors and UCA; United Credit Adjustors, Inc., d/b/a United Credit Adjusters and UCA; United Counseling Association, Inc., d/b/a UCA; Bankruptcy Masters Corp., National Bankruptcy Services Corp., Federal Debt Solutions, Ltd., United Money Tree, Inc., and Ahron E. Henoch, Ezra Rishty, and Gerald Serino, also known as Jerry Serino.

The Commission vote authorizing the staff to file the amended complaint was 4-0. The amended complaint was filed in the U.S. District Court for the District of New Jersey on August 4, 2009. The court entered a preliminary injunction as to all of the defendants on September 1, 2009.

The FTC has obtained preliminary injunctions halting the allegedly deceptive practices of Loss Mitigation Services and its principals, pending a trial. Primarily through direct mail solicitation, the defendants allegedly targeted consumers whose mortgage payments have increased, who have made late payments, and whose homes were in foreclosure. They charged up to $5,500 in advance and promised that a loan modification was assured or virtually assured if consumers hired them. The defendants also misrepresented that they were a department of, or affiliated with, the consumer’s lender or mortgage servicer. In many cases, they failed to obtain loan modifications for consumers, some of whom lost their homes while waiting for the promised results.

The defendants are Loss Mitigation Services, Inc., Synergy Financial Management Corporation, doing business as Direct Lender, and Dean Shafer, Bernadette Perry, and Tony Perry. The complaint was filed in the U.S. District Court for the Central District of California on July 13, 2009. (see July 15, 2009, press release http://www.ftc.gov/opa/2009/07/loanlies.shtm) The litigated preliminary injunction as to the corporate defendants and the stipulated preliminary injunction as to the individual defendants were filed on August 19, 2009.

The FTC has filed an amended complaint in its action pending against Hope Now Modifications, LLC, adding as defendants Michael Kwasnik, Esq. and The Law Firm of Kwasnik, Rodio, Kanowitz & Buckley P.C. The original complaint, filed in March 2009, alleged that the defendants misled consumers about their ability to provide mortgage loan modification and foreclosure relief or to provide refunds if they failed to do so, and misrepresented that they were affiliated with, or part of, the HOPE NOW Alliance, a non-profit organization endorsed by the U.S. Department of Housing and Urban Development. The amended complaint also alleges violations of the Telemarketing Sales Rule.

The Commission vote authorizing the staff to file the amended complaint was 4-0. The complaint and amended complaint were filed in the U.S. District Court for the District of New
Jersey on March 17, 2009, and September 14, 2009, respectively. (see March 24, 2009, press release http://www.ftc.gov/opa/2009/03/newhope.shtm)

The FTC asks homeowners to report foreclosure rescue and mortgage modification scams to FTC.gov or by calling 1-877-FTC-HELP. The FTC makes those complaints available to federal, state, and local law enforcement through the Consumer Sentinel Network. Homeowners in distress can get free help from the Homeowner’s HOPE Hotline 888-995-HOPE (4673), which connects homeowners to HUD-certified housing counselors.

In addition to the FTC’s law enforcement efforts, the agency has initiated a rulemaking proceeding to address the proliferation of companies offering mortgage modification services to determine whether new rules could be useful to protect consumers. The FTC also launched new initiatives to educate consumers on avoiding these scams. For example, the Commission has released a video, “Real People. Real Stories,” featuring people targeted by foreclosure rescue scammers sharing lessons learned from their experiences. The FTC is distributing the video, and a version in Spanish, to more than 5,000 housing counseling and consumer protection organizations around the country, and posting them at FTC.gov/yourhome and YouTube.com/FTCVideos. The Commission’s mortgage-related resources are available at www.ftc.gov/moneymatters.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe”
that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:

Frank Dorman
Office of Public Affairs
202-326-2674

In the following press release United States Attorney Stan Harris, Federal Bureau of Investigation Acting Special Agent in Charge Stephen F. Gomez, Federal Deposit Insurance Corporation - Office of Inspector General Special Agent in Charge Thomas C. McDade, and Madison/Rankin County District Attorney Michael Guest announced today that a federal grand jury has returned a six count indictment against Earline Y. Rawls in connection with a fraudulent mortgage loan scheme. The indictment charges Rawls with one count of conspiracy to commit bank fraud and six counts of bank fraud.

According to the indictment, Rawls devised a scheme which began in August of 2006, and continued through March 29, 2007, and involved the purchase of four residential properties in Madison and Hinds County. The indictment alleges that the primary objective of the conspiracy was to induce approval, funding and distribution of over $1,000,000.00 in loan proceeds through the deceptive submission of fraudulent representations to Merchants and Farmers Bank, Community Bank of Mississippi and BancorpSouth. The indictment further alleges that Rawls, doing business as Heavenly Homes, manufactured fraudulent documents indicating business revenues of $1,301,689 and a profit of $271,530.00 from January 1, 2006 through November 20, 2006. Rawls allegedly submitted this information in furtherance of her scheme with unindicted co-conspirators.

This mortgage fraud investigation is a joint effort led by the Federal Bureau of Investigation, and the Federal Deposit Insurance Corporation, and was assisted by other agencies in the Jackson Financial Crimes Task Force, including the Internal Revenue Service, the United States Postal Inspection Service, Housing and Urban Development - Office of Inspector General, Mississippi Department of Banking and Consumer Finance, Mississippi Real Estate Commission and Appraisal Board, the Madison Police Department, and the Madison-Rankin County District Attorney’s Office.

Stephen F. Gomez, Acting Special Agent in Charge of the FBI in Mississippi applauded the work of the Jackson Financial Crimes Task Force, stating, “By combining the assets and resources of our respective agencies, the Task Force is extremely well equipped to address this threat to the financial well-being of the citizens and financial institutions in our community.”

Michael Guest, the Madison/Rankin County District Attorney, said, “Our office is pleased to have the opportunity of working with the United States Attorney’s Office and other state and federal authorities in bringing perpetrators of mortgage fraud in Madison County to justice. The fraudulent representations made to lenders in many instances may be viewed as significantly contributing to the high rate of foreclosures and economic uncertainty in Mississippi. We will continue efforts to prosecute these cases whenever and wherever wrongdoers are discovered. ”

U.S. Attorney Stan Harris commended the federal, state, and local agencies who are participating in the Jackson Financial Crimes Task Force. Harris said, “This is a good example, on the anniversary of September 11th, of the excellent work that law enforcement agencies can accomplish when they partner together.”

United States Attorney Stan Harris stressed that this indictment represents an accusation only
and all defendants are entitled to a presumption of innocence until proven guilty in a court of law.

In a press release the Florida Bar Association has released details of recent disciplinary actions taken against Florida attorney’s. The following attorney’s have all been disciplined for their actions in relation to real estate transactions.

1. Caswell Adington Hart, of P.O. Box 546941, Surfside, Florida.

Hart has been disbarred permanently, effective retroactive to July 14, 2008. following a July 23 court order. (Admitted to practice: 1998) Hart is further ordered to pay restitutionin the amount of $7,500 to one party in a real estate transaction; $17,500 to another party in a different real estate transaction and $104,733.42 to an estate. Hart misappropriated funds, he abandoned client files after being evicted from his law office and he provided false information to the Bar. Hart was suspended in 2008 for failing to respond to a grievance committee subpoena. (Case No. SC08-1383).

Florida Bar Complaint
Florida Supreme Court Order

2. Guillermo Napoleon Lopez, of 759 NW 22^nd Ave.,Miami, FL

Has been suspended until further order, following a July 28 court order. (Admitted to practice: 2005) According to the petition for emergency suspension, Lopez appeared to be causing great public harm. Lopez facilitated the misappropriation of trust funds by his sister, Maria T. Lopez, an attorney who was placed on emergency suspension in October 2008. Additionally, Lopez was the settlement agent for real estate actions in which he failed to disburse monies as required. In at least one instance, Lopez failed to record a deed and mortgage for a transaction. (Case No. SC09-1360)

Florida Bar Petition
Florida Supreme Court Order

3. Donald Joseph Murray, 2000 Towerside Terrace, Apt. 1807, Miami,FL

Has been suspended for three years, effective 30 days from a July 16 court order. (Admitted to practice: 1969) Murray failed to properly supervise a suspended attorney who subsequently committed real estate fraud while employed by Murray. (Case No. SC09-111).

Florida Bar Complaint (7.5mb)
Florida Suprement Court Decision

In the following press release Rose Gill Hearn, Commissioner of the New York City Department of Investigation (“DOI”), announced the arrests of three individuals, including a New York City Police Officer, in a charged mortgage fraud scheme. This multi-agency investigation uncovered a fraudulent deed for a house in Brooklyn, which, together with other false documents, was used to obtain mortgage funds of $600,000 that were distributed to the three defendants, according to the federal criminal complaint.

DOI, the Criminal Investigations Bureau of the New York State Banking Department, the United States Postal Inspection Service, the United States Secret Service and the New York City Police Department (“NYPD”) worked together on this complex investigation. The office of Benton J. Campbell, United States Attorney forthe Eastern District of New York, is prosecuting the case.

ONEIKA CARTHON, 34, of Brooklyn; JOE D. GREEN, 36, of Jamaica, Queens; and SAMANTHA GIRARD, 34, ofRoosevelt, N.Y., have each been charged with the federal crime of Bank Fraud. Upon conviction, this offense is punishable by up to 30 years in prison.

GIRARD has been an NYPD officer since March 2000 and receives an annual salary of approximately $76,488. She has been on modified duty since February 2007 and was suspended today.

ROSE GILL HEARN, DOI Commissioner, said, “The defendants concocted a charade using a phony deed to steal $600,000, according to the charges. Once the matter was reported to DOI, we worked with our law enforcement partners to expose the scam and call those responsible to account.”

RICHARD H. NEIMAN, Superintendent of Banks for New York State, said, “This case exemplifies the worst type of criminal activity because it involves a sophisticated scheme designed to steal an innocent victim’s home, and to defraud a bank out of $600,000. I applaud the work of the Department of Investigation and our other law enforcement partners that assisted in this investigation and look forward to continuing to aggressively pursue individuals like these defendants that abuse our financial systems for their personal gain.”

RONALD J. VERROCHIO, Inspector In Charge of the New York Division of the U.S. Postal Inspection Service, said, “Postal Inspectors are committed to preserving the confidence of the mail, especially during the surge of investigations into the crime of mortgage fraud. We are happy to work with other Federal, State, and Local authorities to arrest and prosecute those that use the mail as a tool to further their schemes.”

BRIAN G. PARR, Special Agent in Charge of the Secret Service New York Field Office, said, “The success of this investigation is a direct result of the collaborative efforts between the Secret Service and our federal and local law enforcement partners.”

According to the criminal complaint:

This investigation began when a woman told DOI that a fraudulent deed filed with the City Department of Finance (“DOF”) purported to have transferred her family’s Brooklyn house from her deceased father to a man unknown to her family. The investigation found irregularities in that deed, including the incorrect spelling of the deceased father’s name and a signature that did not match his known signature. Later, CARTHON, with the assistance of GREEN, applied for and obtained two mortgages totaling $600,000 supposedly to finance the purchase of the home from the man who had purportedly acquired it from the deceased homeowner. The investigation found that on those applications CARTHON inflated her salary and assets and used an altered life insurance statement.

CARTHON and GREEN were present at the September 2006 closing, where Green presented a phony stipulation indicating that a civil action contesting the transfer of the Brooklyn property had been discontinued. In addition, a man purporting to be the original homeowner was present. In fact, the original homeowner had been deceased for more than a year.

At the closing, approximately $511,500 from the two mortgages was distributed to the three defendants through checks that were later altered. They include a $170,516 check altered to make GIRARD the payee, which was deposited into her bank account from which she withdrew and transferred funds. The investigation also found that proceeds from the mortgages were used for, among other purposes, the following: $41,000 was used to pay off a mortgage on a property in Florida and $79,000 to pay off a mortgage on a house in Jamaica, N.Y., both managed by GREEN; and $23,000 was paid on CARTHON’s car loan with BMW.

Only three monthly payments were ever made on the fraudulently obtained mortgages, which are in default.

Commissioner Gill Hearn thanked Benton J. Campbell, U.S. Attorney for the Eastern District of New York; Richard H. Neiman, Superintendent of Banks for New York State, and Gia Morris, Assistant Director of the Criminal Investigations Bureau with the New York State Banking Department; Ronald J. Verrochio, Inspector in Charge of the New York Division of the U.S. Postal Inspection Service; Brian G. Parr, Special Agent in Charge of the Secret Service New York Field Office; David M. Frankel, DOF Commissioner and Raymond W. Kelly, NYPD Commissioner, and their staffs, for their assistance in this investigation.

The investigation was conducted by DOI’s Office of the Inspector General for DOF, in particular, Confidential Investigator Theresa Siame under the supervision of Inspector General Faisal Khan and Deputy Inspector General Jeffrey Dolcimascolo.

Assistant United States Attorney Daniel D. Brownell from the office of the U.S. Attorney Office for the Eastern District of New York is prosecuting the case.

A criminal complaint is an accusation. Defendants are presumed innocent until proven guilty.

In the following press release Jim Letten, United States Attorney for the Eastern District of Louisiana announced that Hubert Edward Ellzey, Jr., age 68, a resident of Metairie, Louisiana, pled guilty in federal court before U. S. District Judge Eldon E. Fallon to one count of Wire Fraud.

According to court documents, ELLZEY was employed as an independent title agent for Commonwealth Land Title Insurance Company of Louisiana and as such was responsible for disbursing funds from the sale of refinanced property. Usually these funds were wired to ELLZEY into a special escrow account. At some point after June of 2005, ELLZEY began to use the funds provided and wired by the lenders to close out mortgages for his own personal use and would then float the funds from subsequent closings to pay off the prior refinanced mortgages. The scheme was discovered when after Hurricane Katrina hit New Orleans in August 2005 all closings came to a halt and ELLZEY was unable to cover some of the funds converted for his own use and to close the pending mortgages. During the course of the scheme ELLZEY defrauded Commonwealth Land Title Insurance Company of Louisiana of approximately $775,000.00.
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Additional Materials

• Press Release
• Factual Basis for Guilty Plea

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The count carries a maximum statutory penalty of twenty (20) years of confinement, a fine of $250,000.00 and three (3) years of supervised release following any term of confinement. The court set a sentencing date for January 14, 2010 at 2:00 PM.

The case was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U. S. Attorney Juan M. Masini.

In the following press release Ventura County District Attorney Gregory D. Totten announced today that the Real Estate Fraud Prosecution Unit has filed a felony complaint against John William Vanderwall III (DOB 12/13/63) of Simi Valley . The complaint charges Vanderwall with one count of grand theft (Penal Code section 487(a)). It is also alleged that in the commission of the crime, more than $50,000 was taken in violation of section 12022.6(a) of the Penal Code.

Vanderwall was arrested in Simi Valley on September 10, 2009, in an operation conducted by the Ventura County District Attorney’s Bureau of Investigation. Vanderwall currently is a licensed real estate agent employed by Plum Financial Group, Inc. of Simi Valley . The charge of grand theft is based upon Vanderwall obtaining $65,000 under false pretenses from the alleged victim in early 2007.

Bail was set at $10,000 by Ventura County Superior Court Judge David Worley. If convicted, Vanderwall faces a maximum of four years in prison.

In the following press release United States Attorney Joseph P. Russoniello and Monterey County District Attorney Dean D. Flippo announced that a federal grand jury indicted David Arthur Nilsen and Manoel Antonio Errico, of Monterey, Calif., with conspiracy to commit mail and wire fraud, mail fraud, wire fraud and securities fraud. The indictment, which was issued Tuesday, remained under seal until Nilsen was arrested after surrendering to authorities in San Jose, Calif., earlier today.

The indictment accuses Nilsen and Errico of defrauding investors in Cedar Funding, a Monterey-based “hard money” lender, in connection with investments in loans purportedly secured by deeds of trust and in a fund that invested in those same loans. According to the court document, Cedar Funding had more than 1,000 investors and the loss to those investors could exceed $100 million.

The indictment further alleges that Nilsen, 58, and Errico, 55, defrauded investors in fractional interests in loans secured by deeds of trusts, and in Cedar Funding Mortgage Fund, LLC, by making materially false statements, failing to disclose material facts, and creating a materially deceptive and misleading scheme, plan and artifice to defraud. The indictment alleges in part that, through, among other things, documents provided to investors, advertisements, interest payments and verbal communications, Nilsen and Errico created the false and misleading appearance that the investors’ funds were invested in sound, secured real estate loans, which offered high returns and safety of principal. In truth, by in or about 2004 and increasingly thereafter, most of the loans were not performing, and the investors’ funds were not secure. As borrowers increasingly failed to pay off loans, Nilsen and Errico, without the investors’ prior knowledge or consent, extended the loan maturity dates and advanced more investor funds, which caused the loan balances to balloon beyond the initial loan amounts, diluted the investors’ fractional interests in the loans and increased the likelihood that they would lose some or all of their principal.

The indictment also alleges that, unknown to investors, the source of a substantial part of the interest that Nilsen and Errico caused Cedar Funding to pay to existing investors came from new investors’ funds rather than from performing borrowers.

Nilsen made his initial appearance in federal court in San Jose today, and has been released after executing a co-signed bond of $1 million. The defendant’s next scheduled appearance is at 9:30 a.m. on Sept. 28 for identification of counsel and bail review before Magistrate Judge Howard R. Lloyd.
Errico is a fugitive.

Nilsen and Errico are named in each of the thirty-one counts alleged in the indictment. The maximum statutory penalties for each count in the indictment are:
• Count 1, 18 U.S.C. § 1349 (Conspiracy): twenty years imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, three years supervised release and a special assessment of $100
• Counts 2 through 12, 18 U.S.C. § 1341 (Mail Fraud), and Counts 13 through 20, 18 U.S.C. § 1343 (Wire Fraud): each count carries the same maximum penalties as Count 1
• Counts 21 through 31, 15 U.S.C. §§ 78j(b) and 78ff, 17 C.F.R. §§ 240.10b-5 and 240.10b5-2 (Securities Fraud), 18 U.S.C. § 2 (Aiding and Abetting): each count carries the same penalties as Counts 1 through 20, except that the maximum fine is $5,000,000.

The court may also order that the defendants to pay restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Thomas E. Stevens is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Special Assistant U.S. Attorney Annie Michaels of the Monterey County District Attorney’s Office, and legal assistant Elizabeth Garcia. The prosecution is the result of a sixteen-month joint investigation by the United States Postal Inspection Service, the Federal Bureau of Investigation and the Monterey County District Attorney’s Office. The U.S. Attorney’s Office recognizes the substantial assistance provided by the Monterey County District Attorney’s Office in this case.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Nilsen and Mr. Errico must be presumed innocent unless and until proven guilty.

In the following press release the Los Angeles District Attorney announced that a 30-year-old real estate broker faces criminal charges for his alleged involvement in fraudulent real estate transactions. Deputy District Attorney Walter Mueller of the Real Estate Fraud Section said Mario Raul Guevara (dob 10/19/78) was arraigned and pleaded not guilty yesterday afternoon to four counts of grand theft of personal property, two counts of forgery and two counts of failure to file tax returns.

Bail for Guevara was set at $2.1 million. The defendant is due back in Department 37 of the Foltz Criminal Justice Center on Sept. 26 for a preliminary hearing.

Two co-defendants, Marcelino Hernandez, 47 (dob 01/28/62), and his wife, Maria Guadalupe Banales, 38 (dob 12/18/70), arrested yesterday by officers of the Los Angeles Police Department, will be arraigned tomorrow in Department 30 of the Criminal Justice Center.

Hernandez and Banales each face one count of grand theft of personal property. Hernandez is additionally charged with forgery. The three defendants were charged Sept. 9 in a felony complaint for arrest warrant in case No. BA361310.

Guevara is accused of forging a client’s signature and selling the victim’s North Hollywood property to defendant Hernandez. The transaction allegedly netted Guevara $788,504. Guevara and Hernandez allegedly engaged in fraud to finance the purchase.

Similarly, Banales and Guevara allegedly worked together to defraud a financial institution of $1.1 million for the purchase of a property in Los Angeles. The alleged crimes occurred between May 2006 and June 2009.

Guevara, who purportedly solicited investors for his real estate firm, Nationwide Capital Investments, also is accused of pocketing $100,000 given to him by an investor. Prosecutors further allege that the defendant failed to file business and personal income taxes for the 2006 tax year.

The recommended bail is $900,000 for Hernandez and $1.1 million for Banales. If convicted as charged, Guevara faces a maximum term of 14 years in state prison. Hernandez and Banales each face prison terms of up to five years.

In the following press release regarding continuing his fight against mortgage scams, [California] Attorney General Edmund G. Brown Jr. today announced that agents from his office have arrested Michael McConville, and two of his associates for their roles in a “criminal conspiracy” to steal nearly $1 million from borrowers seeking to refinance their homes.

McConville and his co-conspirators lured dozens of borrowers into refinancing home loans by falsely promising low interest rates and brokers’ fees, and other attractive terms. They then negotiated different terms with lenders, forged the victims’ signatures on the final loan documents and collected hefty brokers fees - ranging from $20,000 to $57,000 - that were never disclosed. Only when the borrowers received true copies of the loan documents after the refinance did they discover that their names had been forged. In total, defendants stole over $950,000 from more than 70 borrowers, leaving victims holding $30 million in loans with terms they did not agree to.

“After victims signed their closing papers, McConville and his associates doctored the loan documents, forged borrowers’ signatures and slipped in hefty fees that were never disclosed,” Brown said. “This was not some clerical error but a criminal conspiracy to steal nearly a million dollars from borrowers.”

Earlier this week, Brown filed 44 criminal charges against:

Michael McConville, 31, of Simi Valley, sales manager of ALG, Inc, a Los Angeles based mortgage company. McConville was arrested at his home late Thursday. He is being held in Ventura County Jail on $2 million bail.

Garrett Holdridge, 23, of Palmdale, California and Texas, loan officer for ALG, Inc. Holdridge is being held at the Los Angeles County Jail (Palmdale Station) on $2 million bail.

Alan Ruiz, 28, of Huntington Beach, a loan officer for ALG, Inc. Ruiz was arrested at his home late Thursday. He is being held at Orange County Sheriff’s Main Jail on $2 million bail.

The charges include:

- 28 counts of grand theft, by violating Penal Code section 487, subdivision (a);
- 14 counts of forgery, by violating Penal Code section 470, subdivision (d);
- One count of elder abuse, by violating Penal Code section 368, subdivision (d);
- One count of conspiracy to commit grand theft, by violating Penal Code section 182, subdivision (a)(1);
- Three special allegations of aggravated white-collar crime in excess of $500,000, by violating Penal Code section 186.11, subdivision (a)(2); and
- Taking in excess of $3,200,000, by violating Penal Code section 12022.6, subdivision (a)(4) and (b).

From April 2007 to October 2008, McConville and his associates provided homeowners closing documents bearing terms promised, but which the lender never approved. After homeowners signed those documents, key pages were removed and replaced with pages bearing the terms that the lender had actually agreed to. The homeowners’ signatures were forged on the replacement pages, and ALG forwarded the forged documents to the escrow company.

Homeowners only discovered they had been defrauded when they received the final loan documents with the true terms and saw their signatures forged on disclosures of closing costs, Truth-in-Lending disclosures, loan applications and other documents. ALG often collected between $20,000 and $30,000 in undisclosed broker fees. In one transaction, they collected over $57,000 in such fees.

As a result of this scheme, homeowners suffered devastating financial losses. Some were forced to sell their homes, come out of retirement, or tap into retirement savings. Others paid significant prepayment penalties — in one case, over $21,000. Borrowers often never received the significant amounts of cash-out they were promised.

VICTIMS
Michael McConville promised one couple a 5.5 percent fixed interest rate, cash-out of $58,000 and $4,500 in closing costs. Only after they signed the documents, they realized their copy did not include the pages detailing the key terms of the loan. The couple soon received loan documents from Indymac Bank and discovered their signatures had been forged and they had received a 7 percent interest rate, no cash-out, and over $50,000 in closing costs, including a $42,000 origination fee paid to ALG.

ALG contacted a 65-year-old retired woman in July 2007 and promised her a 30-year fixed rate loan at 5.25 percent. A month later, a notary had arrived at the victim’s house with loan documents reflecting the 5.25 percent fixed interest rate. After closing, the victim discovered she had received an adjustable rate mortgage with an initial rate of 8.65percent, a $22,000 origination fee, and $2,230 in miscellaneous fees. The victim’s signature had been forged on most of the documents.

Brown recently sued Michael McConville and his brother Sean for their part in the “Property Tax Reassessment” scam which targeted Californians looking to lower their property taxes. Tens of thousands of mailers were sent out that featured official-looking logos and demanded hundreds of dollars in payments for property tax reassessment and reassessment appeal services. The statements warned homeowners that if payments were not received by the “due date” they faced late fees or would have their file marked “non-responsive” or “ineligible for future tax reassessments.” A copy of the press release can be found at: http://ag.ca.gov/newsalerts/release.php?id=1734

Brown has made it a top priority to combat mortgage fraud. In July, as part of a nationwide sweep, Brown filed suits against 21 individuals and 14 companies who ripped off thousands of homeowners seeking mortgage relief. In total, Brown has sought court orders to shut down 32 companies and has brought criminal charges and obtained lengthy prison sentences for deceptive mortgage consultants.

A senior bankruptcy analyst with the United States Trustee in Wichita was the driving force behind a case that U.S. Attorney General Eric Holder called one of the Justice Department’s most important prosecutions of a foreclosure rescue scam.

Edward Walsh will receive a Guardian of Justice award from U.S. Attorney Lanny Welch at a ceremony Wednesday when the Kansas Association of Chiefs of Police holds its Fall Conference in Hutchinson.

At a press conference in April in Washington, D.C., Attorney General Holder cited the prosecution of Isaac Yass and Robert Blechman in U.S. District court in Kansas as an outstanding example of the Justice Department’s drive to protect homeowners from fraudulent mortgage schemes.

“The Attorney General didn’t mention Ed’s name,” said U.S. Attorney Lanny Welch. “But we know how hard Ed worked on that case and we want to give him credit for it.”

In January 2009, a jury convicted Yass and Blechman on charges of mail fraud, aggravated identity theft and conspiracy. During trial, Walsh took the stand and guided jurors through the complicated scam. Yass and Blechman operated a fraudulent service called Stopco falsely claiming to be able to save homeowners who were behind on their mortgage from losing their homes. They solicited homeowners who were going through foreclosure. For a fee, they filed fraudulent bankruptcy petitions in federal bankruptcy courts in Wichita, Topeka and Kansas City, Kan., as well as Maryland and Tennessee. The petitions were filed in the name of nonexistent individuals with businesses that claimed to be part owners of properties that were in foreclosure. The result was an automatic stay in foreclosures, halting further actions by creditors against the properties – but only until the fraud was discovered.

Walsh worked for months leading up to trial putting the case together, identifying witnesses and exhibits. He flew to Los Angeles to assist agents in a search of the defendants’ business and homes. He assisted in the interview of the defendant Yass, and he assisted in searching and seizing from Yass’ office and business more than $600,000 in assets that were used as evidence to convict Yass and to obtain a preliminary order of forfeiture against the defendants for more than $1.9 million.

“Without Ed’s involvement, this case could not have been successfully prosecuted,” said Assistant U.S. Attorney Richard Hathaway, who prosecuted the case along with Assistant U.S. Attorney Christine Kenney.

Also receiving a Guardian of Justice Award Wednesday will be Karrina Brasser, a Sedgwick County Sheriff’s Detective who led an investigation resulting in the conviction of more than two dozen defendants on federal charges and overturning a drug trafficking operation that in 2006 and 2007 distributed more than 24,000 pills of methylenedioxymethamphetamine, commonly known as MDMA or Ecstasy.

Guardian of Justice awards are given annually to federal and state or local law enforcement officers in recognition of outstanding service provided in the prosecution of significant cases by the United States Attorney’s office. The awards are the highest recognition given to a member of the law enforcement community by the United States Attorney’s office. Nominations for the awards come from prosecuting attorneys who worked with the nominees.

The Guardian award ceremony is scheduled for noon Wednesday in the Apollo Room at the Grand Prairie Hotel, 1400 N. Lorraine, in Hutchinson, Kan. The ceremony is open to the media. For more information, call Jim Cross, public information office, at (316) 269-6481.

In the following press release Michael W. Reap, Acting United States Attorney for the Eastern District of Missouri announced that Shawn Cannon was sentenced to 60 months in prison on bank fraud, bankruptcy fraud, and identity theft charges, Michael W. Reap announced today.

According to court documents, Cannon knew he would be unable to qualify for a loan to purchase a home using his true identity. So, between August and October 2005 Cannon used fraudulent information, including a false Social Security number and false payroll information, to obtain a loan from Pulaski Bank to purchase a personal residence in Florissant, for approximately $300,000. Cannon failed to make required payments. In December 2008, Cannon filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court, again using the false Social Security number.

SHAWN CANNON, St. Louis, pleaded guilty last June to one felony count of bank fraud, one felony count of bankruptcy fraud, and one felony count of aggravated identity theft. He appeared today for sentencing before United States District Judge E. Richard Webber.

“This sentence demonstrates that abuse of the bankruptcy process will not be permitted,” stated Nancy J. Gargula, United States Trustee for Region 13, which includes the Eastern District of Missouri.

Members of the Eastern Missouri Bankruptcy Fraud Working Group include representatives of the United States Attorney’s Office for the Eastern District of Missouri; Office of the United States Trustee for Missouri, Arkansas and Nebraska (Region 13); Federal Bureau of Investigation; Internal Revenue Service; United States Postal Inspection Service and Social Security Administration, among others. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. This case was referred to the U.S. Attorney by the St. Louis office of the U.S. Trustee Program.

Reap commended the work performed on the case by the investigating agencies, including the Social Security Administration, U.S. Postal Inspection Service, and FBI. Assistant United States Attorney John Bodenhausen and Special Assistant United States Attorney Leonora Long, of the U.S. Trustee’s St Louis office, handled the case for the U.S. Attorney’s Office.

In the following press release the FBI in New Orleans announced that Ryant Price, age 46, a resident of Saint Rose, was charged today in an eight-count Superceding Indictment by a Federal Grand Jury for theft of government funds, wire fraud, mail fraud, and false states to the Louisiana Road Home Program in connection with his 2006 application for Louisiana Road Home Program and Federal Emergency Management Agency funds, announced U.S. Attorney Jim Letten.

According to the Superceding Indictment, prior to and during the time of Hurricane Katrina, PRICE resided in his primary residence on River Road in Saint Rose, Louisiana. It is alleged that in 2006, PRICE applied for funds from the Louisiana Road Home Program and the Federal Emergency Management Agency, claiming that a second home he owned, located in New Orleans, Louisiana, was his primary residence at the time of the storm. According to court documents, as a result of his applications, PRICE received approximately $105,000 in Louisiana Road Home Program funds to which he was not entitled. He also received $14, 858 in Federal Emergency Management Agency disaster assistance funds to which he was not entitled to.

If convicted on all counts, PRICE faces a maximum term of imprisonment of ninety (90) years, a fine of $1,000,000.00 and twenty- four (24) years of supervised release following any term of imprisonment.

U.S. Attorney Jim Letten reiterated that the indictment is merely a charge, and that the guilt of the defendant must be proven beyond a reasonable doubt. The case was investigated by the U. S. Department of Housing and Urban Development, Office of the Inspector General, U.S. Department of Homeland Security, Office of Inspector General, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U. S. Attorney Spiro G. Latsis.

In the following press release John M. Bales, United States Attorney for the Eastern District of Texas, announced that a 43-year-old Murphy, Texas man has been arrested on charges of bank fraud and identity theft in the Eastern District of Texas. 

Clifford Wayne Robertson appeared today before U.S. Magistrate Judge Amos L. Mazzant to be formally charged with bank fraud and aggravated identity theft.

According to the Indictment, an investigation determined that Robertson claimed to be a real estate investment advisor who hosted A.M. radio real estate investment talk shows and in-person seminars.  Beginning in December 2007, Robertson is alleged to have used the identity of another person to submit a fraudulent personal financial statement to a lending institution in order to obtain money by false pretenses.  Robertson was indicted on Sept. 10, 2009 and was arrested today in Dallas, Texas. 

If convicted, Robertson faces up to 32 years in federal prison.

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Tammy Reno.

It is important to note that an indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.

In the following press release Rod J. Rosenstein, United States Attorney for the District of Maryland, announced that George Michael Perez, age 33, of Dundalk, Maryland, pleaded guilty today to wire fraud and arson in connection with a scheme to defraud the law firm where he was employed, and to failure to appear at a federal hearing.

“This investigation exemplifies how ATF and our partners won’t leave any stone left unturned,” says ATF Special Agent in Charge Theresa R. Stoop. “We will work on a case until the person found responsible is held accountable for all of their actions.”

According to his guilty plea, in January 2004 a law firm located in Dundalk hired Perez to work in its accounting department. The law firm concentrated its practice in real estate law, and would receive and disburse substantial sums of money while handling the sales of foreclosed properties. Perez was responsible for keeping track of the flow of money in the firm’s escrow account. Over time, the firm became dissatisfied with Perez’s work performance and terminated his employment on April 16, 2007.

On April 23, 2007 the Baltimore County Fire Department responded to a fire in the building occupied by the law firm. The fire was concentrated on the fourth floor which housed the firm’s offices, and a room in the basement which the firm leased for document storage. Further investigation revealed that the fire was intentionally set by someone igniting piles of paper. The fire alarm system had been disabled, which could be done by entering a code on a pad located near the firm’s entrance. Law firm employees, including Perez, knew the code numbers. The door to the room in the basement was locked, requiring forced entry to suppress the flames. The key to the door, which was kept on a hook by a secretary’s desk on the fourth floor, could not be found at the time of the fire. The key was subsequently seized from Perez’s home.

Investigators also found that a safe in an attorney’s office had been opened with the key that was still in the door to the safe. The contents of the safe were missing. The attorney kept the key hidden in an ornament on a credenza. Investigators also found eight of the firm’s computers in an alley alongside the building, along with some of the contents of the safe.

The fire caused substantial damage not only to the law firm’s offices, but also to other businesses that occupied the building, including offices of a physician, an accounting firm and a pharmacy. Damage caused by the arson is estimated to be $800,000. A firefighter who responded to the fire was injured and taken to the hospital to be treated for burns he suffered. He was released after treatment.

Two weeks later, an audit revealed that from December 2005 to April 12, 2007, Perez had made 114 fraudulent wire transfers totaling $1,044,309 from the firm’s escrow account into Perez’s personal account. Perez used the money stolen from the firm’s escrow account to pay off gambling debts and to invest in the purchase of real estate.

Perez was indicted on March 27, 2008 on charges arising from the theft and arson. He was released under the supervision of Pretrial Services on a number of conditions, including that he not violate any law and that he immediately notify Pretrial Services should he be arrested. Perez was arrested for assault in April, 2008 by Baltimore County Police. He failed to advise the Pretrial Services of this arrest. The government requested a review of Perez’s release and a court hearing was scheduled for May 8, 2008. Perez failed to appear at the hearing and efforts to locate him were unsuccessful. Perez was subsequently arrested in April 2009.

Perez faces a maximum sentence of 20 years in prison for wire fraud, a mandatory minimum of seven years and a maximum of 40 years in prison for arson and 10 years in prison for failure to appear in court. U.S. District Judge William D. Quarles, Jr. scheduled sentencing for December 7, 2009 at 9:30 a.m.

United States Attorney Rod J. Rosenstein thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the Baltimore County Police Department and Baltimore County Fire Department for their investigative work. Mr. Rosenstein commended Assistant United States Attorney Stephen M. Schenning, and Special Assistant United States Attorney Adam Lippe, who are prosecuting the case.

In the following press release John P. Kacavas, United States Attorney for the District of New Hampshire announced that a husband and wife formerly of Nashua, New Hampshire, have been indicted by federal Grand Jury for conspiracy to commit bankruptcy fraud and related crimes. The three count indictment charges Christina LoBrutto, 40, and Luigi or Louis LoBrutto, 41, with conspiracy to commit bankruptcy fraud and charges Luigi LoBrutto with making a false statement to the U.S. Bankruptcy court and aggravated identity theft.

The indictment alleges that from about April through about June 2007, the LoBruttos agreed to file a fraudulent bankruptcy petition in the name of the person who owned their Nashua home in an effort to prevent Wells Fargo Bank from foreclosing on the property. According to the indictment, the owner of the LoBruttos’ house did not consent to the use ofhis identity on the bankruptcy petition and did not authorize the filing of a bankruptcy petition in his name.

The indictment also alleges that the LoBruttos impersonated the owner of the house and his wife, retained an attorney to file the bankruptcy petition, and provided the attorneywith false identification information to be used on the petition.

In addition to conspiracy to commit bankruptcy fraud, Luigi LoBrutto was also charged with making a materially false statement to the Bankruptcy Court and aggravated identity theft in connection with filing a bankruptcy petition using another person’s identity.

The LoBruttos currently reside in Somerville, Massachusetts. They appeared in U.S. District Court in Concord, New Hampshire, today to be arraigned on these charges. The court ordered that they both be released under the supervision of the United States Probation Office pending trial, which was scheduled for November 3, 2009.

If convicted of conspiracy to commit bankruptcy fraud, the LoBruttos each face a possible maximum sentence of five years in prison and a possible maximum fine of $250,000. Luigi LoBrutto also faces a possible maximum five year prison term for making a false material statement to the Bankruptcy Court and a mandatory sentence of two years inprison for aggravated identity theft. He is also facing possible maximum fines of $250,000 for each of these crimes.

An indictment is only an allegation and not proof of criminal conduct. As in all criminal cases, the defendants are presumed innocent until proven guilty beyond a reasonabledoubt.

This case is being investigated by the FBI and is being prosecuted by Assistant United States Attorney Mark S. Zuckerman.