Scott Wickersham Sentenced In $45 Million Mortgage Fraud Scheme

United States Attorney Bill Nettles announced that a former loan officer of North American Mortgage Group LLC. has been sentenced to prison on charges of conspiracy to commit mail fraud, wire fraud, and bank fraud, and two counts of willfully making and subscribing a false tax return.

Scott M. Wickersham, 36, of Summerville, SC, was handed a 36 months sentence for Realty Executivesthe conspiracy counts and 30 months in federal prison on each of the two tax fraud charges by U.S. District Judge Richard M. Gergel at the federal court in Charleston, South Carolina.

According to evidence presented in court, Wickersham participated in a mortgage fraud conspiracy that involved more than 70 properties located in Charleston, Johns Island, Ladson, Mount Pleasant, Summerville, Edisto Island, St. Helena Island, Garden City, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Lake Keowee, and Tybee Island, GA. These properties received more than $45 million in mortgage loans, which ultimately led to losses of more than $23 million to financial institutions.

Wickersham was a real estate agent and co-owner/franchisee of Realty Executives of Coastal Carolina, and a partner in New Freedom Enterprises, LLC. He conspired with others to make false representations and used straw buyers to submit loan applications to financial institutions. The properties later went into foreclosure resulting in significant losses to the lenders.

Wickersham was also convicted of willfully making and filing false U.S. Individual Income Tax Returns for 2006 and 2007 where he under reported his income for both years, leading to tax losses of $206,100 for 2006 and $50,762 for 2007.

In addition to his prison sentence, Wickersham was also ordered to pay $23,997,151 in restitution for the conspiracy charges and another $256,862 to the Internal Revenue Service for the tax fraud charges.

Two conspirators were also convicted in connection to the mortgage fraud scheme. Steven F. Weiss, 67, of Virginia Beach, VA, and Kelly Martin, 34, of Moncks Corner, SC. Weiss was sentenced to 30 months in federal prison and ordered to pay $4,961,732 in prison. Kelly is still awaiting sentencing.

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SunTrust Mortgage VP Sentenced for Fraud

A former senior executive of a Virginia-based mortgage company has been sentenced to federal prison, along with his wife and brothers-in-law for their roles in perpetrating a multi-million dollar mortgage fraud scheme.

Moshin Raza, 51, Humaira Iqbal, 39, and her two brothers, Farukh Iqbal, 41, Sun Trust Mortgageand Mohammad Ali Haider, 33, all of Chantilly, Va., were all employees of SunTrust Mortgage and will now be serving varying prison terms on charges of conspiracy to commit wire fraud affecting a financial institution and various counts of wire fraud affecting a financial institution.

According to the U.S. Attorney’s Office, Raza, who was formerly employed at Bank of America, was hired in 2015 to serve as the Vice President of SunTrust Mortgage, and was given the responsibility of opening a new office location in Annandale, Virginia. Raza employed his wife and her brothers as staff at the new office, with both brothers serving as loan officers.

From 2006 to 2007, the four conspired to falsify loan applications for borrowers and used fake tax documents to support the loan applications. Relying on this false information, SunTrust underwriters approved the loans, and borrowers were then given loans to buy homes that they could not afford.

Raza was sentenced to 24 months in prison, and his wife, Humaira, was handed a 15 months sentence. Humaira’s brothers, Farukh and Mohammad will each spend one year and one day in prison for their crimes.

Apart from the prison sentences, Raza and Humaira Iqbal were also ordered to forfeit $40,000 and two properties, and pay $1,923,324.53 in restitution to victims of the fraud.

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Derek Brewart Sentenced for Bank Fraud

According to a release by the U.S. Attorney’s office, a former Upland, CA insurance agent has been sentenced to one year and a day in federal prison on charges of bank and tax fraud in a scheme that caused nearly $6 million in losses for a West Covina bank.

Derek Richard Brewart, 53, of Upland, had on February 2, 2015 made a guilty Hamilton Brewart Ins Agencyplea for the federal charges of bank fraud and filing a false tax return before U.S. District Court Judge G. Bernal.

From 2008 to 2012, Brewart used the name of his clients without authorization to file loan applications at the headquarters of Universal Bank in West Covina. The clients had already financed their premium amounts or paid in full with other financial institutions, and Brewart asked the bank to sent all loan documents directly to his post office box, instead of the client’s address.

After obtaining the loans, Brewart used the proceeds to fund the operating expenses and employees’ payroll of his business, Hamilton Brewart Insurance Agency based in San Bernardino County, CA and in other locations.

Prosecutors also said Brewart took premium payments from some clients and never obtained insurance for them.

“This defendant used his insurance expertise to engage in a scheme that violated the trust given to him as a licensed agent and cost a local bank nearly $6 million,” United States Attorney Eileen M. Decker said in a statement. “His clients trusted him to protect their assets, but he repaid them by placing their assets at risk for his own financial gain.”

In making his plea bargain, Brewart admitted that he failed to report more than $785,922 in income on his tax returns for two years between 2010 and 2011.

Apart from the prison term, Brewart was also ordered to pay $5,926,430 in restitution to Universal Bank of West Covina. He will also work with the Internal Revenue Service to determine how much he actually owes in unpaid taxes.

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Former Nova Bank Executives Found Guilty of Loan Fraud

Two former executives of the now defunct Nova Financial Holding Inc. have been found guilty for their roles in a circular loan scheme organized to defraud the U.S. Treasury Department’s bank bailout program in 2009.

Brian Hartline, 51, and Barry R. Bekkedam, 48, were found guilty by a federal Barry Bekkedamgrand jury on charges of conspiracy to defraud the federal government, fraud against the Troubled Asset Relief Program, or TARP, and two counts of false statements to the federal government.

In 2014, prosecutors had brought up charges against Bekkedam, the bank’s chairman, and Hartline, who served as the bank’s chief executive, for orchestrating a series of fraudulent loans which was issued to clients, who then immediately invested the money back into Nova bank, in order to help qualify the bank for a $13.5 million bailout.

But Bekkedam, who was very popular in the region during his playing days with the Villanova University basketball team in the 1980s, is insisting that he is innocent and has issued a statement saying the charges against him are “trumped-up and false.”

“The jury was persuaded, but I am and was innocent of any wrongdoing,” Bekkedam said.

Hartline’s lawyer, Patrick J. Egan, had also expressed his disappointment in the verdict. “I don’t think they understood the lack of evidence or the law,” he said in an interview.

One of Nova’s bank investors, George Levin, a Florida-based businessman who was also involved in a separate case of a Ponzi scheme that facilitated a $30 million investment in Bekkedam’s company, Ballamor Capital Management, which also received a line of credit from Levin. This case culminated in the closure of Ballamor Capital in 2010. Levin also received a $5 million loan from Nova.

Although, the Treasury Department rescinded its conditional offer of money to Nova for unrelated reasons, Nova was eventually closed by the Federal Deposit Insurance Corp. in October 2012. The special inspector general for TARP still believes that the bank executives were involved in a scheme to defraud the Treasury Department.

“The jury has brought justice to these bank executives who defrauded an emergency crisis-era rescue program,” said Christy Goldsmith Romero, the TARP special inspector general.

“The fact that the bank did not get TARP funds boils down to luck and timing, not because these defendants decided to come clean,” she said.

But Egan still stands by the innocence of his client, saying that they will appeal the case to the Third Circuit and even further, if need be.

“Quite frankly, there are so many problems with this case, it may get appealed all the way to the Supreme Court, because the bottom line is my client is not guilty and this is just wrong,” he said.

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Former Excel Bank Exec Shaun Hayes Indicted for Bank Fraud

The U.S. Attorney’s Office for the Eastern District of Missouri has indicted the former senior executive of Excel Bank for his role in a bank fraud.

Shaun Hayes, 56, bought a majority interest in Sedalia-based Excel Bank in Shaun Hayes2007 and he then used his position at the bank to make unauthorized purchases of delinquent loans owed by a company which he co-owned with Michael Litz, prosecutors said.

Hayes’ partner Michael Litz is also included in the indictment, his company Eighteen Investments, which operated as Bellington Realty, sold its delinquent loans to Excel using notes purchased from Centrue Bank. The remaining money from Excel’s purchase, $906,223, went to Centrue to pay off a delinquent loan made to an entity Hayes co-owned with Litz, McKnight Man I LLC. In all, Centrue got $3.3 million from Excel, prosecutors said.

The indictment stated that “this payment constituted a misapplication of Excel Bank funds and unlawful self-dealing by Shaun Hayes, an insider who, in fact, had substantial control over loan transactions at Excel Bank. (Excel’s) check to Centrue Bank made no reference to McKnight Man.”

The amount of debt exposed by Excel’s transaction with Eighteen Investments properties increased to $14.7 million, which is almost triple the lending limit of $5.2 million. All of these transactions were concealed from the Excel Bank board of directors and did not appear in any of the bank’s records, prosecutors said.

Hayes and Litz are both charged with one count of bank fraud and one count of misapplication of Excel Bank funds. Hayes also faces an additional charge of causing false entries to be made in the Excel Bank records relating to the loan.

The two men face a maximum of 30 years in prison for each charge and up to $1 million in fines.

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Disbarred Lawyer Sentenced for Mortgage Fraud

A disbarred Illinois lawyer has been sentenced to 57 months in federal prison for her role in a mortgage fraud scheme perpetrated in Chicago. Avalon Betts-Gaston, 47, a former Illinois lawyer disbarred in 2012, was convicted by a federal grand jury on two counts of wire fraud and was sentenced to 4 years and 7 months in prison, and also ordered to pay $239,550.48 in restitution.

Betts-Gaston partnered with Dimona or Dmona Ross, a licensed real estate officer, to establish a suburban Chicago company for the purported purpose of helping distressed homeowners to get access to refinancing in order to prevent foreclosure, but in fact, the two worked together to perpetrate a fraud on both homeowners and lenders, federal prosecutors said.

While Betts-Gaston handled the legal aspects of the business, Ross took care of arranging the loans, the women succeeded in selling four homes to straw buyers instead of offering refinancing services.

According to a news release by the U.S. Attorney’s office for the Northern District of Illinois, the pair provided “materially false information” on loan documents to cover mortgages for four Cook county properties worth over $725,000.

Betts-Gaston and Ross and the straw buyers were paid fees for the transactions, and the two women obtained all of the equity from the homes after the new mortgages paid off existing loans, according to the release.

“This case demonstrates a sophisticated scheme to take advantage of the trust that mortgage lenders placed in the loan applications they received, and the trust that the homeowners placed in her,” said assistant U.S. Attorney Stephen Chahn Lee of Betts-Gaston in a sentencing memorandum. “The homeowners believed that she was there to help them, and instead she put their homes and equity at risk.”

Ross had previously pleaded guilty to a one count charge of wire fraud and is scheduled to be sentenced in May.

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James Wallace Charged With Loan Fraud

The office of Carole S. Rendon, U.S. attorney for the Northern District of Ohio announced that a Canton, OH-based business owner has been charged in connection with a scheme to defraud over 15 customers and small business owners of more than $1.5 million. In a complaint filed in the U.S. District Court in Cleveland, James W. Wallace, of Allentown, Pa., is charged with conspiring to commit wire fraud and conspiracy fraud.

Wallace allegedly conspired with Joseph Beck and others to orchestrate the Washington Integrityinvestment and loan scheme using their companies, Wallace Financial Consulting and Washington Integrity, both based in North Canton, OH.

According to federal records, Wallace and Beck became business partners in 2010, and investigators allege that the scam occurred between January 2009 and December 2012. Their victims included entrepreneurs and small businesses in Ohio, the criminal complaint said.

The pair took undue advantage of “the financial desperation of those seeking corporate financing in an economy recovering from the Great Recession and a strict credit market,” court records said.

According to a news release from Rendon’s office, federal investigators allege that Wallace and Beck induced individuals to purchase “aged shelf corporations,” which served no legitimate business purpose other than to funnel money back to Wallace and Beck for their personal use. They told potential buyers who had difficulty obtaining loans that they could help secure loans for them at higher rates than commercial institutions.

Wallace and Beck told the borrowers that they would qualify for private loans, credit cards with high limits, and other credit opportunities by investing in aged-shelf corporations that had been created years before, but had never engaged in any business and existed only on paper.

In 2012, a federal court in Pennsylvania charged Beck with wire fraud in connection with an investment and loan scam, which was most likely related to the complaint filed in court against Wallace. In 2013, Beck was sentenced to about two years in prison after pleading guilty to the federal charges.

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Client and Loan Officer Indicted in Bank Loan Scheme

A De Pere businessman and his wife have been indicted along with an Appleton-based loan officer on criminal charges connected to a fraudulent loan scheme at Horicon Bank. Ronald Van Den Heuvel, 62, and his wife Kelly Van Den Heuvel, 52, both of De Pere, WI and Paul Piikkila, 53, of Appleton, were indicted by a federal grand jury for allegedly obtaining loans using several false representations, according to an announcement by U.S. Attorney Gregory J. Haanstad, of the Eastern District of Wisconsin.

From 2008 to 2009, Ronald and Kelly ran many different business entities in Van Den HeuvelGreenberg area, where the couple conspired with Piikita, a loan officer at Horicon Bank, to obtain approvals on a series of loans totaling more than $1 million to benefit their personal and business concerns, the indictment alleged.

Already, Horicon bank authorities had given specific instructions to Piikita not to issue any loans to the Van Den Heuvels, so in order to conceal the transactions; the loans were made in other names. Several other loans were issued to straw buyers who did not receive the money and were not expected to pay back the loans.

Also, the collateral offered by the couple in the loan application was inadequate for securing the loans, and instead of using the loan proceeds for business purposes as stated on the application, most of the funds were diverted for their personal benefit.

If convicted on all the charges, Kelly Van Den Heuvel faces up to 65 years in prison, Ron Van Den Heuvel faces a maximum of 365 years in prison, while Piikita faces up to five years in prison.

The defendants are scheduled for arraignment on May 6.

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Brandon Mitchell Indicted for Loan Fraud

The former director of Rockbridge County Fire and EMS has been indicted on charges of loan fraud and forgery; authorities have also uncovered several other wrongdoings in connection to the case.

Brandon B. Mitchell, 43, obtained a $30,000 loan from the Bank of Botetourt, using his Brandon Mitchell2016 Porsche Cayenne SUV as collateral for the loan, only to later sell the car without the bank’s knowledge, according court documents.

Further investigations also revealed that the county pay stub which was submitted in the bank loan application was altered to make it seem as if he earned more that he actually did.

As police searched through Mitchell’s office in the county administration building, they uncovered forged court documents that cleared Mitchell of earlier charges he faced for misappropriating more than $2,000 from his previous job as the battalion chief of the Jackson County Fire Department. In a bid to conceal this previous indictment, Mitchell forged the court records and when asked about the case in his job interview at Rockbridge County, he lied, stating that the case had been dismissed and expunged.

Meanwhile, the charges are still pending at the Jackson County Circuit Court in Oregon, where Mitchell is charged with six felony counts of theft, credit card fraud and computer crime. Indictments allege that he stole more than $2, 000 in fire department funds by making personal purchases on a county- issued credit card.

Oblivious of his legal battles, the Rockbridge County hired Mitchell in October 2014 to serve as the Fire and EMS director. It was not until March 2015 when the attention of an investigator with the Virginia Department of Motor Vehicles was attracted to the luxury SUV, a brand-new Porsche Cayenne that is worth about $ 58, 000, being used as collateral in obtaining a $30,000 loan from the Bank of Botetourt.

Shortly after the loan release, two lawsuits were filed by the Bank of Botetourt and the DMV agent, accusing Mitchell of selling or transferring the vehicle while its title was held by the bank. And the whereabouts of the vehicle is still yet to be known.

Mitchell, who is currently free on a $ 20 ,000 bond, had declared on his bail papers that he owns a 2008 Audi , a 1999 Ford and a 2002 Yukon. There is no mention of the Porsche.

Mitchell will be appearing at the General District Court where he will be facing charges of obtaining money by false pretenses, fraudulent conversion of property and four counts of forgery.

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Capano Pleads Guilty to Bank Fraud in Riverbend Project

According to an announcement by the U.S. Attorney’s office for the District of Delaware, a prominent Delaware developer has pleaded guilty to committing federal crimes during the construction of housing units in South New Castle.

Joseph L. Capano Sr., 73, resident of Middletown, admitted to diverting at least Joseph Capano$146,909.96 in loan proceeds from a line of credit that was meant for the construction of the Riverbend at Old New Castle.

Capano, who is from the well-known and influential Delaware family of businessmen, developers and politicians, submitted a guilty plea to one count charge of bank fraud at the U.S. District Court in Wilmington.

According to court documents, the Riverbend construction work was partly funded by a $1.5 million commercial line of credit made available by Cecil Bank headquartered in Elkton, Maryland.

In October 2007, Capano had signed an agreement for the release of the funds, stating that the line of credit would be used to fund construction and other costs associated with the project, but instead, the funds were diverted to cover personal expenses.

From October 2007 to August 2008, Capano made several false statements and representations in funding requests, otherwise known as draw requests, which he submitted to the bank. In one instance, in a draw request seeking for $300,000 to fund a number of Riverbend Development expenses, Capano received the funds only to use them for his personal expenses, including about $63,000 which went for a jewelry purchase, the court documents said.

This plea agreement only means that the last is yet to be heard concerning the under dealings that  went on in the Riverbend project, which is now embroiled in a bankruptcy fight.

Aside from the bank fraud charge, Capano also pleaded guilty to one count of knowingly violating the Clean Water Act. He had directed employees and contractors of his company to expand an entrance road into the development, and place a water main pipe through protected wetlands, this is against the warnings he received in a cease and desist letter issued by the Army Corps of Engineers.

“It is important to the integrity of the land use and development process that all developers operate under the same set of rules,” David C. Weiss, the acting U.S. Attorney for the District of Delaware, said in a statement. “Mr. Capano was determined to make his own rules, and to use whatever means necessary to get the Riverbend Development completed. In so doing, he lied to the bank about the use of project funds and he ignored federal wetland regulations and the directives of the Army Corps of Engineers. Now he stands as a convicted felon.”

Capano now faces up to 30 years in prison and a fine of $1 million for the bank fraud charge, as well as three years in prison and a $250,000 fine for the Clean Water Act charge.

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