“3.5 Million Dollar Fraud Scheme in RI”
It hits close to home, when this happens in a state that is part of my mortgage practice. I can’t tell you how it continues to piss me off, that this stuff goes on every day. Day after day we keep reading about fraud being committed all over this country.
We have to make these penalties more severe, otherwise this will just keep going. Maybe it’s me, but I see and hear more about these schemes, than any other time, I can remember. If these are the ones that get caught, I wonder how many don’t?
Mortgage Loan Processor Admits to $3.5 Million Fraud Scheme
A Rhode Island mortgage loan processor with National City Mortgage Co. has pleaded guilty to participating in a straw-borrowing scheme that brought in more than $3.5 million in fraudulently obtained mortgages.
Miguel Valerio admitted in U.S. District Court in Providence, R.I. that he recruited and paid straw purchasers to buy 13 properties in five Rhode Island communities that they could not afford. The lenders eventually foreclosed all of these properties.
To operate this fraudulent scam, Valerio said he and Juan Hernandez, a loan officer at National City Mortgage, formed a company called Latin American Investments. Valerio said in the court hearing that the purpose of this company was to oversee rental properties. However, he said, the properties secured by the conspirators were acquired through straw buyers who applied for mortgages or bought the homes under Valerio's or his former wife's name.
Valerio admitted that the intent of the scheme was to take control of the properties, collect rent, and then sell or “flip” them within a short period of time. The profits from the sale were then going to be divided among the conspirators as well as James Levitt, a former real estate attorney who also allegedly participated in this scheme.
Valerio has been charged with two counts of conspiracy to commit bank and wire fraud. Sentencing is scheduled for March 6 where Valerio faces up to five years in prison and a $250,000 fine on each count.
Hernandez pleaded guilty in October to seven counts of bank fraud, four counts of wire fraud and two counts of conspiracy relating to this crime.
Levitt is awaiting trial on the thirteen-count indictment that was filed in May on this case.
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
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