FROM: U.S. JUSTICE DEPARTMENT
Thursday, September 24, 2015
Owner of Florida Mortgage Company Sentenced to Over 11 Years in Prison for Orchestrating $64 Million Fraud Scheme
Two Associates Also Sentenced for their Roles in the Conspiracy
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge Nadine Gurley of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) Atlanta Region made the announcement.
Hector Hernandez, 57, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers (Great Country), a mortgage lender in Miami, was sentenced for conspiracy to commit wire fraud affecting a financial institution. He was also ordered to pay $64,508,141 in restitution and to forfeit $8,000,000 in illicit profits.
In the same case, a real estate developer for Great Country, Aleida Fontao, 62, of Miami, was sentenced today to serve 41 months in prison, and ordered to pay $7,131,952 in restitution and $400,000 in forfeiture. An underwriter for Great Country, Olga Hernandez, 59, of Lake Mary, Florida, was sentenced yesterday to serve 51 months in prison and ordered to pay $24,512,755 in restitution. Hector and Olga Hernandez both pleaded guilty on July 13, 2015, while Fontao pleaded guilty on July 7, 2015. Hector Hernandez was the last defendant to be sentenced in the case. All 24 defendants charged in this case, which included loan officers, loan processors and underwriters, were convicted of participating in the scheme.
According to admissions made in connection with the guilty pleas, from at least 2006 and continuing through at least September 2008, Hector Hernandez was the owner and operator of Great Country which specialized in approving Federal Housing Administration (FHA) loans. The loans were primarily for buyers of condominiums at complexes where Hector Hernandez was a part owner – however, the buyers were unqualified borrowers, due to insufficient income, high levels of debts, and outstanding collections. Hector Hernandez admitted that his company employed loan officers, loan processors and underwriters, including Olga Hernandez and Fontao, whom he knew approved and submitted false and fraudulent FHA mortgage loan applications and accompanying documents to HUD on behalf of the unqualified borrowers. These documents included false pay stubs, false verification of employment forms, and fictitious letters from the borrowers.
According to admissions made in connection with the guilty pleas, closing costs were paid on behalf of the unqualified borrowers through an interstate wire transfer of funds. The borrowers were also paid to purchase the condominium units as an unreported inducement to purchase. After the loans closed, the loans were sold to financial institutions. When the unqualified borrowers failed to meet their monthly mortgage obligations, they defaulted on the loans causing losses both to the financial institutions and to HUD which insured the loans. Hector Hernandez admitted that the loss from the fraudulent conduct was at least $64 million.
This case was investigated by HUD-OIG as participants in the Miami Mortgage Fraud Strike Force. The case was prosecuted by Senior Litigation Counsel David A. Bybee and Trial Attorneys Mike O’Neill and William Johnston of the Criminal Division’s Fraud Section.
No comments:
Post a Comment