Brooklyn Feds Charge Nine In Straw Buyer Scam That Left Two Lenders Holding The Bag On $92M In Fraudulently Obtained Mortgages

From the Office of the United States Attorney (Brooklyn, New York):

• A federal grand jury in Brooklyn returned an indictment charging nine defendants with a mortgage fraud scheme that resulted in losses exceeding $90 million. The indictment alleges the defendants conspired to defraud Washington Mutual Bank (“WAMU”) and DLJ Mortgage Capital, Inc. (“DLJ”), a subsidiary of Credit Suisse, in connection with the development of two tracts of land located in Brooklyn and Queens by staging the sales of the same properties to straw buyers in order to obtain multiple mortgages on those properties.

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• As part of the fraud scheme, in an attempt to conceal the multiple sales of the same properties, [Thomas] Kontogiannis allegedly changed the addresses of properties located in East New York, Brooklyn, to addresses in neighboring Howard Beach, Queens. In addition, the indictment charges that Kontogiannis and [Nadia] Konstantinadou caused entities controlled by Kontogiannis to make monthly payments on the mortgages, ensuring that none of the mortgages became delinquent. However, the payments ceased in 2007, with approximately $92 million in principal outstanding on the fraudulent mortgages.

For the entire U.S. Attorney press release, see NINE INDICTED IN $92 MILLION MORTGAGE FRAUD SCHEME.

(1) Thomas Kontogiannis, John Michael, Elias Apergis, Steven Martini, Nadia Konstantinadou, Stefan Deligiannis, Ted Doumazios, Edward Hogan, and Jonathan Rubin are charged with conspiracy to commit bank and wire fraud. In addition, Kontogiannis, Apergis, Konstantinadou, Deligiannis, Martini, and Doumazios are charged with bank fraud, and Kontogiannis and Konstantinadou are charged with money laundering and money laundering conspiracy.