Tuesday, April 12, 2011

Sacramento Feds Bag 4th Conviction In Mtg. Fraud, Flipping, Rent To Own Racket That Screwed Over Investors, Would-Be Buyers w/ Crappy Credit

From the Office of the U.S. Attorney (Sacramento, California):
  • United States Attorney Benjamin B. Wagner announced [] that Gabriel Richard Viramontes, 48, of Elk Grove, was convicted [] of six counts of bank fraud and seven counts of mail fraud. The guilty verdict was returned by a federal court jury in Sacramento after a seven-day trial [...].
  • According to testimony presented at trial, Viramontes and three co-defendants (who had already pleaded guilty to related charges(1)) engaged in a mortgage fraud scheme in the Sacramento area that involved at least 19 homes with loans of more than $8 million.
  • From June 2006 through October 2006, the defendants through VFM Investment Group, Esnian Mortgage Realty, and Freedom Capital Mortgage, engaged in a mortgage fraud scheme by asking investors to purchase with no money down single family homes on behalf of others with bad credit who wished to purchase homes. The investors were told they would benefit financially from the transactions.
  • The defendants then defrauded lenders such as Washington Mutual Bank, Long Beach Mortgage, and Fremont Investment and Loan by submitting fraudulent loan applications that inflated the buyers' income, falsely stated that a buyer was employed at a specific job, and falsely stated that the properties would be owner-occupied.
  • The purpose of the scheme was to ensure that the home purchase transactions closed, so that the defendants would receive substantial loan broker commissions and illegal kickbacks from real estate sales commissions.

For the U.S. Attorney press release, see Jury Convicts Elk Grove Man in Sacramento Area Mortgage Fraud Scheme.

Thanks to Tim McDonald for the heads-up on the story.

(1) James Roy Martin, 40, pleaded guilty to making false statements on a loan application and money laundering on March 26, 2010. Mario Fellini III, 42, pleaded guilty to making false statements on a loan application on March 12, 2010. Joseph Salvatore Gallo, 38, pleaded guilty to misprision of felony on February 18, 2011. All are from the Sacramento area.