Just one week after federal investigators busted an alleged mortgage fraud scheme that affected several Queens properties, federal prosecutors indicted 41 individuals last Thursday, including 10 Queens residents, for reportedly raking in $64 million in a similar scandal.
Preet Bharara, the U.S. attorney for the Southern District of New York, unsealed the charges in eight separate cases that were part of an investigation dubbed “Operation Bad Deeds.”
The suspects, who were charged with various counts including conspiracy to commit bank fraud, wire fraud and bank fraud, allegedly obtained money for fraudulent mortgages for hundreds of properties by using straw buyers, property flips and equity stripping, according to the U.S. attorney.
“As the U.S. economy struggles, we will continue to have a zero-tolerance policy for those who defraud financial institutions and prey on homeowners on the brink of foreclosure,” Bharara said in a statement.
Ten of the 41 suspects included Queens residents and some of the properties were located in southeast Queens neighborhoods, which lead the state in the number of foreclosures.
Joseph Evans, 47, of Middle Village; Jerry Calonge, 34, of Fresh Meadows; Mark Barnett, 44, of Queens Village; Orette Killikelly, 45, of Jamaica; George Esso, 37, Elton Lord, 47, and Faith Esimai, 64, all of St. Albans; Rafick Bakus, 53, of Ozone Park; Norman Barabash, 64, of Bellerose; and Adeolu Adeniji, 50, of Springfield Gardens were all part of the schemes, the U.S. attorney said.
The federal investigation found the suspects targeted homeowners in Queens, Brooklyn and the Bronx who had fallen behind on their mortgage payments and were facing foreclosure, the criminal complaint said. Using various private companies, the suspects would allegedly purchase the properties through “short sales,” in which the lenders agreed to sell the homes for less than the balance owed and discharge the rest of the mortgage, according to Bharara.
The suspects would then resell, or “flip,” the properties to a straw buyer at a higher price, sometimes on the same day, federal prosecutors said. In some cases, the struggling homeowners were allegedly tricked by the suspects, who promised them that their deeds would be returned to them at another date or that they were refinancing their loans, according to the criminal complaint.
Other suspects have been accused by federal investigators of falsifying identification information to obtain the mortgages.
In total, the accused were able to obtain more than $64 million from the scheme, which took place between 2006 and 2008, and many of the homes went into foreclosure, the U.S. attorney said.
“This type of criminal conduct charged today constructs the credit markets and makes it harder for honest people to realize the American dream of homeownership,” Bharara said in a statement.
The homes were located in the neighborhoods of Jamaica, Springfield Gardens and Rosedale, areas that have seen a surge in foreclosures due to an influx of predatory lending practices.
Two weeks ago, federal prosecutors charged 12 people in a separate mortgage scheme where the suspects allegedly made $9 million from fraudulent loans purchased for several properties in Queens and Long Island, according to the U.S. attorney. The homes that were part of that suspected scheme also went into foreclosure and some were located in southeast Queens, federal investigators said.
Reach reporter Ivan Pereira by e-mail at firstname.lastname@example.org or by phone at 718-229-0300, Ext. 146.
©2009 Community News Group
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