US authorities have charged 41 lenders, lawyers and others in the real estate industry, including some with Guyanese roots, with participating in mortgage fraud schemes that preyed on New York homeowners facing foreclosure.
Federal prosecutors an-nounced charges on Thursday against the 41, who they said used fraud to obtain more than US$64 million in loans connected to more than 100 residential properties in New York State, the New York Times reported. News reports said that the FBI, the Secret Service, the New York State Banking Department and other agencies were involved in the investigations that led to the wire fraud, bank fraud and conspiracy charges against the lawyers, mortgage brokers and loan officers, who engaged in complex plots that operated over a period of years.
“The fraud schemes alleged in the cases unsealed today reflect a veritable smorgasbord of scams. Whether the economy was going up or the economy was going down, these alleged fraudsters were working feverishly to game the system.” Preet Bharara, the United States attorney for the Southern District of New York said at a news conference.
The investigation, called Operation Bad Deeds, uncovered eight separate cases in which people were accused of obtaining loans through fraudulent means by falsifying mortgage applications, flipping properties and stripping equity from properties. The targets of the fraud included desperate homeowners who were having difficulty making mortgage payments or facing foreclosure, the Times reported.
It said that on Thursday, 32 people surrendered or were arrested in New York, Pennsylvania, Ohio and North Carolina. Four others had been charged previously, and five more were still at large. Prosecutors said that the largest scheme involved eight people connected to a mortgage brokerage firm in Queens called GuyAmerican Funding Corporation. Among them were Peggy Persaud, 45, of Woodmere, Long Island, who is a loan officer for the GuyAmerican Funding Corporation, which arranged loans from banks, and Ravi Persaud, 43, a lawyer of Glen Head. The two Persauds — with Guyanese connections — and the others are accused of fraudulently obtaining $23 million in loans involving 44 properties, the Times reported.
The indictment said that the defendants in that case recruited “straw purchasers” to buy homes in Brooklyn, Queens and the Bronx, sometimes looking for owners who were desperate to sell. They then resold those properties at inflated prices to other straw buyers, arranging for the new buyers to obtain loans using fraudulent information, according to the article. Peggy Persaud received hundreds of thousands of dollars in commissions based on the fraudulent loans, the indictment said.
Once the second straw buyers obtained loans, some money was transferred to bank accounts controlled by two lawyers, Ravi Persaud and Cheddi Goberdhan, 55, of Elmont, who were hired to represent the lenders, the indictment said. Later, those lawyers issued payments to the straw buyers and others involved, according to the indictment.
After taking control of homes from the first straw buyers, the defendants sometimes continued to flip the properties to other straw buyers, obtaining additional fraudulent loans in the process, the indictment says.
The Times reported that the defendants would eventually strip all the equity from the homes, putting them through sham transactions and saddling the properties with enormous debt.
Meantime, in another case involving a Bronx real estate company called MTC, 10 people were accused of participating in a $5.6 million “foreclosure rescue” scheme in which they sought out troubled mortgage holders facing foreclosure, running radio ads in which they presented themselves as saviours.
An indictment said that the defendants in that case, including the chief of MTC, Lavette M. Bills, duped troubled homeowners into selling their properties at low prices or persuaded them to transfer the deeds to their homes, promising to help solve their financial problems and then return the properties. Instead, prosecutors said, Bills and other defendants flipped those properties to straw buyers at inflated prices subsidized by unaffordable loans that the defendants persuaded lenders to issue based on false documentation.
