-faces long prison term

A Guyanese real estate attorney was on August 26th convicted in a multi-million-dollar mortgage fraud in New York and faces a maximum sentence of 120 years in prison.

According to a release from the US Attorney’s Office Southern District of New York, attorney Ravi Persaud, 44, of Glen Head, New York and George Esso, a former loan officer were found guilty of participating in the mortgage fraud scheme through GuyAmerican Funding Corp, a mortgage brokerage based in Queens, New York.

The scheme entailed the use of fraudulent loan applications designed to con banks into lending to unqualified borrowers for the purchase of residential properties in the New York City area.

They were charged with eight other defendants in a scheme that defrauded banks of more that US$23M in home mortgage loans. The release said that according to the superseding indictment and evidence presented in the court of US District Judge Shira A. Scheindlin, Persaud and Esso engaged in a massive fraud scheme via a branch office of GuyAmerican Funding located on Liberty Avenue in Jamaica, NY. Esso, according to the release, received thousands of dollars in commissions based on bogus loan applications tendered to lenders.

“In particular, Esso was personally involved in submitting loan applications on behalf of borrowers that contained numerous false statements relating to the borrowers’ income, employment, and residence. For example, Esso and another loan officer, Peggy Persaud, agreed to list fake jobs on the borrowers’ loan applications in order to convince banks that the borrowers made more money than they actually did and were therefore a good credit risk. Esso directly participated in obtaining over (US)$1 million in fraudulent mortgages through false statements.

Several of the co-conspirators charged as part of the scheme worked with GuyAmerican loan officers to recruit homeowners in financial distress who were willing to sell their homes. These co-conspirators used “straw buyers” —persons who posed as home buyers in exchange for a fee, but who had no intention of living in the mortgaged properties— to perpetrate the scheme. The co-conspirators then arranged home sales between the distressed sellers and the straw buyers, frequently using the same straw buyer to obtain multiple mortgage loans, and all using fraudulent representations about the supposed purchasers’ net worth, employment, and income”, the release said. Peggy Persaud had earlier pleaded guilty in the case.

Ravi Persaud acted as the closing attorney in connection with many of the illicit transactions including on loans in which the same straw buyer was employed to purchase multiple properties within a short period, according to the US case.

The release said that after the closing, Ravi Persaud was supposed to represent the interests of the bank in connection with the real estate transaction and disburse the loan proceeds according to a schedule that he provided to the bank but this did not happen.

“Instead, the evidence established that Ravi Persaud acted at the behest of his co-conspirators in the scheme, receiving the loan proceeds into his attorney account and subsequently making illicit payments from the loan proceeds to his co-conspirators. Ravi Persaud also assisted the scheme by writing (cheques) to co-conspirators in order to set aside six months worth of mortgage payments from the closing proceeds, so that the lenders would not discover the scheme. He further concealed these payments by sending false documents to the banks regarding how the loan proceeds were being distributed”, the release said.

Ravi Persaud was convicted of one count of bank and wire fraud and three counts of bank fraud and faces a maximum sentence of 120 years in prison, the release said.

Esso, of St Albans, New York was convicted of one count of conspiracy to commit bank and wire fraud and three counts of bank fraud and faces a maximum penalty of 60 years in prison.

The defendants will also be required to pay restitution to victims and to forfeit the proceeds of their crime.

Orette Killikelly and Elton Lord previously pleaded guilty to their charge while the case against Cheddi Goberdhan is still pending.

United States Attorney for the Southern District of New York, Preet Bharara praised the work of the FBI in the case. “The real estate professionals found guilty yesterday sacrificed their licenses to their greed, and sought to profit at the expense of the banks that relied upon them. This verdict sends the clear message that we will continue to work tirelessly, together with our law enforcement partners, to prosecute mortgage fraud and to hold professionals accountable when they cease to be gatekeepers and decide to join the fraud themselves”, the release quoted him as saying.

The case was part of “Operation Bad Deeds,” a joint federal, state, and local law enforcement operation targeting mortgage fraud crimes, announced on October 15, 2009, in which 41 defendants were charged in various mortgage fraud scams in New York, Pennsylvania, Ohio, and North Carolina.

The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.