Three Indictments Returned in Mortgage Fraud Schemes

DENVER—A grand jury in Denver recently returned three separate indictments charging wire fraud, bank fraud, and related offenses in three separate mortgage fraud schemes, the United States Attorney’s Office, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, IRS – Criminal Investigation, and the U.S. Secret Service announced.

The first indictment was returned on September 27, 2010. The indictment alleges that starting in January 2005, and continuing through September 2006, Michael Jacoby, Derek Zar, Susanne Zar, and Michael Macy, executed a scheme to defraud various financial institutions and other commercial lenders by means of materially false and fraudulent pretenses and representations. The scheme was executed in connection with real estate transactions involving approximately 29 properties within a 50 mile radius of Denver in which Jacoby was the real estate agent and Derek Zar, Susanne Zar, and Macy were the purchasers. It was part of the scheme to purchase and re-sell homes within a short time period at inflated prices financed by mortgage loans which were obtained through false mortgage applications and false appraisals for the properties. Jacoby recommended an appraiser for the home sales and supplied the appraiser with inflated values of comparable homes so the appraiser would overvalue the home. Then Derek Zar, Macy, and Susanne Zar applied for a mortgage, submitting an application with false statements, and at an inflated amount. Financial institutions and commercial lenders suffered losses through foreclosures on such transactions of over $2,500,000 dollars. In total, defendants received over $500,000 through commissions and home sales.

The second indictment was returned on September 30, 2010, and alleges that starting on June 23, 2005, and continuing through August 31, 2005, the defendant, Demetrius G. Gianopoulos, knowingly executed and attempted to execute a scheme to defraud Countrywide Bank and PHM Financial Incorporated (d/b/a Professional Home Mortgage). The scheme was executed through applications for residential mortgage loans and related documents pertaining to properties purchased by Gianopoulus in Castle Rock and Parker, Colorado. It was part of the scheme for the loan applications Gianopoulus submitted and caused to be submitted to include materially false and fraudulent representations about Gianopoulus’s assets. He provided altered supporting statements from bank accounts, overstated account balances and falsely represented that he had signatory authority on another account. In addition, Gianopoulus made materially false and fraudulent representations about his liabilities and/or rental income. At the time of the closing, Gianopoulus caused over $570,000 in disbursement to Silver Mountain Management or Silver Mountain LLC, which were entities controlled by an associate of his. These disbursements were based on fraudulent invoices from Silver Mountain Investments LLC, which distributed some or all of these monies to accounts controlled by Gianopoulus.

The third indictment was returned on October 1, 2010, and alleges that between July 2007, and continuing through September 2010, Scott Whatcott and Ramona Fricosu executed and attempted to execute a scheme to defraud financial institutions (Wells Fargo Home Mortgage and USAA Federal Savings Bank) and commercial lenders (Sun Trust Mortgage, Taylor, Bean & Whitaker, Nexgen Lending, Inc., and National City Mortgage dba PNC Mortgage). During the scheme to defraud, Whatcott and Fricosu located sellers in the Colorado Springs area who sought to sell their homes due to imminent foreclosure or the sellers’ relocation away from Colorado. Whatcott would tell each owner that he wished to buy the home and that he would obtain a new mortgage or assume the existing mortgage. He told victims that he would make the seller’s future mortgage payments and convince the home seller to transfer the property to him. Whatcott and/or Fricosu would make mortgage payments to the mortgage lender for some period while the scheme to defraud continued. Through a series of fraudulent steps, the defendants would obtain title to the homes. Once the title was obtained, they would sell the property, receiving the sales proceeds without paying the outstanding mortgage.

Those charged include:

• Michael Jacoby, age 42, of Castle Rock, Colorado who was charged with 11 counts of wire fraud and three counts of money laundering. (First Indictment referenced above)
• Derek Zar, age 28, of Commerce City, Colorado who was charged with four counts of wire fraud and one count of money laundering. (First Indictment referenced above)
• Susanne Zar, age 56, of Fredrick, Colorado who was charged with three counts of wire fraud and one count of money laundering. (First Indictment referenced above)
• Michael Macy, age 48, of Commerce City, Colorado who was charged with four counts of wire fraud and two counts of money laundering. (First Indictment referenced above)
• Demetrius Gianopoulos, age 49, of Centennial, Colorado who was charged with one count of wire fraud and two counts of money laundering. (Second Indictment referenced above)
• Ramona Fricosu (aka Ramona Smith), age 36, of Peyton, Colorado who was charged with 22 counts of bank fraud, four counts of wire fraud, seven counts of money laundering and five counts of false statements to a financial institution. (Third Indictment referenced above)
• Scott Whatcott (aka Michael Scott Smith), age 36, who was charged with 23 counts of bank fraud, four counts of wire fraud, two counts of aggravated identity theft, eight counts of money laundering and five counts of false statements to a financial institution. (Third Indictment referenced above)

Bank Fraud and False Statements to a Financial Institution carry a penalty of 30 years’ incarceration and a fine of up to $1,000,000. Money laundering carries a penalty of not more than 10 years’ incarceration and a fine of up to $250,000. Wire fraud carries a penalty of not more than 20 years’ incarceration and not more than a $250,000 fine.

“As the events of the last two years sadly reflect, mortgage fraud is a crime that can cripple our economy,” said U.S. Attorney John Walsh. “As a result, combating mortgage fraud is one of our highest priorities. As these three recent cases demonstrate, federal agents from numerous agencies are investing resources into investigating these types of crimes.”

“IRS-CI stands ready to partner with law enforcement agencies to pursue individuals who commit mortgage fraud,” said Special Agent in Charge Christopher M. Sigerson, IRS Criminal Investigation, Denver Field Office.

“Criminals who utilize the U.S. Mail to engage in mortgage fraud activity don’t just line their own pockets by perpetrating the fraud, but the effect their actions have on the surrounding community are devastating financially,” said Shawn Tiller, Inspector in Charge for the Denver Division of the U.S. Postal Inspection Service. “We are proud to partner with other federal agencies to investigate these crimes.”

“The FBI will continue to work with its law enforcement partners to investigate and prosecute mortgage fraud crimes,” said FBI Special Agent in Charge James Davis.

The cases were investigated by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, IRS – Criminal Investigation, and the U.S. Secret Service.

The cases are being prosecuted by Assistant United States Attorneys Suneeta Hazra, Matthew T. Kirsch, and Patricia Davies, respectively, of the U.S. Attorney’s Office for the District of Colorado.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.