Financial Fraud Task Force Produces Two Guilty Pleas
However, on a lesser scale the task force has been very effective. The task force was put into effect to wage a pre-emptive, aggressive, and synchronized effort in scrutinizing and prosecuting crimes related to the financial industry through its investigations. The task force is made up of more than ninety-four U.S. Attorneys' offices, twenty federal agencies, as well as individual state and local allies. It is the most extensive partnership of law enforcement, investigatory and regulatory units ever amassed to battle fraud. Since its inception, there have been numerous arrests and convictions. Some of the major arrests and convictions that have transpired since the task force has been active are listed below leading up to two guilty pleas that were achieved this week:
In June 2012, in Ohio, a financial services company, inappropriately named Fair Financial Company came under the scrutiny of the task force. Upon completion of its investigation, three former executives of the firm were brought to trial and subsequently found guilty for their parts in a plot to swindle roughly five thousand investors. The illicit proceeds gained by the defendants amounted to more than two-hundred million dollars.
The investigation was a joint effort in coordination with the Financial Fraud Enforcement Task Force in association with the FBI, the U.S. Attorney for the Southern District of Indiana, and the Criminal Division of the Justice Department.
Just a few weeks ago, on December 4, two principals of two separate Law Groups were arrested for the operation of their firms; America's Law Group and the Rodis Law Group. The companies allegedly offered to provide phony loan modification assistance to homeowners that were struggling with their current payments. Federal agents arrested Charles Wayne Farris, 53, and Bryan D'Antonio, 47, both residents of California for their roles in the setup of the scheme. Federal agents also announced the surrender of a third defendant. Attorney Ronald Rodis, 49, also a California resident. Rodis has been brought up on charges which alleged that he lent the law license he earlier held as well as his name, in addition to partaking in the duplicitous operation.
The three were all named in a federal indictment by the IRS-Criminal Investigation and the FBI as part of the Financial Fraud Enforcement's task force.
The latest bust took place closer to home earlier this week when a New Jersey tax preparer and an attorney acknowledged their parts in a large-scale mortgage fraud that's been going on for an extended period of time. This fraud triggered more than thirty-million dollars in losses, according to U.S. Attorney Paul J. Fishman.
Kenneth Jones, 64, an Elizabeth, N.J. resident and Michael Rumore, 55, of Toms River, N.J., both pleaded guilty in U.S. Federal court in Newark, N.J., to Informations charging the pair with conspiracy to commit bank fraud. The guilty pleas were heard by U.S. District Judge Esther Salas. In addition to accepting the plea for bank fraud, Mr. Jones also pleaded guilty to aiding and abetting filing of fraudulent and bogus tax returns.
According to testimony pronounced in court, and papers filed in the case, between the years of 2006 through 2010, Jones, Rumore and several other individuals were involved in two connected mortgage fraud conspiracies by means of a business called Premier Mortgage Services (PMS), which engaged as a mortgage brokerage
The scheme targeted individuals who financed low-income properties throughout areas within the state of New Jersey. The scam initiated with the recruitment of "straw buyers." A straw buyer is an individual or company who buys an entity on behalf of another individual or company. They're used when the actual buyer can't complete the specified transaction for a number of reasons. Using "straw buyers." is not essentially illegal, except in circumstances where the involved transaction comprises a fraud or in a case when the "straw buyers" are acquiring goods for individuals that are legally banned from conducting the specific transaction.
Once the "straw buyers" were set into place, a variety of falsified documents; were used of which a certain amount were fashioned by Jones. This was done to transmit the impression that the "straw buyers" controlled and/or owned a greater value of assets and netted a greater amount of revenue than they did in reality. These documents were then submitted as a portion of mortgage loan applications to financial entities. With the belief that the falsified paper work was factual, the financial bodies delivered loans for the properties to be financed. At the closings the collaborators split the receipts from the mortgages, including those managed by Rumore. The closings advanced through the use of falsified statements of settlement, which concealed the true endpoints and sources of the mortgage monies provided by the financial institutions.
The "straw buyers." never had substantial resources to pay the new mortgages obliging a substantial amount of the properties to be forced into foreclosure. The estimated total cost involved in the fraud perpetrated by the conspirators totaled losses in the area of more than $30 million to the defrauded financial institutions.
In lieu of their guilty pleas for the count of bank fraud conspiracy, Rumore and Jones now face a maximum potential penalty of thirty years of incarceration as well as a fine of one million dollars. Jones also faces a punishment of a maximum prospective penalty of three years in prison and an additional fine of $250,000 for the aiding and abetting of the false tax returns.
The case was handled in coordination with the president's Financial Fraud Enforcement Task Force. U.S. Attorney Paul J. Fishman for the District of New Jersey recognized special agents of the FBI, as well as special agents of IRS-Criminal Investigation for the results of the investigation that led to the guilty plea. Additionally, Fishman thanked the Social Security Administration-Office of Inspector General's Office, for its contribution in the investigation.
Zach Intrater of the Criminal Division and AUSA Rahul Agarwal of the U.S. Attorney's Office Special Prosecutions Division have been prosecuting the case for the government.