One example, but you should

Man Jailed for Straw Buyer and Kickback Scam

Mortgage Fraud, April 2, 2014

Simon H. Aouad, 35, Garnet Valley, Pennsylgania, was sentenced to 70 months in prison and restitution of $5,462,682 for a mortgage fraud scheme involving fraudulently obtained mortgages to purchase properties in North Wildwood, New Jersey, and Dorchester, Masschusetts, and a bank fraud scheme involving fraudulently obtained lines of credit at Wachovia Bank, now Wells Fargo Bank.

Aouad pleaded guilty to conspiracy, mail fraud, and bank fraud. He was involved in three schemes.

In the first, properties primarily located in North Wildwood, New Jersey, were purchased for inflated sale prices and using false borrower income and asset information so that the buyers could obtain kickbacks totaling tens of thousands of dollars, which were not disclosed to the lenders. In the second, lines of credit at Wachovia Bank were obtained using false borrower income and employment information. In the third, the conspirators arranged for sham real estate transactions involving properties located in Dorchester, Massachusetts, in which a straw buyer would purchase properties from one of the conspirators for inflated prices. The sham sales were financed with fraudulently obtained mortgages. The conspirators split the proceeds of the sham sales.

Aouad's co-conspirators in the North Wildwood scheme included John C. Lucidi, Jr., Daniel Mumbower (who was, at the time, an employee of Wachovia Bank), Timothy Cook, Eric Maratea, and Eric Itzi, all of whom have pleaded guilty to charges stemming from the mortgage fraud scheme. Aouad brought willing buyers, such as Cook, Maratea, and Itzi, to Lucidi, in exchange for fees and kickbacks for each successful buyer. In the Massachusetts mortgage fraud scheme, Aouad identified straw buyers for his co-conspirators, which included a former mortgage broker, and Aouad shared in the proceeds of the sham sales. The mortgages Aouad facilitated in both schemes went into default and caused losses to the lenders of a little more than $5 million.

Aouad's co-conspirators in the bank fraud scheme included a loan broker by the name of Gerald Cathie, who is charged elsewhere, as well as Daniel Mumbower, a corrupt Wachovia Bank loan officer. Similar to his role in the mortgage fraud schemes, Aouad facilitated the fraudulently obtained Wachovia Bank lines of credit by bringing borrowers to Cathie and Mumbower to apply for the lines of credit using false income and other information. When the loans were funded, the borrowers paid Cathie a fee of five to seven percent of the amount of loan proceeds, Cathie kicked money back to the loan officer, and the loan officer paid Aouad several thousand dollars from the loan proceeds for his role in identifying the borrower. The Wachovia Bank loans that Aouad facilitated went into default and caused losses to Wachovia Bank of approximately $400,000.

In addition to the prison term and restitution, U.S. District Court Judge C. Darnell Jones, II, ordered forfeiture of $3,675,468, a $400 special assessment, and five years of supervised release.

 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, and the United States Secret Service. It was prosecuted by Assistant United States Attorneys Nancy E. Potts.