United States Attorney A. Lee Bentley, III announces that Vinston Boxton-Moises (48, San Andres Island, Colombia, South America) pleaded guilty to conspiring with others to distribute five kilograms or more of cocaine, knowing that the cocaine would be unlawfully imported into the United States. Boxton faces a mandatory minimum penalty of 10 years in federal prison and up to a maximum term of life imprisonment.
According to the plea agreement, between 2010 and 2013, Boxton was a knowing and willing participant in an ongoing plan to smuggle cocaine by sea. The cocaine was ultimately destined for unlawful importation into the United States. Boxton’s roles in the conspiracy included recruiting and paying mariners and mechanics, contracting for the use of smuggling and lookout/logistics vessels, and dispatching cocaine-laden go-fast vessels (GFVs).
Boxton is accountable for the GFV TAUPLY that was interdicted by the United States in the Caribbean Sea on May 31, 2012, approximately 85 nautical miles southeast of Nicaragua. The TAUPLY interdiction resulted in the seizure of approximately 1,000 kilograms of cocaine. Boxton arranged for the recruitment and payment of the mariners who ultimately operated TAUPLY and attempted to smuggle the cocaine. The government of Colombia consented to the enforcement of United States law over the TAUPLY, its illicit cargo (cocaine), and crew. The five mariners embarked in TAUPLY were successfully prosecuted in the United States for violations of the Maritime Drug Law Enforcement Act, first arriving at a place in the Middle District of Florida.
Boxton was arrested on San Andres Island, Colombia, in August 2013 and subsequently extradited to the United States for prosecution. As a direct result of his participation in the conspiracy, Boxton obtained at least $1 million in proceeds.
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Wednesday, May 07, 2014
HUGE NATIONWIDE SYNTHETIC DRUG TAKEDOWN #ProjectSynergyPhaseII continues attack on drug networks, sources of supply, global money flow
The Drug Enforcement Administration (DEA), Customs and Border Protection (CBP), Immigration and Customs Enforcement Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) and other federal, state, and local partners announced the culmination of Project Synergy Phase II, an ongoing effort targeting every level of the dangerous global synthetic designer drug market. Since January and leading up to early this morning, nationwide enforcement operations have taken place targeting these drug trafficking organizations that have operated in communities across the country.
The second phase of the Project Synergy, which began January 2014, culminated this morning in 29 states, involves more than 45 DEA offices serving nearly 200 search warrants. As of today, more than 150 individuals have been arrested and federal, state and local law enforcement authorities have seized hundreds of thousands of individually packaged, ready-to-sell synthetic drugs as well as hundreds of kilograms of raw synthetic products to make thousands more. Additionally, more than $20 million in cash and assets were seized. These numbers are expected to grow as investigations continue.
The Special Operations Division-coordinated Project Synergy initiative is aimed at bringing together federal, state, local, and international law enforcement resources to target the dangerous global synthetic designer drug industry through coordinated, united strategies.
In addition to targeting retailers, wholesalers, and manufacturers, many of these investigations continued to uncover the massive flow of drug-related proceeds to countries in the Middle East, including Yemen, Jordan, Syria, and Lebanon, and as well as other countries. Investigations also targeted many trade implements such as organic leaves and packaging material used in preparation for drug re-sale and distribution. These facilitators are key players in this ever-changing designer drug industry.
Communities, families, and individuals across the United States have experienced the scourge of designer synthetic drugs, which are often marketed as herbal incense, bath salts, jewelry cleaner, or plant food. These dangerous drugs have caused significant abuse, addiction, overdoses, and emergency room visits. Those who have abused synthetic drugs have suffered vomiting, anxiety, agitation, irritability, seizures, hallucinations, tachycardia, elevated blood pressure, and loss of consciousness. They have caused significant organ damage as well as overdose deaths. Over the past five years, DEA has identified between 200 and 300 new designers drugs from eight different structural classes, the vast majority of which are manufactured in China.
“Many who manufacture, distribute and sell these dangerous synthetic drugs found out first hand today that DEA will target, find and prosecute those who have committed these crimes,” said DEA Administrator Michele M. Leonhart. “The success of Project Synergy II could not have been possible without the assistance of our state, local and foreign law enforcement partners. We stand united in our commitment to aggressively pursue criminals who are all too willing to experiment on our children and young adults.”
“Tragically, people die every day at the hands of illegal designer drugs," said ICE Deputy Director Daniel Ragsdale, “Through operations like this, we strike a blow to drug dealers and continue an important national conversation about the dangers associated with drug use.”
“This is another example of the partnership between CBP, HSI, and DEA to share information and participate in joint efforts to keep synthetic drugs out of the country, off the streets, and out of our communities,” said CBP Commissioner R. Gil Kerlikowske. “The specialized expertise of our CBP officers as well as the unique capabilities of CBP scientists play a vital role in contributing to the seizure and identification of these potentially deadly substances at the border.”
The first phase of Project Synergy began in December of 2012, and resulted in more than 227 arrests and 416 search warrants served in 35 states, 49 cities and five countries, along with more than $60 million in cash and assets seized. Altogether, 9,445 kilograms of individually packaged, ready-to-sell synthetic drugs, 299 kilograms of cathinone drugs (the falsely labeled “bath salts”), 1,252 kilograms of synthetic cannabinoid drugs (used to make the so-called “fake pot” or herbal incense products), and 783 kilograms of treated plant material were seized.
As was the case in the June 2013 culmination of the first phase of Project Synergy, CBP’s National Targeting Center played a significant role in the continued success of this initiative. As part of this effort, CBP was responsible for identifying and targeting high-risk express consignment shipments suspected of containing synthetic drugs. One of the keys to the success of Project Synergy is the cooperation between CBP and DEA, who routinely share information and intelligence with each other and other partners such as DHS-HSI to strengthen and further these investigations. (see B-roll video link below)
Chemists and other scientists from DEA’s Office of Forensic Science, as well as CBP scientists across the country, were instrumental in identifying synthetic drugs and compounds designed to circumvent U.S. controlled substance classifications. The identifying of these compounds allowed investigators and prosecutors to quickly act during the course of these investigations. As a result of these cooperative efforts between DEA and CBP through the Special Operations Division, CBP has seized over 3,000 kilograms of illicit designer drugs. Intelligence has also been shared with other nations such as Australia and other international partners, who have in turn seized hundreds of kilograms of illicit designer substances such as cannabinoids, cathinones and GHB.
The second phase of the Project Synergy, which began January 2014, culminated this morning in 29 states, involves more than 45 DEA offices serving nearly 200 search warrants. As of today, more than 150 individuals have been arrested and federal, state and local law enforcement authorities have seized hundreds of thousands of individually packaged, ready-to-sell synthetic drugs as well as hundreds of kilograms of raw synthetic products to make thousands more. Additionally, more than $20 million in cash and assets were seized. These numbers are expected to grow as investigations continue.
The Special Operations Division-coordinated Project Synergy initiative is aimed at bringing together federal, state, local, and international law enforcement resources to target the dangerous global synthetic designer drug industry through coordinated, united strategies.
In addition to targeting retailers, wholesalers, and manufacturers, many of these investigations continued to uncover the massive flow of drug-related proceeds to countries in the Middle East, including Yemen, Jordan, Syria, and Lebanon, and as well as other countries. Investigations also targeted many trade implements such as organic leaves and packaging material used in preparation for drug re-sale and distribution. These facilitators are key players in this ever-changing designer drug industry.
Communities, families, and individuals across the United States have experienced the scourge of designer synthetic drugs, which are often marketed as herbal incense, bath salts, jewelry cleaner, or plant food. These dangerous drugs have caused significant abuse, addiction, overdoses, and emergency room visits. Those who have abused synthetic drugs have suffered vomiting, anxiety, agitation, irritability, seizures, hallucinations, tachycardia, elevated blood pressure, and loss of consciousness. They have caused significant organ damage as well as overdose deaths. Over the past five years, DEA has identified between 200 and 300 new designers drugs from eight different structural classes, the vast majority of which are manufactured in China.
“Many who manufacture, distribute and sell these dangerous synthetic drugs found out first hand today that DEA will target, find and prosecute those who have committed these crimes,” said DEA Administrator Michele M. Leonhart. “The success of Project Synergy II could not have been possible without the assistance of our state, local and foreign law enforcement partners. We stand united in our commitment to aggressively pursue criminals who are all too willing to experiment on our children and young adults.”
“Tragically, people die every day at the hands of illegal designer drugs," said ICE Deputy Director Daniel Ragsdale, “Through operations like this, we strike a blow to drug dealers and continue an important national conversation about the dangers associated with drug use.”
“This is another example of the partnership between CBP, HSI, and DEA to share information and participate in joint efforts to keep synthetic drugs out of the country, off the streets, and out of our communities,” said CBP Commissioner R. Gil Kerlikowske. “The specialized expertise of our CBP officers as well as the unique capabilities of CBP scientists play a vital role in contributing to the seizure and identification of these potentially deadly substances at the border.”
The first phase of Project Synergy began in December of 2012, and resulted in more than 227 arrests and 416 search warrants served in 35 states, 49 cities and five countries, along with more than $60 million in cash and assets seized. Altogether, 9,445 kilograms of individually packaged, ready-to-sell synthetic drugs, 299 kilograms of cathinone drugs (the falsely labeled “bath salts”), 1,252 kilograms of synthetic cannabinoid drugs (used to make the so-called “fake pot” or herbal incense products), and 783 kilograms of treated plant material were seized.
As was the case in the June 2013 culmination of the first phase of Project Synergy, CBP’s National Targeting Center played a significant role in the continued success of this initiative. As part of this effort, CBP was responsible for identifying and targeting high-risk express consignment shipments suspected of containing synthetic drugs. One of the keys to the success of Project Synergy is the cooperation between CBP and DEA, who routinely share information and intelligence with each other and other partners such as DHS-HSI to strengthen and further these investigations. (see B-roll video link below)
Chemists and other scientists from DEA’s Office of Forensic Science, as well as CBP scientists across the country, were instrumental in identifying synthetic drugs and compounds designed to circumvent U.S. controlled substance classifications. The identifying of these compounds allowed investigators and prosecutors to quickly act during the course of these investigations. As a result of these cooperative efforts between DEA and CBP through the Special Operations Division, CBP has seized over 3,000 kilograms of illicit designer drugs. Intelligence has also been shared with other nations such as Australia and other international partners, who have in turn seized hundreds of kilograms of illicit designer substances such as cannabinoids, cathinones and GHB.
Details of Nancy Dobrowski, Former Burnham Village Clerk, Charged with Stealing at Least $650,000 from Revenue Payments and Filing False Tax Return
The former longtime elected clerk for the Village of Burnham was charged today with stealing more than $650,862 from her office at the south suburb’s village hall and using most of the cash to gamble at casinos. The defendant, Nancy Dobrowski, was charged with one count each of wire fraud and filing a false federal income tax return in a criminal information filed in U.S. District Court.
Dobrowski, 70, of Burnham, served as Burnham’s elected clerk from 1980 until she resigned on May 29, 2013, when FBI agents executed a federal search warrant at the clerk’s village hall office. Through her attorney, Dobrowski authorized the government to disclose that she will plead guilty to the charges. No date has been set yet for Dobrowski to be arraigned in federal court.
As clerk, Dobrowski was responsible for managing Burnham’s finances and depositing cash and checks collected by the clerk’s office into the village’s bank accounts.
Between at least 2004 and May 2013, Dobrowski allegedly took cash the village received as payment for fees and fines from the public. She then used most of the cash to gamble at casinos in Indiana and elsewhere either by taking cash to casinos or by depositing the money into her personal bank account and then withdrawing it from automated teller machines at casinos. She falsely represented the village’s finances to auditors and covered up her fraud scheme by causing false entries in village books, according to the charges.
As part of the fraud scheme, Dobrowski allegedly took cash from both the village cash register and the collection of money received as tow bonds. She recorded false amounts of tow bond money that had been received to make it appear that the village collected less cash than it had actually received, and sometimes she used tow bond money to balance the cash register, the charges allege.
To conceal her misappropriation of cash from the village cash register, Dobrowski waited a week to deposit cash into the village’s bank accounts instead of making daily deposits. By delaying deposits, Dobrowski could use funds received by the village in the later week to make up for funds she had taken during the prior week, making the deposit appear to match the revenues despite having taken cash from the register, the information alleges.
Dobrowski allegedly further concealed the scheme by failing to record checks received from the public as payment for village fees and services. She would place the unrecorded checks into the register to compensate for an equal amount of cash she had taken, making the register appear balanced. She provided false information to the village’s outside audit firm regarding the village’s revenues and regularly disposed of the cash register tape to conceal that the village’s revenues often did not match the deposits into village bank accounts.
Dobrowski was also charged with filing a false federal income tax return for 2012, when she reported total income of $309,181, knowing that her total income was substantially greater than that because she failed to report the cash she misappropriated from the village in 2012 as income.
Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine or an alternate fine totaling twice the gross loss or gain, whichever is greater. Filing a false federal income tax return carries a maximum penalty of three years in prison, a $250,000 fine, and mandatory costs of prosecution. Restitution is mandatory and defendants convicted of tax offenses remain liable for back taxes, interest, and a civil penalty of up to 75 percent of the amount owed.
Dobrowski, 70, of Burnham, served as Burnham’s elected clerk from 1980 until she resigned on May 29, 2013, when FBI agents executed a federal search warrant at the clerk’s village hall office. Through her attorney, Dobrowski authorized the government to disclose that she will plead guilty to the charges. No date has been set yet for Dobrowski to be arraigned in federal court.
As clerk, Dobrowski was responsible for managing Burnham’s finances and depositing cash and checks collected by the clerk’s office into the village’s bank accounts.
Between at least 2004 and May 2013, Dobrowski allegedly took cash the village received as payment for fees and fines from the public. She then used most of the cash to gamble at casinos in Indiana and elsewhere either by taking cash to casinos or by depositing the money into her personal bank account and then withdrawing it from automated teller machines at casinos. She falsely represented the village’s finances to auditors and covered up her fraud scheme by causing false entries in village books, according to the charges.
As part of the fraud scheme, Dobrowski allegedly took cash from both the village cash register and the collection of money received as tow bonds. She recorded false amounts of tow bond money that had been received to make it appear that the village collected less cash than it had actually received, and sometimes she used tow bond money to balance the cash register, the charges allege.
To conceal her misappropriation of cash from the village cash register, Dobrowski waited a week to deposit cash into the village’s bank accounts instead of making daily deposits. By delaying deposits, Dobrowski could use funds received by the village in the later week to make up for funds she had taken during the prior week, making the deposit appear to match the revenues despite having taken cash from the register, the information alleges.
Dobrowski allegedly further concealed the scheme by failing to record checks received from the public as payment for village fees and services. She would place the unrecorded checks into the register to compensate for an equal amount of cash she had taken, making the register appear balanced. She provided false information to the village’s outside audit firm regarding the village’s revenues and regularly disposed of the cash register tape to conceal that the village’s revenues often did not match the deposits into village bank accounts.
Dobrowski was also charged with filing a false federal income tax return for 2012, when she reported total income of $309,181, knowing that her total income was substantially greater than that because she failed to report the cash she misappropriated from the village in 2012 as income.
Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine or an alternate fine totaling twice the gross loss or gain, whichever is greater. Filing a false federal income tax return carries a maximum penalty of three years in prison, a $250,000 fine, and mandatory costs of prosecution. Restitution is mandatory and defendants convicted of tax offenses remain liable for back taxes, interest, and a civil penalty of up to 75 percent of the amount owed.
David Wax Admits Role in Conspiracy to Kidnap Jewish Husband to Force Him to Give Wife a Religious Divorce
A Lakewood, New Jersey, man admitted conspiring to kidnap a Jewish man to force him to give his wife a religious divorce, known as a get, U.S. Attorney Paul J. Fishman announced.
David Wax, 51, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to commit kidnapping. According to documents filed in this case and statements made in court:
In October 2010, Wax and his conspirators agreed to force a Jewish man (Victim One) to give his wife a get, a document which, according to Jewish law, must be presented by a husband to his wife to effect their divorce. Wax then lured Victim One from Brooklyn, New York, to Wax’s home in Lakewood on October 17, 2010, under the pretense that Victim One would work on Talmudic books that Wax was publishing. When the victim arrived, he was brought upstairs, blindfolded, handcuffed, and bound. Victim One was then assaulted by Wax and his conspirators until he provided the get.
Victim One’s wife’s family paid Wax approximately $100,000 to obtain the forced get. Wax’s conspirators received approximately $50,000.
The conspiracy to commit kidnapping charge carries a maximum potential penalty of life in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for August 19, 2014.
David Wax, 51, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to commit kidnapping. According to documents filed in this case and statements made in court:
In October 2010, Wax and his conspirators agreed to force a Jewish man (Victim One) to give his wife a get, a document which, according to Jewish law, must be presented by a husband to his wife to effect their divorce. Wax then lured Victim One from Brooklyn, New York, to Wax’s home in Lakewood on October 17, 2010, under the pretense that Victim One would work on Talmudic books that Wax was publishing. When the victim arrived, he was brought upstairs, blindfolded, handcuffed, and bound. Victim One was then assaulted by Wax and his conspirators until he provided the get.
Victim One’s wife’s family paid Wax approximately $100,000 to obtain the forced get. Wax’s conspirators received approximately $50,000.
The conspiracy to commit kidnapping charge carries a maximum potential penalty of life in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for August 19, 2014.
HTFC Mortgage Banker and Five Others Indicted in $30 Million Bank Fraud Conspiracy
An indictment was unsealed charging six men with carrying out a $30 million bank fraud conspiracy by fraudulently inflating the prices of homes for sale and then obtaining mortgages that far exceeded the true collateral value of properties in Nassau and Suffolk Counties. Through his mortgage banking company, defendant Aaron Wider and his co-conspirators allegedly then re-sold these “toxic” mortgages to banks and other investors in the secondary mortgage market, causing millions in losses when the loans went into foreclosure. Four of the defendants were arrested and will be presented for arraignment at the United States Courthouse in Central Islip, New York, before United State Magistrate Judge Gary R. Brown. Of the remaining two defendants, one was taken into custody in Florida, while another is scheduled to surrender to federal agents in Central Islip.
The indictment and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.
“The conduct charged in the indictment is a prime example of the type of corrupt mortgage-lending practices that preceded the bursting of the real estate bubble, the loss of faith in securitized mortgage obligations, and the financial collapse of 2007 and 2008,” stated United States Attorney Lynch. “Instead of using their skills in banking, the law, and investing to assist individuals pursuing the American Dream, the defendants cooked up a sophisticated scheme that defrauded lenders and then fed toxic debt to the investigating public at large in the secondary mortgage market. I would like to thank the investigators at the Nassau County District Attorney’s Office and New York State Department of Financial Services for their invaluable assistance in this investigation.”
FBI Assistant Director in Charge Venizelos said, “As alleged in the indictment, during the height of the real estate boom, these defendants devised a scheme to turn a profit at the expense of unsuspecting lenders, investors, and members of the public. Mortgage fraud poses a threat to our financial systems and to our economy. This case should send a clear message to all individuals who try to game our financial market: you will be identified and held accountable for your criminal acts. The FBI, along with our law enforcement partners, will continue to investigate those who orchestrate and participate in various mortgage fraud schemes in order to protect the public against those who seek to damage our economy.”
According to the indictment and other court filings, between 2003 and 2008, defendant Aaron Wider operated a New York State licensed mortgage bank in Garden City, New York, called HTFC Corp., which issued residential mortgages to borrowers. HTFC did not possess assets to fund these loans but relied on funding from other banks and financial institutions, commonly known as “warehouse lenders.” The warehouse lenders relied on Wider and HTFC to ensure that home buyers were able to pay the mortgages and that the market value of the homes fully collateralized the loans.
Instead, Wider and the co-defendants allegedly engineered a complex series of same-day sham transactions, or “flips,” to artificially inflate the prices of homes. Then, they lied to the warehouse lenders to obtain mortgage funding that was 80 percent more than the actual value of the homes. Wider and co-defendants Manjeet Bawa, John Petiton, and Joseph Ferrara contracted to buy homes in Nassau and Suffolk Counties from innocent sellers at market prices. The defendants then submitted fraudulent loan applications to the warehouse lenders that nearly doubled the true sales prices of the homes. The defendants also inflated their personal assets and concealed significant liabilities to get loan approval.
At each closing, Petiton, an attorney admitted to practice in New York State, oversaw the actual sales to innocent sellers and simultaneously created sham trusts into which title to the properties was transferred for no money. He and the co-conspirators then immediately transferred title back to the co-defendants at nearly double the price to create a false paper trail documenting the artificially inflated prices. Meanwhile, real estate appraiser Joseph Mirando prepared false appraisal reports to justify the inflated prices, while HTFC closing attorney Eric Finger concealed the far lower, true sales price for properties by lying on federal-mandated settlement forms. Finger received wire transfers of funds from the warehouse lenders and, after paying the innocent third-party sellers, disbursed the surplus money fraudulently obtained in the mortgages to his fellow co-conspirators.
HTFC sold each of its mortgages in the secondary market. On paper, the loans appeared to be attractive investments because HTFC’s mortgages carried high rates of return that were supposedly fully collateralized by the market value of homes and the assets and incomes of the borrowers or mortgagors. Upon buying mortgages from HTFC, the secondary market bank paid off the warehouse lenders and then either collected the principal and interest or bundled them into mortgage-backed securities that were sold to pension funds, hedge funds, and other investors seeking relatively secure, high-yield investments. When HTFCs mortgages went into foreclosure beginning in 2007 and 2008, the secondary market investors discovered that the actual value of the collateral was 80 percent less than the amount borrowed for each home.
The charges in the indictment are merely allegations, and the defendants presumed innocent unless and until proven guilty. If convicted, the defendants face up to 30 years’ imprisonment. The indictment unsealed today also seeks to forfeit 19 residential properties traced to the bank fraud or up to $30 million in a money judgment.
The case is being prosecuted by Assistant U.S. Attorney James Miskiewicz.
Defendants:
MANJEET BAWA, age 46, Dix Hills, New York
JOSEPH FERRARA, age 70, Long Beach, New York
ERIC FINGER, age 48, Miami, Florida
JOSEPH MIRANDO, age 54, Centereach, NY
JOHN PETITON age 68, Garden City, New York
AARON WIDER age 50, Copiague, New York
The indictment and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.
“The conduct charged in the indictment is a prime example of the type of corrupt mortgage-lending practices that preceded the bursting of the real estate bubble, the loss of faith in securitized mortgage obligations, and the financial collapse of 2007 and 2008,” stated United States Attorney Lynch. “Instead of using their skills in banking, the law, and investing to assist individuals pursuing the American Dream, the defendants cooked up a sophisticated scheme that defrauded lenders and then fed toxic debt to the investigating public at large in the secondary mortgage market. I would like to thank the investigators at the Nassau County District Attorney’s Office and New York State Department of Financial Services for their invaluable assistance in this investigation.”
FBI Assistant Director in Charge Venizelos said, “As alleged in the indictment, during the height of the real estate boom, these defendants devised a scheme to turn a profit at the expense of unsuspecting lenders, investors, and members of the public. Mortgage fraud poses a threat to our financial systems and to our economy. This case should send a clear message to all individuals who try to game our financial market: you will be identified and held accountable for your criminal acts. The FBI, along with our law enforcement partners, will continue to investigate those who orchestrate and participate in various mortgage fraud schemes in order to protect the public against those who seek to damage our economy.”
According to the indictment and other court filings, between 2003 and 2008, defendant Aaron Wider operated a New York State licensed mortgage bank in Garden City, New York, called HTFC Corp., which issued residential mortgages to borrowers. HTFC did not possess assets to fund these loans but relied on funding from other banks and financial institutions, commonly known as “warehouse lenders.” The warehouse lenders relied on Wider and HTFC to ensure that home buyers were able to pay the mortgages and that the market value of the homes fully collateralized the loans.
Instead, Wider and the co-defendants allegedly engineered a complex series of same-day sham transactions, or “flips,” to artificially inflate the prices of homes. Then, they lied to the warehouse lenders to obtain mortgage funding that was 80 percent more than the actual value of the homes. Wider and co-defendants Manjeet Bawa, John Petiton, and Joseph Ferrara contracted to buy homes in Nassau and Suffolk Counties from innocent sellers at market prices. The defendants then submitted fraudulent loan applications to the warehouse lenders that nearly doubled the true sales prices of the homes. The defendants also inflated their personal assets and concealed significant liabilities to get loan approval.
At each closing, Petiton, an attorney admitted to practice in New York State, oversaw the actual sales to innocent sellers and simultaneously created sham trusts into which title to the properties was transferred for no money. He and the co-conspirators then immediately transferred title back to the co-defendants at nearly double the price to create a false paper trail documenting the artificially inflated prices. Meanwhile, real estate appraiser Joseph Mirando prepared false appraisal reports to justify the inflated prices, while HTFC closing attorney Eric Finger concealed the far lower, true sales price for properties by lying on federal-mandated settlement forms. Finger received wire transfers of funds from the warehouse lenders and, after paying the innocent third-party sellers, disbursed the surplus money fraudulently obtained in the mortgages to his fellow co-conspirators.
HTFC sold each of its mortgages in the secondary market. On paper, the loans appeared to be attractive investments because HTFC’s mortgages carried high rates of return that were supposedly fully collateralized by the market value of homes and the assets and incomes of the borrowers or mortgagors. Upon buying mortgages from HTFC, the secondary market bank paid off the warehouse lenders and then either collected the principal and interest or bundled them into mortgage-backed securities that were sold to pension funds, hedge funds, and other investors seeking relatively secure, high-yield investments. When HTFCs mortgages went into foreclosure beginning in 2007 and 2008, the secondary market investors discovered that the actual value of the collateral was 80 percent less than the amount borrowed for each home.
The charges in the indictment are merely allegations, and the defendants presumed innocent unless and until proven guilty. If convicted, the defendants face up to 30 years’ imprisonment. The indictment unsealed today also seeks to forfeit 19 residential properties traced to the bank fraud or up to $30 million in a money judgment.
The case is being prosecuted by Assistant U.S. Attorney James Miskiewicz.
Defendants:
MANJEET BAWA, age 46, Dix Hills, New York
JOSEPH FERRARA, age 70, Long Beach, New York
ERIC FINGER, age 48, Miami, Florida
JOSEPH MIRANDO, age 54, Centereach, NY
JOHN PETITON age 68, Garden City, New York
AARON WIDER age 50, Copiague, New York
Related Headlines
Aaron Wider,
Eric Ringer,
John Petiton,
Joseph Ferrara,
Joseph Mirando,
Manjeet Bawa
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