U.S. Attorney William J. Hochul Jr. has announced that Elsy Alvarez of Snyder, N.Y., has pleaded guilty before U.S. District Court Richard J. Arcara to a felony charge of wire fraud affecting a financial institution. The charge carries a maximum penalty of 30 years in prison, a fine of $1 million or both. Assistant U.S. Attorney Trini E. Ross, who handled the case, stated that Alvarez was an employee of the Federal Guaranty Mortgage Company based in Florida, and was responsible for preparing loan packages and forwarding the documents to investor financial institutions. In legal transactions, financial institutions purchase loans originated by mortgage companies, allowing the mortgage company to receive immediate payment, and the financial institution the interest paid over time.
The scheme to which Alvarez pleaded guilty involved the defendant signing multiple loan documents using multiple names. Alvarez forwarded these documents to multiple investor financial institutions, one of which was M&T Bank. The defendant knew that by sending the loan documents to multiple financial institutions, a single property had multiple loans in the name of multiple persons, a fact which was not disclosed to the financial institutions. The proceeds of the fraudulent loans were subsequently wired into the account of a company associated with the Federal Guaranty Mortgage Company.
As a result of the defendant's actions, M&T Bank was one of nine financial institutions to suffer a loss. The parties estimated that the total fraud scheme amounted to approximately $24 million.
“For the vast majority of Americans, homeownership both begins with, and depends upon, the issuance of a bona fide mortgage," said U.S. Attorney Hochul. "The defendant’s scheme sought to take advantage of this process, as well as the financial institutions which make the entire process work. As a result of the hard work of our Office’s Mortgage Fraud Task Force, a group specifically dedicated to investigating and prosecuting mortgage scams, the defendant’s scheme now ends in a felony conviction.”
This law enforcement action is also part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement 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.
For more information, visit www.usdoj.gov.