Preet Bharara, the United States Attorney for the Southern District of New York, has announced that David Ramnauth, the former president of the Queens, N.Y.-based mortgage brokerage GuyAmerican Funding Corporation, was sentenced to 30 months in prison for his role in a massive mortgage fraud scheme in which over $23 million in fraudulent loans were processed in connection with over 44 properties in the New York metropolitan area. Ramnauth pled guilty to his role in the mortgage fraud scheme in August 2010.
"As the president of a mortgage brokerage that was little more than a fraud mill, David Ramnauth abdicated his professional responsibility just to make a quick buck," said Bharara. "Today’s sentence makes clear that corrupt gatekeepers like Ramnauth who perpetrated these schemes will be punished for their crimes. Along with our law enforcement partners, we will continue to investigate and punish those who perpetrate and profit from mortgage fraud."
According to the indictment and other documents previously filed in Manhattan federal court and statements made in court:
Ramnauth, president of GuyAmerican, facilitated a massive mortgage fraud scheme that was conducted through a GuyAmerican branch office located in Jamaica, New York. Ramnauth permitted his state-approved mortgage brokerage license to be used by the loan officers of GuyAmerican to submit fraudulent applications for millions of dollars of loans. In return, Ramnauth received hundreds of thousands of dollars in commissions from the federally insured financial institutions that were deceived by the fraudulent scheme.
Ramnauth was one of 11 defendants charged in connection with the fraudulent scheme that was run through GuyAmerican. Four defendants, Peggy Persaud, Orette Killikelly, Taramatee Singh and Geoge Esso, were loan officers at GuyAmerican who collectively submitted dozens of loans containing false statements as to the borrowers’ employment, income, and assets, among other things. The loan officers also each received tens, and in some cases hundreds, of thousands of dollars in commissions based on the fraudulent loans.
Three other defendants charged in the scheme, Elton Lord, Rarfick Baksh and Mahamood Hussain, worked with GuyAmerican loan officers to recruit homeowners in financial distress who were willing to sell their homes. They used "straw buyers"—persons who posed as homebuyers in exchange for a fee, but who had no intention of living in the mortgaged properties—to perpetrate the scheme. The defendants arranged home sales between the distressed sellers and these straw buyers, and obtained mortgage loans using fraudulent representations. The defendants re-sold, or flipped, properties multiple times between different straw buyers, stripping the equity from these properties as they were resold with inflated market values.
Ramnauth entered into an arrangement with the loan officers submitting the fraudulent loans, such that they could continue to use his mortgage brokerage license provided the "real buyers" of the properties—Lord, Baksh and Hussain—held back six months of mortgage payments from the closings, thereby concealing the fraudulent scheme from the banks. Ramnauth also submitted his own fraudulent loans to banks, falsifying employment information on the loan applications, including for the purchase of a property by his wife.
For more information, visit http://newyork.fbi.gov.