Four in Washington Indicted in $8.6 Million Mortgage Fraud Scheme
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Four in Washington Indicted in $8.6 Million Mortgage Fraud Scheme

June 4, 2012

U.S. Attorney Jenny A. Durkan has announced that four Seattle, Wash.-area residents have been arrested on a 21-count indictment charging them with conspiracy, bank fraud, wire fraud, and mail fraud. The mortgage fraud scheme ran from 2006-2008 and defrauded more than 10 banks, financial institutions and mortgage lenders of more than $8.6 million. More than 50 mortgages were involved on properties in a variety of communities around Puget Sound including Medina, Renton, South Seattle, Bellevue, Redmond, and Kirkland. Jonathan Mendoza Martinez of Bellevue, Wash.; his sister, Jazmin Villalba Martinez of Seattle, Wash.; Celia Perez Morales of Kirkland, Wash.; and Jorge Castrejon Pichardo of Mountlake Terrace, Wash., made their initial appearances in U.S. District Court in Seattle.
According to the indictment, three of the defendants worked at Emerald City Escrow and at Nationwide Home Mortgage and conspired to use straw buyers to defraud banks. The fourth defendant worked at a tax preparation business and provided some of the false documentation submitted with the loan applications. The conspirators submitted false financial, employment and tax information to apply for residential mortgage loans. They falsely inflated the sale price of the properties. After the lenders funded the loans, the conspirators kept the excess proceeds, and the straw buyers quickly defaulted on the mortgages. The victim banks included Washington Mutual (now JPM Chase), Bank of America, American Sterling Bank, ING Bank, IndyMac Bank, and Merrill Lynch & Company Inc., among others. Documents in the scheme were submitted via mail and wire. In all, the defendants secured, or aided and abetted in securing, through unqualified buyers, at least 50 mortgage loans, representing approximately $22,396,660 in loan proceeds, based on false and fraudulent representations, resulting in a loss to financial institutions and mortgage lenders totaling approximately $8,672,330.
Each count in the indictment is punishable by up to 30 years in prison and a $1 million fine.

Compliance, Residential