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Colorado Man Sentenced to Prison in $1.7 Million Lender Scheme

NationalMortgageProfessional.com
Feb 06, 2013

Steven J. Mascarenas of Westminster, Colo., has been sentenced by U.S. District Court Judge Robert E. Blackburn to serve 72 months in federal prison for wire fraud, making a false statement to a pretrial services officer, and escape, U.S. Attorney John Walsh, Denver FBI Special Agent in Charge James Yacone, and IRS-Criminal Investigation Special Agent in Charge Stephen Boyd announced. Mascarenas was ordered to spend three years on supervised release after he serves his term of imprisonment. Judge Blackburn also ordered Mascarenas to pay restitution totaling $1,776,152.21. Mascarenas will surrender to the Bureau of Prisons once a facility is designated. Mascarenas was indicted on April 22, 2010, along with co-defendants Kathy Mascarenas (wife of Steven) and Katrina Roberts. He pled guilty on July 3, 2012, before Judge Blackburn. Katrina Roberts pled guilty and was sentenced to 20 months in prison on July 27, 2012. Kathy Mascarenas pled guilty and was sentenced to 24 months in prison on November 6, 2012. According to court documents, in 2004, Defendant Steven J. Mascarenas, then an attorney and licensed real estate broker, orchestrated the purchase and resale of residential properties in The Broadlands, a subdivision in Broomfield, Colo. He arranged to have individuals serve as “credit buyers” to obtain loans, purchase the properties, and resell them shortly thereafter at inflated prices to other “credit buyers” in his select group. He concealed from the lenders that these “credit buyers” were only acting at his direction and were being compensated after the closings for their participation in having obtained the loans and purchased the properties. Mascarenas had Roberts prepare appraisal reports in which she fraudulently inflated the fair market values of the properties by $100,000 to $325,000. To make the inflated values in all her reports appear legitimate, she falsely represented that the purchases, which were actually sales at market value, were “distressed” sales, or “quick” sales below market value. Then, based on the fraudulent appraisals, Steven Mascarenas set the prices for the resales far beyond their true market values and arranged for the buyers to obtain 100 percent financing for them. To ensure that the desired funding would be approved for the buyers for both the purchases and the resales, Steven Mascarenas caused false information about their qualifications to be incorporated into their loan applications to enable them to qualify for the loans. He caused the proceeds from the second sales to be directed to entities of his choice. Kathy Mascarenas conducted financial transactions as necessary to facilitate, perpetuate, and conceal the fraud. All of the loans went into default, and the loss to the lenders was approximately $1,776,162.21. While out on bond in the fall of 2011, Mascarenas repeatedly lied to his supervising pretrial services officer, telling him that he was employed making sandwiches at a local Quizno’s restaurant. In fact, he was managing the store under the assumed name of “Steven Jay,” in violation of the conditions of his bond. In June 2011, as a condition of Steven’s bond, he was required to reside in a halfway house, and he was not permitted to leave the facility without permission. Hours before he was to be taken to a prison facility, he fled. An arrest warrant was issued, and on December 4, 2011, Steven was arrested by the Lakewood Police Department at a motel in Lakewood, Colorado. “Mortgage fraud harms everyone involved in buying a home—buyers, appraisers, real estate agents, and bankers,” said U.S. Attorney John Walsh. “Lying on mortgage applications is a fraud and a federal criminal felony. As the financial crisis of 2007 and 2008 showed us, following the rules in real estate transactions matters—and those who don’t face time in federal prison.”
Published
Feb 06, 2013
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