Equity Skimming is a type of mortgage fraud that consists of the practice of swindling homeowners out of their equity. A person accused of equity skimming might be thought of targeting homeowners who are rapidly approaching foreclosure and have equity on their property, by offering this homeowner a mortgage they can’t really afford in exchange for the transfer of title on the deed of the property.

Equity skimming on mortgages insured by the Federal Housing Administration is a federal crime and can be subjected to investigation by the Financial Crimes Unit of the Federal Bureau of Investigations (FBI). FBI investigations usually begin by collecting information on mortgage fraud through the Office of Inspector General, Department of Housing and Urban Development for suspicious activity reports filed by banks, saving and loan associations, and credit unions.

FBI investigations and aggressive federal criminal prosecution of mortgage fraud are currently on the rise as a result of our country’s current financial crisis.

If you are currently facing allegations of Equity Skimming and/or are being subjected to investigation of Mortgage Fraud in New York, call our office at (212) 577-6677 to get professional legal assistance.

Aaron Hand, Kenneth Law and Jerry Strklia, three main conspirators of a $100 million mortgage fraud in New York City, were found guilty of multiple felonies such as Enterprise Corruption, Scheme to Defraud, Conspiracy, and Grand Larceny by the jury.

Hand, Law and Strklia allegedly operated a corrupt loan origination company called AFG Financial Group. Inc. which included 27 professional co-conspirators and straw buyers. Banks and lenders such as Wells Fargo and Countrywide Financial were allegedly defrauded millions of dollars by granting inflated mortgages to unknown straw buyers purchasing distressed residential properties in New York City. After the money is received from the bank, the straw buyers would leave behind the overvalued property and fictitious mortgage papers.

Following their guilty convictions, Hand, Law and Strklia, face up to 25 years in prison.

17 individuals have been variously charged with 1^st and 2^nd degree grand larceny, 1^st degree criminal possession of stolen property, 1^st degree money laundering, 1^st degree identity theft, 2^nd degree forgery, 1^st and 2^nd degree criminal possession of a forged instrument, 1^st degree falsifying business records,  1^st degree offering a false instrument for filing, 1^st degree scheme to defraud and 4^th degree criminal facilitation for allegedly defrauding homeowners and lending institutions of more than $ 13 million of equity and residential property in Queens, New York.

Of the 17 defendants, the two ringleaders of the mortgage fraud scheme were identified as Roger Huggins and Inderpaul Sookraj, who purportedly hatched and operated a fraudulent home foreclosure rescue company in Queens, New York through shell companies.

Huggins and Sookraj allegedly employed licensed professionals such as loan officers, mortgage brokers, and attorneys to launch their scam and share their profits.

The 2 ringleaders apparently advised homeowners facing foreclosure to sign over or sell their homes to straw buyers for one year in order to improve their credit rating which will help them receive better mortgages and obtain their home title back. However, the defendant allegedly held and used homeowner funds for personal expenses.

The defendants also allegedly misrepresented to homeowners to sell their home to the straw buyers and then flipped the property and sold to other straw buyers at inflated prices to which lending companies paid for.

If convicted, the defendants can each face a maximum penalty of 25 years in prison.

Ralph Recorale, a New York licensed attorney, Thomas Debonis Leonard, Sudler, Richard Sudler, Marco Ramos, mortgage brokers,  and Sophia Welsh and Yves Mathieu, recruited straw buyers, were charged for operating a $2 million mortgage fraud and identity theft ring.

Mortgage Fraud Plan

In 2005, the defendants purchased a vacant building in Brooklyn, New York through a straw buyer using purported information. However in 2006, the defendants sold the building to a different straw buyer for the full sale price.

By 2007, the defendants stopped paying for the mortgages and arranged for the building to be foreclosed. On February 2008, the defendants yet again sold the property to another straw buyer who obtained a $675,000 mortgage using a stolen identity.

In 2009, the defendants were negotiating with the banks to scheme another fraudulent sale until the identity theft victim contacted the Brooklyn District Attorney’s Action Center, to notify them of their situation.

The seven defendants now face a maximum penalty of 15 years of imprisonment if convicted of charges of Grand Larceny in the Second Degree and Conspiracy in the Fourth Degree.

On March 9, 2010, Roger Arias and his mother Martina Duran, owners of the nightclub Club Kalua, were indicted with 327 counts of identity theft and mortgage fraud for deceptively buying and selling three properties in Queens, New York City.

From July 2006, Arias and Duran allegedly gave two of his clients’ personal information when acting as a real estate broker to imposters-buyers who act on their behalf.  These imposter-buyers would buy and sell properties in Queens when the original persons were not even residing in the United States anymore.

After an investigation by the NYPD’s Financial Crime Task Force, and the Economic Crimes Bureau a total of $2 million were reveled to have been purported by Arias and Duran’s mortgage scheme.

Arias and Duran were both charged with 2^nd degree forgery, 2^nd degree criminal possession of a forged instrument, 1^st degree falsifying business records, and 4^th degree criminal facilitation, punishable of up to 15 years of imprisonment.

A New York City businessman Shih Siang Shawn Liao was sentenced in Queens Supreme Court to three to nine years in prison for some engaging in some creative real estate deals. According to court papers, Liao forged documents to fraudulently obtain mortgage on his mother in law’s Queens condo and then stole over $300,000 by using up the proceeds he received from the bank loan.

In this mortgage fraud case, Liao pleaded guilty on December 16, 2008, to second-degree grand larceny and was sentenced to prison this week. Liao also signed a confession of judgment in which he admits that he owes $444,892 to Chase Home Finance and his mother-in-law. A confession of judgment in criminal law context is a document that allows victims to enter judgment against the defendant without having to sue in civil courts.