17 New Yorkers were charged in a massive mortgage scam with defrauding legitimate homeowners and various lending institutions out of more than $3 million in equity that had been stripped from 26 refinanced residential properties valued at $13 million. Many of the loans subsequently went into default, leaving lending institutions with insufficient collateral and substantial losses, or into foreclosure, leaving homeowners, in some cases, homeless.
The defendants are variously charged with first and second-degree grand larceny, first degree criminal possession of stolen property, first-degree money laundering, first-degree identity theft, second-degree forgery, second-degree criminal possession of a forged instrument, first-degree falsifying business records, first-degree offering a false instrument for filing, first-degree scheme to defraud and fourth-degree criminal facilitation. If convicted, the defendants face as much as 25 years in prison.
The investigations alleges that the two ringleaders of the mortgage fraud scheme were Roger Huggins and Inderpaul Sookraj who owned and operated a Richmond Hill, Queens, company that went by various names – Home Solutions Management, Home Solutions Enterprises and Home Solutions Limited – and held itself out to be a home foreclosure rescue company. It is further alleged that both Huggins and Sookraj also owned shell corporations which were created, in part, to launder the ill-gotten gains from the foreclosure rescue scam. Huggins was also allegedly employed as a loan officer with the defendant DMV Mortgage, a licensed mortgage brokerage firm owned by defendant Mangal Singh, who allegedly received a share of the profits of the alleged scheme from Huggins and Sookraj.
The investigation further allegedly revealed that Huggins and Sookraj targeted homeowners in Queens, Brooklyn and the Bronx, New York who had substantial equity in their residences but either faced foreclosure due to their inability to make monthly mortgage payments or were simply behind in their mortgage payments and looking to refinance or modify their loans with their lenders. It is alleged that Huggins and Sookraj offered to help the homeowners by instructing them to permit title to their homes be put in the name of a third-party purchaser (a “straw buyer”) for one year, during which time the two defendants promised to improve the homeowners’ credit rating, help them obtain more favorable mortgages on their homes and ultimately, return to them the title to their homes. What allegedly occurred at the closings, however, was that Huggins and Sookraj, in order to keep as much of the mortgage proceeds as possible, fabricated reasons why they needed to hold the homeowners’ funds in escrow, such as that the equity withdrawn from the properties would be used to pay the mortgages and expenses on the homes and to repair the homeowners’ credit.
In some cases, it is alleged, Huggins and Sookraj induced distressed homeowners to sell or transfer their properties directly to them for reduced prices. Huggins and Sookraj then allegedly resold or “flipped” the properties to straw buyers at inflated prices, usually within a short period of time. In some of these cases, the two defendants allegedly paid off the homeowners by using the home mortgage loan funds obtained from the lenders for the straw buyers. In those cases, the difference between the inflated home mortgage loan amounts and the reduced sale amounts represented, in part, the defendants’ profits from the scheme.
In another instance, it is alleged; Huggins and Sookraj drafted and filed fraudulent documents which purported that they had purchased a home from a homeowner who, in fact, had died a year prior to the closing. The defendants subsequently flipped the property to a straw buyer at an inflated price ($420,000), thus allowing them to keep and split the entire loan proceeds between themselves and their co-defendants as there was no actual seller of the property. To date, the property remains vacant and the loan has gone into default.
It is additionally charged that Huggins and Sookraj stole the property deeds of at least two homes outright by fraudulently creating documents, complete with such identifying information of the homeowners as their social security numbers, dates of birth and driver’s licenses, which purported that the homeowner had sold their homes to Huggins and Sookraj, who then turned around and sold the properties to straw buyers. The homeowners neither had any knowledge of the fraudulent transactions, nor did they realize that their home had been stolen. In both instances, the original homeowners allegedly had met Huggins when he offered to assist them with the “short sale” of their properties. In one case, the homeowner had gone to Huggins because he had lost his job and his wife was stricken with cancer.
In carrying out their scheme, it is alleged that Huggins and Sookraj paid various individuals to recruit homeowners to sell or refinance their properties or to act as straw buyers to carry out the fraudulent real estate deals by applying for loans. In most cases, it is alleged, the mortgage applications submitted to the lending institutions contained falsified income statements of the straw buyers. For example, it is alleged that straw buyer Aneesa Mohammed obtained two home mortgage loans in the aggregate amount of $410,000 from Fremont Investment and Loans to fund the purchase of a home. The submitted documents allegedly prepared by Huggins and Sookraj through DMV Mortgage contained numerous false representations, among which were that Mohammed falsely represented that she made more than $100,000 annually and had more than $30,000 in her bank account when, in fact, her true income was $12,800 and her bank account contained only $1,700.
In furtherance of the scheme, Huggins and Sookraj allegedly had two attorneys, Trevor Rupnerain and Shawn Chan, representing lending institutions, buyers or sellers at various Home Solution property closings. The two attorneys are alleged to have concealed the true nature of the transactions from their clients and distributed fraudulently obtained loan proceeds to themselves, as well as to other defendants and entities on behalf of Huggins and Sookraj. They are also charged with fraudulently preparing various financial and real estate documents.
Finally, it is alleged that Huggins and Sookraj would make several monthly mortgage payments together on properties used in the mortgage scheme in order to avoid early default and thus preventing lending institutions, who sold their mortgages into a secondary market, from identifying the true nature of the fraudulent scheme. This device further permitted the initial lender to sell the loans in the secondary market under contracts that gave no recourse after a minimal number of payments had been made.
Queens District Attorney Richard A. Brown, joined by New York State Banking Superintendent Richard H. Neiman and Acting New York State Police Superintendent John P. Melville made the announcement.
District Attorney Brown said, “In trying to hide their elaborate scheme from law enforcement and regulatory scrutiny, the two main defendants are alleged to have used unscrupulous attorneys and straw buyers and the fragmented structure of the real estate settlement process to funnel millions of dollars through various shell corporations that they either owned or which were controlled by other defendants. Money loss aside, the defendants are accused of creating a human tragedy of immense proportions for the homeowners who had turned to them in a desperate hope of saving their homes from foreclosure.”
State Banking Superintendent Neiman said, “The fact that these defendants took advantage of homeowners in distress, and in the guise of helping, actually stripped them of their equity and ownership, is compounded by the fact that some of these defendants were licensed professionals – attorneys, mortgage brokers and real estate advisors. Instead of acting as the gatekeepers whose function it is to protect the interests of vulnerable homeowners, they abused their positions in order to steal millions of dollars. I am proud of the outstanding work the Banking Department’s Criminal Investigation Bureau has performed throughout this investigation and thank the Queens District Attorney’s Office, the New York State Police and our other law enforcement partners that worked with us on this investigation.”
Acting State Police Superintendent Melville said, “These arrests are a direct result of the cooperative and interactive efforts of the many agencies involved in this investigation. Mortgage fraud continues to be one of the fastest growing segments of white collar crime. In this case alone, we bring to justice numerous individuals who defrauded banks, lenders, and homeowners of millions of dollars. These arrests send a clear message that this type of fraud will be investigated thoroughly and that perpetrators will be fully prosecuted.”
We should all congratulate following for the investigation conducted by Detective Jerome D. Pugh, of the District Attorney’s Detective Bureau, under the supervision of Sergeant John W. Kenna and Lieutenant Robert Burke, and under the overall supervision of Lawrence J. Festa, Chief Investigator and Albert D. Velardi, Deputy Chief Investigator, along with Financial Analyst Larry L. Schwartz, of the District Attorney’s Economic Crimes Bureau. New York State Banking Department Criminal Investigations Bureau Investigators David Nummey, Robert Tarwacki and Senior Bank Examiner Dwayne Walker also investigated the case, under the supervision of Ricardo Velez, Esq., Director of the Criminal Investigations Bureau, as did New York State Police Investigator Christopher Fox, under the supervision of QDA Squad Senior Investigator J.M. Cruz, Lieutenant John Ryan III and Captain William Baker, and under the overall supervision of Troop NYC Commander Michael Kopy.
District Attorney Brown thanked the Office of Fraud Detection and National Security Unit, New York City District within the U.S. Citizenship and Immigration Services, for its assistance and cooperation during the investigation. Assistant District Attorney Mariana Zelig, of the District Attorney’s Economic Crimes Bureau, is prosecuting the case under the supervision of Assistant District Attorneys Gregory C. Pavlides, Bureau Chief, and Christina Hanophy, Deputy Bureau Chief, and the overall supervision of Executive Assistant District Attorney of the Investigations Division Peter A. Crusco and Deputy Executive Assistant District Attorney for Investigations Linda M. Cantoni.
It should be noted that a criminal complaint is merely an accusation and that a defendant is presumed innocent until proven guilty.
We must be vigilant against fraud, recognizing its signs and taking proactive, definite, and realistic steps to not only prevent it but also punish it.
It starts with me.
It starts with you.
It starts with us…
You are all encouraged to report any suspected mortgage fraud activity to authorities.
Michael S. Richardson
Director/Mortgage Fraud Services
Author of “An American Epidemic, Mortgage Fraud a Serious Business”
Follow me on twitter: FocusonFraud