Several Guyanese, including two lawyers, were yesterday slapped with criminal charges in New York over an elaborate mortgage fraud in which more than US$3 million in equity was stripped from 26 refinanced residential properties valued at US$13 million, a release from the office of the Queens County District Attorney said.
Many of the loans, created by the 17 persons charged, subsequently went into default and left the lending institutions with insufficient collateral and substantial losses; or into foreclosure, leaving homeowners, in some cases homeless.
The release said while 12 of the defendants have been arrested, five others are being sought by the authorities.
The fraud, which was uncovered following the teaming up of several organisations that launched the investigation, was allegedly masterminded by 34-year-old Roger Huggins and 44-year-old Inderpaul Sookraj who owned a company that had many names, according to District Attorney Richard Brown.
The defendants face charges of 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.
According to District Attorney Brown, the investigation revealed that Huggins and Sookraj, the two ringleaders of the mortgage fraud scheme, owned and operated a Richmond Hill, Queens, company that went by various names – Home Solutions Management, Home Solutions Enterprises and Home Solutions Limited – which 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 DMV Mortgage, a licensed mortgage brokerage firm owned by another defendant, Mangal Singh, who allegedly received a share of the profits of the alleged scheme from the two.
It is also alleged that the two targeted homeowners in Queens, Brooklyn and the Bronx who had substantial equity in their residences but either faced foreclosure because of 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.
The two defendants offered to help the homeowners by instructing them to permit the titles to their homes be put in the name of a third-party purchaser (a “straw buyer”) for one year, during which time they promised to improve the homeowners’ credit rating, help them obtain more favourable mortgages on their homes and ultimately, return to them the title to their homes.
Instead what they actually did at the closings, in order to keep as much of the mortgage proceeds as possible, was to fabricate 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.
They then allegedly resold or “flipped” the properties to straw buyers at inflated prices, usually within a short period of time. In other instances, the two allegedly paid off the homeowners by using the home mortgage loan funds obtained from the lenders for the straw buyers.
In one instance, it is alleged that 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 (US$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 Jamaica, Queens, property remains vacant and the loan has gone into default.
More allegations stated that the two ringleaders 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 licences – which purported that the homeowner had sold their homes to them.
They 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 homes 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,” the release said.
To facilitate their scheme, the two 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, another accused, obtained two home mortgage loans in the aggregate amount of US$410,000 from a loan company to fund the purchase of a home.
The submitted documents al- legedly prepared by Huggins and Sookraj through DMV Mortgage contained numerous false representations, among which were that Mohammed made more than US$100,000 annually and had more than US$30,000 in her bank account. In fact, her true income was US$12,800 and her bank account contained only US$1,700.
In furtherance of the scheme, Huggins and Sookraj allegedly had two attorneys – Trevor Rupnarain and Shawn Chand both of whom have been charged – 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.
The other defendants are: Anand Bharat, Prahalad Mahadeo, Ariel Huggins, Mohammad Abdallah, Michael Abdul, Faiz Ali, Jagdesh Kuldip, Purnima Mahammed, Krishna Ramroop, Vadianuth Sanichar and David Sookdeo.
