Guyanese David Ramnauth, the former head of a Queens, New York mortgage firm was on Tuesday sentenced to 30 months in prison for his role in a massive mortgage fraud scheme in which over US$23M in fake loans were processed in relation to 44 properties.
A release from the office of Preet Bharara, the US attorney for the Southern District of New York made the disclosure. Ramnauth had pleaded guilty to his role in the mortgage fraud scheme in August 2010.
Said Bharara: “As the president of a mortgage brokerage that was little more than a fraud mill, David Ramnauth abdicated his professional responsibility just to make a quick buck. Today’s sentence makes clear that corrupt gatekeepers like Ramnauth who perpetrated these schemes will be punished for their crimes. Along with our law enforcement partners, we will continue to investigate and punish those who perpetrate and profit from mortgage fraud.”
According to the indictment and other documents previously filed in Manhattan federal court and statements made in court, Ramnauth, the President of GuyAmerican, facilitated a massive mortgage fraud scheme via a GuyAmerican branch office in Jamaica, New York.
Court documents said he allowed his state-approved mortgage brokerage licence to be used by the loan officers of GuyAmerican to tender fake applications for millions of loans. Ramnauth in return received hundreds of thousands in commissions from the federally insured financial institutions that were deceived by the scheme.
Ramnauth was one of eleven defendants charged in connection with the fraudulent scheme that was run through GuyAmerican. Four defendants, Peggy Persaud, Orette Killikelly, Taramatee Singh and George Esso were loan officers at GuyAmerican who together submitted dozens of loans containing false statements in relation to the borrowers’ employment, income, and assets, among other things. The loan officers also each received tens, and in some cases hundreds, of thousands of dollars in commissions based on the fraudulent loans.
Three others charged in the scheme, Elton Lord, Rafick Baksh and Mahamood Hussain worked with GuyAmerican loan officers to enlist homeowners in financial distress who were willing to sell their homes. They then used “straw buyers” – persons who posed as home buyers in exchange for a fee, but who had no intention of living in the mortgaged properties—to perpetrate the scheme. The defendants arranged home sales between the distressed sellers and these straw buyers, and obtained mortgage loans using fraudulent representations. The defendants re-sold, or flipped, properties multiple times between different straw buyers, stripping the equity from these properties as they were resold with inflated market values.
Bharara’s office said that Ramnauth entered into an arrangement with the loan officers submitting the fraudulent loans, so that they could continue to use his mortgage brokerage licence as long as the “real buyers” of the properties—Lord, Baksh and Hussain—held back six months of mortgage payments from the closings, thereby concealing the fraudulent scheme from the banks. Ramnauth also tendered his own fraudulent loans to banks, falsifying employment information on the loan applications, including for the purchase of a property by his wife.
Ramnauth, 55, of Levittown, New York, previously pleaded guilty to one count of conspiring to commit bank and wire fraud. In addition to the prison term, U.S. District Judge Shira A. Scheindlin also sentenced him to a term of three years of supervised release.
Lord, who pleaded guilty on August 4, 2010, was sentenced on January 13, 2011, to 46 months in prison. Esso, who was found guilty after a two-week trial on August 26, 2010, was sentenced on February 4, 2011, to one year and one day in prison and three years of supervised release.
Peggy Persaud, Killikelly, Taramatee Singh, Cheddi Goberdhan and Rajnarine Singh previously pleaded guilty but have not yet been sentenced. Ravi Persaud was found guilty after trial and is awaiting sentence.
Bharara praised the work of the FBI and thanked them for their assistance in the case.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group.
