Last December, five people were indicted and charged in a conspiracy to commit bank fraud, wire fraud and mail fraud. The charges were linked to a mortgage debt-elimination scheme that, ultimately, defrauded homeowners and banks.
According to a report in the Miami Herald, Bruce Lewis, 65, Anthony Vigna, 59, Jacqueline Graham, 47, Paula Guadagno, 58 and Rocco Cermele, 54, conspired through their Pillow Foundation and Terra Foundation (Terra) between 2011 and 2012 to carry out their fraudulent activities: Their fee-based operation solicited homeowners who were struggling to make mortgage payments.
Clients were told that their monthly fees to the Terra Foundation covered items such conducting a client’s property audits, which “they often failed to perform.
Terra clients were often coaxed into taking out a second or reverse mortgage on their properties with the assumption they had already been “discharged of their first mortgages.” A number of these mortgage fraud transactions were taken out through the HUD Home Equity Conversion Mortgage Program; the defendants were able to claim “substantial portions of the proceeds.”
Moreover, the clients were often paying not only both their second or reverse mortgage, but also on their property’s original mortgage. The charges claim that around 60 fraudulent deals totalling over $33 million were made in Westchester and Putnam Counties in New York and Connecticut.
Preet Bharara, the Manhattan U.S. Attorney noted…
“...(they) preyed on vulnerable homeowners struggling with their mortgage payments and, with their greed, victimized them further...these homeowners were left much worse off, in even greater debt.”
If convicted, the five defendants face a “maximum penalty of 30 years in prison,” plus a fine of $1 million.
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