Local Homes Part Of Massive Mortgage Scam
Three properties located in Far Rockaway were involved in a massive mortgage loan scam that has resulted in four people being indicted in federal court, The Wave learned this week.
Last month, the Acting United States Attorney for the Southern District of New York unsealed indictments against Sharmon Howell, aka Sharmon Wade; David Moore; June Persaud; and Oscar Ancrum, aka Red, aka Manny for their roles in a subprime mortgage scheme involving more than two dozen loans and $10 million.
According to the of the US Attorney for the Southern District of New York, the defendants recruited people from, among other places, halfway houses and public housing projects to purchase properties in and around New York City. The straw buyers, as these individuals were known, were told by the accused that they were assisting sellers who were trying to save their homes from foreclosure or they were buying the homes as an investment opportunity.
"The defendants typically obtained mortgages on behalf of the straw buyers for amounts greater than the actual sale price of the homes. To do so, the defendants obtained fraudulent appraisals for the homes and misrepresented to the lenders various material facts about the straw buyers' income, assets, and debts and intent to live in the properties they were purchasing."
The three Far Rockaway properties are all located on the 2900 block of Falcon Avenue.
The indictment charges that in November 2006, Howell and Moore submitted false residency, employment and financial information, among other things, to obtain a $650,000 home mortgage from Mortgage Lenders Network USA for 2957 Falcon Avenue. Once it was approved, the funds were "wired through a bank account in New York."
In January 2007, Howell, Moore and Persaud repeated the process to get a home mortgage from New Century Mortgage Corporation in the amount of $650,000 for 2961 Falcon Avenue. Those approved funds were also wired through a New York bank.
It is also charged that in December 2006, Howell and Moore defrauded a financial institution - Alliance Mortgage Banking Corporation - by knowingly giving false information to secure a $650,000 home mortgage for 2951 Falcon Avenue.
According to the indictment, several of the straw buyers were told the defendants would make payments for several months and then repurchase and or sell the properties.
Yet, some of the straw buyers have been left holding the bag. Jeffrey Huston, a sales associate at Century 21 Milestone Realty, has been working to help one such individual, Carmen Estremera, sell one of the Falcon Avenue homes purchased in her name by the defendants.
"We're trying to negotiate with the bank to take less on the mortgage," said Huston, who guessed the property was worth $450,000 in 2007.
Because of the condition of the home, Huston estimates it is now worth approximately $250,000.
"These scams have banks and appraisers overestimate the price," he explained. "They get the loan and put equity out immediately. It's ridiculous. It's worth way less than what is owed."
After obtaining the mortgages, the defendants split the difference between the actual price of the house and the inflated mortgages. The majority of the properties are now in default or foreclosure after the accused either failed to pay or stopped paying the mortgage on them.
The defendants are each charged with one count of conspiracy to commit bank fraud and wire fraud. Howell and Moore are charged with six counts of bank fraud and two counts of wire fraud; Persaud is charged with two counts of bank fraud and one count of wire fraud; and Ancrum is charged with two counts of bank fraud.
The conspiracy bank fraud charges carry a maximum sentence of thirty years in prison and a fine of the greater of $1 million, or twice the gross gain or loss resulting from the crime. Each wire fraud charge carries a maximum sentence of twenty years in prison and a fine of the greater of $250,000, or twice the gross gain or loss resulting from the crime. The indictment also seeks the forfeiture of the $10 million the defendants allegedly received in loans.