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Seven charged in $49.6 million mortgage fraud scheme

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United States Attorney Wifredo A. Ferrer announced Monday the unsealing of a 15-count indictment charging seven South Florida residents in a mortgage fraud scheme that resulted in the approval of approximately $49.6 million in fraudulent loans, according to the Department of Justice.

Ferrer, the U.S. Attorney for the Southern District of Florida, was accompanied at a press conference by Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Fred W. Gibson, Jr., Acting Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDI-OIG).

Among those charged were Domenico “Dom” Rabuffo, 77, of Miami; Mae Rabuffo, 74, of Fort Lauderdale; Diane M. Hayduk, 64, of Miami; Raymond E. Olivier, 52, of Land O’ Lakes; Curtis Allen Davis, 51, of Tampa; Victor Miguel Vidal, 48, of Miami; and Lazaro Jesus Perez, 43, of Miami Lakes.

The alleged scam artists conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders from 2003 to 2008. Millions in losses to the lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank, resulted from the alleged scam.

The properties referred to in the indictment consist of multiple vacant lots in a community development in North Carolina.

Domenico Rabuffo and Mae Rabuffo allegedly used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina.

According to the indictment, Domenico Rabuffo, Mae Rabuffo, Diane M. Hayduk, Raymond E. Olivier, and Curtis Allen Davis recruited numerous straw buyers to purchase lots in the Hampton Springs development. The straw buyers allegedly financed the purchase of the building lots in Hampton Springs using mortgage loans and further obtained construction loans for the same properties.

Collectively, the defendants caused straw buyers to submit false and fraudulent loan applications and related documents to the lenders to ensure that the straw buyers qualified for the loans. Victor Miguel Vidal served as a loan officer at SunTrust Mortgage, where he shepherded the fraudulent loan applications of the straw buyers through the approval process, including fraudulent applications for $33 million in construction loans.

Lazaro Jesus Perez furnished fictitious and fraudulent accountant’s letters to Vidal in support of various fraudulent mortgage loan applications submitted to SunTrust Mortgage.

Based on the indictment, the lenders were induced to advance approximately $49.6 million in loan proceeds in connection with this scheme. The proceeds of the defendants’ mortgage fraud scheme were funneled through shell-corporation accounts controlled by Domenico Rabuffo and Mae Rabuffo, for the use and benefit of the defendants and their co-conspirators and to further their fraudulent scheme.

The indictment includes charges of conspiracy to commit bank fraud and wire fraud affecting a financial institution and substantive bank fraud offenses. The offenses charged in the indictment each carry a statutory maximum sentence of 30 years in prison, a $1 million fine, and mandatory restitution.

An indictment is only an accusation and the defendants - until proven guilty - are presumed innocent.

__________________

Bill Lewis is principal of William E. Lewis Jr. & Associates, a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity.

For daily updates on The Credit Report with Bill Lewis, you can join Bill’s 11,500 plus fans on Facebook at: http://www.facebook.com/thecreditreportwithbilllewis.

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