US Attorney Reports Lead Defendants Plead Guilty In Multi-Million Dollar Mortgage Fraud Scheme

LAWFUEL – Legal Newswire – R. Alexander Acosta, United States Attorney for the Southern District of Florida, Michael K. Fithen, Special Agent in Charge, United States Secret Service, Michael V. Powell, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General, Region IV, Henry Gutierrez, Inspector in Charge, U.S. Postal Inspection Service, and Roger Reinke, Chief, City of Marco Island Police Department, announced that defendants Juan and Rachael Torrens pled guilty to conspiracy charges in connection with their participation in a recent multi-million dollar mortgage fraud scheme in South Florida. The defendants acknowledged as part of their guilty plea that their scheme produced over $15,000,000 in fraudulent loans, and resulted in losses of over $5,000,000 to various lenders.

With today’s guilty pleas by Juan and Rachael Torrens, 15 of the original 31 defendants charged have pled guilty.

Defendants Juan Torrens, the de facto owner of Amsouth Trust & Investment Corp. (“Amsouth”) and president of Countryside Land & Development, Inc., Rachael Torrens, president of 1st Choice Realty of South Florida, Inc. and de facto owner of First United Mortgage USA Corp., Daniel Ramos, Alfonso A. Muxo, a State of Florida certified real estate appraiser and owner of Palm Bay Real Estate Appraisals, Inc., and Katherine Harris, former president and part owner of Floridian Home Title Corporation, were charged with conspiracy to commit wire fraud and/or wire fraud for their participation in this massive mortgage fraud scheme. The scheme involved fraudulent mortgage loans obtained for the purchase of 28 properties located in Miami-Dade and Broward Counties, and in the City of Marco Island. All except Katherine Harris have already pled guilty, and are awaiting sentence.

The Indictment also charges defendants Mario E. Diaz, Aurelio Pozo, Oscar Barreiro, Lellany Rordriguez, Jose Asensi, Carlos Morales, Damaris Jimenez, Lizabeth Perez, Mario Blanco, Rene Rodriguez, Tamaris Angulo, Alicia Loaiza, Ester Crespo, Jesus Enrique Guevara, Janette Lugo, Priscilla Fleitas, Erick Clavijo, Luis DeJesus Planas, Moises Llorens, Milva Roque, Aurora Ramentol, Gladys Lens, Nancy Fundora, Yanny Cruz Pavon, Roger Rosario and Jacqueline Perez-Castillo (“the straw buyer defendants”) with wire fraud for their participation in this mortgage fraud scheme. To date, guilty pleas have been entered by defendants Aurelio Pozo, Oscar Barreiro, Carlos Morales, Damaris Jimenez, Mario Blanco, Jesus Enrique Guevara, Janette Lugo, Priscilla Fleitas, Moises Llorens, Gladys Lens, and Roger Rosario.

According to the Indictment, Juan Torrens would identify sellers of residential properties who were willing to overstate the true selling price of their properties. Daniel Ramos and Juan Torrens would then recruit and pay the straw buyer defendants to pose as buyers and ostensibly participate in the purchase of the selected properties. Defendants Rachael Torrens and Juan Torrens would prepare fraudulent mortgage loan applications for the straw purchasers that included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2.

Thereafter, to support the overstated sales prices on the properties and the fraudulent mortgage applications, defendant Alonso A. Muxo would prepare fraudulent appraisals attesting to the inflated property values dictated by Juan Torrens. Roger Rosario, an employee of Regions Bank, assisted the fraud by providing, on at least one occasion, a fraudulent verification of deposit in connection with a mortgage loan application for one of the straw buyer defendants.

To effectuate the scheme, defendants Juan Torrens and Rachael Torrens, together with the straw buyer defendants, would create and submit to the banks and lending institutions HUD-Settlement Statement Forms, also known as HUD-1s, which falsely stated that the straw buyers brought their own funds to the closings. Once the mortgage applications were approved, the lenders would wire the loan proceeds to the title company, Floridian Home Title, for closing.

At closing, Amsouth, a company owned and controlled by Juan Torrens, would receive a credit for the difference between the inflated price and the actual selling price of the property. Defendants Juan and Rachael Torrens would make the payments on the mortgage loans to maintain the loans afloat until the properties could be resold again, often to another straw buyer. When the Torrenses failed to make payments on the loans, some properties went into foreclosure, resulting in substantial losses to the lending institutions.

Mr. Acosta commended the investigative efforts of the U.S. Secret Service, the U.S. Department of Housing and Urban Development – Office of Inspector General, U.S. Postal Inspection Service, and the City of Marco Island Police Department.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

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