LAWFUEL – The Legal Newswire – MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, MARK J. MERSHON, Assistant
Director-in-Charge of the New York Office of the Federal Bureau
of Investigation (“FBI”), PETER J. SMITH, the Special
Agent-in-Charge of the New York Office of the Department of
Homeland Security’s U.S. Immigration and Customs Enforcement
(“ICE”), and RAYMOND W. KELLY, Police Commissioner of the City of
New York (“NYPD”), announced today the unsealing of a superseding
Indictment charging 26 individuals with participating in a
wide-ranging scheme to commit mortgage fraud. According to the
superseding Indictment filed in Manhattan federal court:
The defendants committed the fraud by submitting loan
applications and supporting documents, which contained false
information and material omissions, to sub-prime lenders in order
to induce the lenders to make loans that otherwise would not have
been funded.
The superseding Indictment added over two dozen new
counts charging some of the defendants with committing mortgage
fraud in the purchase of a block of ten rent-regulated
condominium apartments at 243 West 98th Street, on the Upper West
Side of Manhattan. Specifically, the Indictment alleges that
certain defendants obtained millions of dollars in loan proceeds
from sub-prime lenders by submitting fraudulent loan documents
containing false information and material omissions regarding the
fact that the apartments were subject to New York’s rent
regulation laws, the borrower’s intent to live in the apartment
as a primary residence, the borrower’s employment and income, and
the fair market value of the apartments, among other things.
Three additional defendants are also named in the
Indictment, including GALINA ZHIGUN, the owner of the mortgage
brokerage AGA Capital NY, Inc. (“AGA Capital”), in Brooklyn, New
York, where many of the co-defendants worked as mortgage brokers
and/or loan processors.
From 2004 through December 2006, AGA
Capital, and its successor, Lending Universe Corporation, and
another related brokerage, Northside Capital, brokered over one
thousand home mortgages and home equity loans — with various
sub-prime banks and lending institutions — with a total face
value of at least $200 million dollars. AGA Capital, Lending
Universe and Northside Capital earned a total of at least $4
million in commissions and fees on the loans. The sub-prime
lenders that issued the mortgages and loans brokered by Northside
Capital, AGA Capital and Lending Universe have suffered actual
losses of at least $4.5 million as a result of the defendants’
scheme to defraud.
If convicted, each defendant faces a maximum sentence
of thirty years in jail on each count of the Indictment, and a
fine of the greater of $250,000, or twice the gross gain or loss
resulting from the crime.
The charges were investigated by a joint task force
composed of the FBI, NYPD, and ICE.
Mr. GARCIA praised the efforts of the investigating
agents.
Assistant United States Attorneys JONATHAN B. NEW,
KATHERINE R. GOLDSTEIN, and CHRISTINE MEDING are in charge of the
prosecution.
The charges contained in the Indictment are merely
accusations, and the defendants are presumed innocent unless and
until proven guilty.
