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• a mechanism to require the mortgage industry to report fraudulent activity, and

• the creation of “ Safe Harbor” provisions to protect the mortgage industry under a mandatory reporting mechanism.

http://www.fbi.gov/publications/financial/fcs_report2007/financial_crime_2007.htm#mortgage

http://www.fbi.gov/publications/fraud/mortgage_fraud08.htm#9

http://www.mortgagefraud.org/storage/fraudupdate0109.pdf

Straw Purchaser Sentenced to 2 Years in Prison:

Sabrina Weinberg, 44, Bethesda, Maryland, was sentenced by U.S. District Judge J. Frederick Motz to two years in prison followed by three years of supervised release for mail fraud arising from a multi-million dollar mail fraud scheme to purchase numerous properties in Maryland, Virginia and Washington, DC, using fraudulent mortgage and loan applications. Judge Motz also entered a restitution order against Weinberg for $2,551,698.

According to Weinberg's plea agreement and other court documents, Osman Al-Bari, along with his sister Jamilah Al-Bari, Terrence White, Timothy Reed, Kara McIntosh and others, paid straw purchasers, including Sabrina Weinberg, $10,000 per property to purchase houses for them. Weinberg was also told that she would receive an additional $10,000 per property once the property was sold. From February 2006 to October 2006, Weinberg purchased seven properties with mortgages totaling $4,692,836. Kara McIntosh acted as the mortgage broker and created loan applications for those purchases which misrepresented Weinberg's income and assets. For example, on several mortgage documents, Weinberg's income was stated to be over $15,500 per month when Weinberg, McIntosh, Reed, and others knew that she did not have such income. Al-Bari and others had the straw buyers claim large account balances at banks and had Jamilah Al-Bari, who worked at one of the banks, send "verification letters" falsely confirming that the straw buyers had such assets.

Al-Bari, White and Reed also created false invoices to claim that their company, Brotherly Investment Group, performed "renovations" on some of the properties, including the Weinberg properties. Using these false invoices, the co-conspirators were "repaid" at closing for the purported renovations, even though all participants in this scheme knew that no such renovations were done.

The conspirators repeated this fraud scheme with over 15 straw buyers and approximately 25 properties in Maryland, the District of Columbia and Virginia. From 2006 to 2008, Al-Bari, White, Reed and others received approximately $3,830,418 in fraudulent funds. Many of the purchased properties have been foreclosed upon. Weinberg was held accountable at sentencing for up to $2.5 million in losses from the scheme.

Jamilah Al-Bari, 37, District Heights, Maryland; Timothy Reed, 44, Beltsville; Terrence White, 36, Oxon Hill; and Kara McIntosh, 47, Bethesda, have all pleaded guilty to mail fraud in connection with their participation in this scheme and are scheduled to be sentenced in the next two months. Osman Sharrieff Al-Bari, 35, Washington, D.C., was sentenced on October 5, 2009, to 78 months in prison.

United States Attorney for the District of Maryland Rod J. Rosenstein announced the sentencing.

United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service, the Federal Bureau of Investigation, the Montgomery County State's Attorney's Office - Economic Crimes Unit and the U.S. Secret Service for their investigative work and assistance. Mr. Rosenstein commended Assistant United States Attorney Kwame J. Manley, who prosecuted the case.

Woman Faces Fraud Charges For False Statements:

Stephanie Meyer, 38, Simpsonville, South Carolina, was charged in a three-count Indictment with making false statements to financial institutions, in violation of Title 18, United States Code, Section 1014. Meyer pled guilty in federal court last February 2009, to defrauding two banks by creating phantom balances with bogus checks. While on bond for that case, investigators allege that she submitted false documents to other banks in an effort to obtain money.

The maximum penalty Meyer could receive is a fine of $1,000,000.00 and imprisonment for thirty years. United States Attorney W. Walter Wilkins announced the charges. The case was investigated by agents of the Federal Bureau of Investigation. The case has been assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.

The United States Attorney stated that all charges in this Indictment are merely accusations and that the defendant is presumed innocent until and unless proven guilty.

Man Sentenced for Falsifying Mortgage Loan Application and Possession of Firearms:

Milton H. Ohlsen III, St. Louis, Missouri, was sentenced to 30 months in prison on bank fraud charges after overstating his income on his home mortgage application, and in a separate case, sentenced to 30 months in prison on a firearms charge. The sentences are to run concurrently. In addition to the prison sentence, Ohlsen was ordered to pay restitution of $99,871.

According to the Indictment, in 2000, Milton Ohlsen originally financed his North Ballas Road residence with two loans totaling $302,000. In 2002, Ohlsen refinanced with Merrill Lynch Corporation for $307,000, and in 2006 obtained another loan from Merrill Lynch for $150,000 for the same home. In 2007, Ohlsen again refinanced the home with two loans, one for $470,000 from Countrywide, and $175,000 from Guaranty Bank, which paid off the previous Merrill Lynch loans. On both of the June 2007 loans Ohlsen falsified the loan applications to Countrywide and Guaranty Bank, stating that his monthly income was $15,000, when in fact it was substantially less. In August 2007, Countrywide assumed the total line of credit from Guaranty Bank. Shortly after, Ohlsen became delinquent in his monthly payments on the original Countrywide and Guaranty loans. In May 2008 Ohlsen was in default on these loans, and in June 2008, he filed bankruptcy.

Ohlsen III pleaded guilty May 2009 to one felony count of bank fraud, one felony count of being a previously convicted felon in possession of firearms and bullets. He appeared for sentencing before United States District Judge Henry Autrey.

Acting United States Attorney Michael W. Reap announced the sentencing and commended the work performed on the case by the St. Louis County, Town and Country and Ladue Police Departments, the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

DC Man Sentenced to 6.5 Years for Straw Buyer Scheme:

Osman Sharrieff Al-Bari, 35, Washington, D.C., was sentenced by U.S. District Judge J. Frederick Motz to 78 months in prison followed by five years of supervised release for mail fraud arising from the fraudulent purchase of 25 properties in Maryland, the District of Columbia and Virginia.

According to his plea agreement, Al-Bari was a leader in the scheme in which he, along with his sister Jamilah Al-Bari, Terrence White, Timothy Reed and others, paid straw purchasers $10,000 per property to purchase houses for them. Many of the loan applications for the straw buyers misrepresented the buyers' income and assets. Al-Bari and others had the straw buyers claim large account balances at banks and had Jamilah Al-Bari, who worked at one of the banks, send "verification letters" falsely confirming that the straw buyers had such assets.

Al-Bari, White and Reed also created false invoices to claim that their company, Brotherly Investment Group, performed "renovations" on some of the properties. Using these false invoices, Al-Bari and his co-conspirators were "repaid" at closing for the purported renovations.

Al-Bari and others repeated this fraud scheme with over 15 straw buyers and approximately 25 properties in Maryland, the District of Columbia and Virginia. From 2006 to 2008, Al-Bari, White, Reed and others received approximately $3,830,418 in fraudulent funds. Many of the purchased properties have been foreclosed upon. Al-Bari is responsible for $2.5 million in losses from the scheme.

Jamilah Al-Bari, 37, District Heights, Maryland; Timothy Reed, 44, Beltsville; Terrence White, 36, Oxon Hill; Sabrina Weinberg, 44 and Kara McIntosh, 47, both of Bethesda, have all pleaded guilty to mail fraud in connection with their participation in this scheme and are scheduled to be sentenced in the next two months.

United States Attorney for the District of Maryland Rod J. Rosenstein announced the sentencing.

United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service, the Federal Bureau of Investigation, the Montgomery County State's Attorney's Office - Economic Crimes Unit and the U.S. Secret Service for their investigative work and assistance. Mr. Rosenstein commended Assistant United States Attorney Kwame J. Manley, who prosecuted the case.

Ex Police Commissioner Charged for Mortgage Fraud:

Bernard B. Kerik, the former New York City Police Commissioner and Commissioner of the New York City Department of Corrections, has been indicted by a federal grand jury sitting in White Plains on conspiracy, tax fraud, and false statements charges.

According to the Indictment, Kerik is charged with making false statements on a loan application in connection with purchase of s Riverdale, New York, apartment. Specifically, it charges that Kerik borrowed part of the down payment from a Manhattan realtor, but falsely denied that he had done so to the bank that extended him the mortgage loan for his purchase of the apartment.

Kerik conspired with others to deprive the City of New York and its citizens of his honest services by: 1) receiving benefits -- namely, approximately $255,000 in renovations to Kerik's Riverdale, New York, apartment ("the Riverdale Apartment") -- from a company seeking to do business with the City; 2) concealing those benefits by, among other ways, failing to disclose them as required on financial disclosure reports Kerik filed with the City; and 3) taking steps to convince City regulators that the contractors were free of mob ties and should be approved to do business requiring City permits.

Kerik's receipt of the benefits and his actions on behalf of the company occurred while Kerik was the Commissioner of the New York City Department of Corrections, and his acts of concealment occurred while he held that post and while he held the post of New York City Police Commissioner. The Indictment also charges Kerik with impeding the Internal Revenue Service and with multiple counts of false tax returns in connection with: 1) his failure to declare the value of the above renovations as income; 2) his failure to report as income approximately $236,000 in rent payments for a Manhattan apartment, which payments were made by a Manhattan developer with whom Kerik had agreed to conduct business; 3) his failure to report approximately $75,000 in income received from a book publisher; 4) his taking of approximately $80,000 in phony charitable deductions; 5) his failure to report approximately $20,000 in income received from a computer software company; 6) his failure to report wages paid to a domestic employee; and 7) his taking of a false home office expense deduction in connection with a home in New Jersey when he was not yet living in that home.

The Indictment also charges the defendant with making multiple false statements to the White House and other federal officials in connection with his application for positions as advisor to the President's Homeland Security Advisory Council and in connection with his nomination to be Secretary of the United States Department of Homeland Security. The Indictment charges that when Kerik was being vetted for these positions, he made numerous false statements including: 1) failing to disclose as required, and affirmatively misrepresenting, his relationship with the contractors who paid for the renovations on the Riverdale apartment or the fact of the payments; 2) failing to disclose as required that he had submitted false financial disclosure reports to New York City (as described above) and that he had committed a crime by doing so; 3) failing to disclose as required that he had made false statements on a loan application (as described above) and that he had committed a crime by doing so; 4) failing to disclose as required a $250,000 loan that he had taken from a Brooklyn businessman who, in turn, had obtained the funds from an Israeli industrialist who did business with the U.S. Government; and 6) falsely stating that he had no household employees on a regular basis, and that he had not failed to withhold appropriate taxes for any such employee.

Kerik faces, if convicted, a maximum aggregate sentence of 142 years of imprisonment and $4,750,000 in fines. The Indictment also seeks forfeiture of the proceeds of the conspiracy crime in the amount of $255,000.

The defendant is expected to be presented before United States Magistrate Judge GEORGE A. YANTHIS this morning, at which time Judge YANTHIS will hear arguments on bail and a United States District Court Judge will be assigned to the case.

Michael J. Garcia, the United States Attorney for the Southern District of New York; Patricia J. Haynes, the Special Agent in Charge of the New York Field Office, Criminal Investigation, Internal Revenue Service ("IRS"); and Mark Merson, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced the charges.

Mr. Garcia praised the IRS Criminal Investigation Division and the FBI for their fine work during the investigation. He also thanked the New York City Department of Investigation, the Westchester District Attorney's Office, the Bronx District Attorney's Office and the New Jersey Division of Gaming Enforcement for their assistance. He added that the investigation is ongoing. Assistant United States Attorneys Perry A. Carbone and Elliot B. Jacobson are in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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