James Monahan, 43, New York, New York, the owner of a real estate investment company called Panam Management Group, Inc., and a former sergeant in the New York City Police Department, pled guilty in Manhattan federal court to wire fraud, mail fraud, and conspiracy to commit wire and mail fraud in connection with his participation in a fraudulent real estate scheme. As part of that scheme, Monahan misappropriated approximately $4.7 million he obtained from investors for a real estate development project he claimed to be constructing in the Dominican Republic.
Wednesday, June 12, 2013
Anthony J. Vargas, 42, Modesto, California, pleaded guilty to knowingly falsifying material facts in a loan application. According to court documents, in March 2009, doing business as “Bootstrap Cabinets,” Vargas applied for a $50,000 small business loan under the American Recovery and Reinvestment Act of 2009. Vargas signed the SBA forms, certifying that the information contained in his application was true and complete, which caused the funding bank to approve his loan. In his loan application, however, Vargas knowingly misrepresented his criminal history and, despite having earlier filed for bankruptcy, falsely represented that he had never been involved in bankruptcy proceedings. Approximately three months after being approved for and receiving the SBA loan, Vargas defaulted and filed for bankruptcy. Vargas is scheduled to be sentenced on August 22, 2013, before U.S. District Judge Lawrence J. O’Neill. The maximum statutory penalty he faces is five years in prison, a $250,000 fine, or both. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. United States Attorney Benjamin B. Wagner announced the guilty plea. This case was the product of an investigation by the SBA – Office of Inspector General. Assistant U.S. Attorney Christopher Baker is prosecuting the case.
Jerry Kerley, 60, Kodak, Tennessee, was sentenced to serve four years in prison for his May 2012 federal convictions for wire fraud, bank fraud, and money laundering, all arising from a mortgage fraud scheme. The defendant was sentenced on June 6, 2013, by the Honorable Thomas W. Phillips, U.S. District Court Judge. The indictment charged Kerley and Jeffrey Whaley with conspiring to defraud Citizens Bank, New Tazewell, Tennessee, and SunTrust Mortgage Inc., Richmond, Virginia, through a mortgage fraud scheme. The indictment alleged that the conspiracy involved a straw borrower mortgage fraud scheme in which straw borrowers were induced to obtain mortgage loans in their names based on promises that they would not have to make a down payment or mortgage payments for the property, would receive cash at closing, and would share in the profit following a resale of the property. The indictment further alleged that it was part of the conspiracy that materially false representations were made to Citizens Bank and SunTrust Mortgage, which, among other things, included false representations related to the straw borrowers’ source of funds for down payments and amounts recorded as “cash from borrower” on HUD-1 Settlement Statements and loan applications for the purpose of inducing Citizens Bank and SunTrust Mortgage to disburse the mortgage loan proceeds it had wired to and entrusted with Kerley’s title company Guaranty Land Title. The indictment specifically alleged eight real estate transactions in which Kerley and Whaley concealed from Citizens Bank and SunTrust Mortgage that the borrower did not provide at closing the money identified as the cash from borrower on the HUD-1 Settlement Statement. According to the indictment, in those eight transactions, Citizens Bank and SunTrust Mortgage, in total, wired more than $6 million in loan proceeds to Guaranty Land Title Company for disbursement. The indictment alleged that Kerley, a Tennessee licensed attorney, was the owner of Guaranty Land Title Company where the fraudulent loans were closed. The indictment also alleged that Whaley conducted business through a company known as GBO Enterprises which received substantial sums of money from the loan proceeds. The indictment also alleged that Kerley and Whaley committed money laundering offenses through financial transactions that involved proceeds from the mortgage fraud scheme. Whaley is scheduled to be sentenced in U.S. District Court on July 1, 2013. This investigation was conducted jointly by the Internal Revenue Service-Criminal Investigation, Federal Bureau of Investigation, and the United States Secret Service. Assistant U.S. Attorneys Trey Hamilton and Zac Bolitho represented the United States.