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NEW YORK---Eight individuals charged with enterprise corruption and other felonies in connection with a multi-million dollar residential mortgage fraud scheme. Attorney General Eliot Spitzer also announced the filing of a civil forfeiture action seeking the recovery of more than $8 million from the defendants.
The 83-count indictment alleges the criminal enterprise, named in the indictment as the "Sandella Group," operated since at least 2001, principally in Brooklyn, Queens and Suffolk County. Defendant Louis Sandella is named as the group's leader, assisted by his brother, defendant Michael Sandella, defendant Danielle Moss Fontanez, and five others, including two real estate attorneys, defendants Gary S. Shaw and Ida D'Angelo.
As outlined in the indictment unsealed Tuesday in Kings County Supreme Court, members of the Sandella enterprise stole millions of dollars from banks and other financial institutions by submitting false and forged documents to secure mortgage loans. The Sandella Group paid people to pose as legitimate real estate buyers. False information about these straw buyers' employment, income and financial assets were provided to the banks to obtain the loans. The banks were also provided false real estate appraisal reports which often misrepresented the physical conditions of the properties, the market value of comparable properties and the identities of the individuals who prepared the reports. Through these reports - prepared by a member of the Sandella Enterprise - the value of individual properties used in the fraudulent mortgage transactions were inflated by $100,000 or more.
The Attorney General's investigation began in 2002, based upon intelligence developed by his Organized Crime Task Force and his Civil Rights Bureau, combined with information from other law enforcement agencies. Additional investigative resources were contributed by the State Banking Department under the direction of state Banking Superintendent Diana L. Taylor, the State Insurance Department, the Federal Bureau of Investigation, the US Department of Labor and the Waterfront Police.
"For the average American, buying a home is their most important investment. The scams carried out by these defendants not only harmed targeted individuals and lending institutions, but had the potential to undermine the housing market in the neighborhoods where they practiced their scheme. Protecting New York's real estate market from this kind of fraud must be a priority for all of law enforcement." Spitzer said.
The ultimate financial losers were the financial institutions, which provided the mortgage loans based on fraudulent applications, Spitzer and Taylor said.
A transaction set out in the indictment as an example of the Sandella enterprise's scheme concerns the January, 2004 sale of a house in Flatbush, Brooklyn. Although the true purchase price of the property was $310,000, the Sandella Group falsely told the bank that the purchase price was $450,000, and applied to the bank for a loan in that amount. The criminal enterprise gave the bank false information about the financial condition of a "straw buyer" that it recruited as a front man in the transaction, and submitted a forged appraisal report. The group then pocketed the bulk of the inflated amount, and allowed the loan to go into default.
Arraigned Tuesday before Judge John J. Walsh wereLouis Sandella, 43, of Commack; Michael Sandella, 41, of Hauppauge; Danielle Moss, 36, of, Commack; Kim Moss Fontanez, 33, of Lindenhurst; Geraldine Moss, 60, of West Babylon; Gary Shaw, 68, of Northport; and Ida D'Angelo, 38, of Dix Hills. One defendant, Andreas Perdikos, 41, of New Jersey, remains at large.
The charges included in the indictment are criminal enterprise, a class B felony; grand larceny in the first and second degrees, a class B and C felony, respectively; scheme to defraud in the first degree, a class E felony; and falsifying business records in the first degree, a Class E felony.
If convicted of the top count, the defendants face prison sentences of up to 25 years. 4-25-06
© 2006 North
Country Gazette
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