This takes thing to a whole new level…
A new mortgage fraud indictment stands out because it accuses seven current and former police officers and an FBI agent — along with lawyers and brokers — of conspiring to obtain millions in illegal loans.
BY JAY WEAVER, JAMES H. BURNETT III AND AMY SHERMAN
A network of Broward County attorneys, law enforcement officers and mortgage brokers are accused of falsifying a slew of documents to obtain $16.5 million in loans that they used to buy and flip properties during the real estate boom, according to an indictment unsealed Wednesday.
Federal prosecutors said the Broward-based group was organized by ex-Plantation police officer Joseph Guaracino, who recruited five other current and former cops in that city as well as a Lauderhill officer and an FBI agent. They allegedly posed as “straw” buyers who pledged to buy and live in 38 condos and homes in Broward and Palm Beach counties.
The defendants, arrested Wednesday, are accused of conspiring to submit false income records, job descriptions, bank statements and loan applications to dupe lenders in South Florida and elsewhere from 2004 to 2007.
But their real goal — disguised by the false paperwork — was to rent the properties and then sell them, thereby “realizing substantial profit,” according to the indictment.
Without working together as “straw” buyers looking for primary residences, the individuals would never have been able to quality for so many mortgages and generate handsome profits, the indictment says. Some of the profits were used to purchase even more homes.
The real estate closings were handled by prominent Fort Lauderdale attorney Steven Stoll, who owned a title company, and Boca Raton lawyer Stephen Orchard, who worked with Stoll. The title attorneys falsely represented to the mortgage lenders the source of the down payments from borrowers needed to close the transactions, according to the indictment returned Tuesday by a federal grand jury in Fort Lauderdale.
Stoll’s attorney Robert Nicholson on Wednesday defended his client, saying, “Steve Stoll is very disappointed the government has decided to ignore the substantial evidence of his innocence.”
Two other mortgage brokers and a processor who worked for Stoll were also charged.
Although the law enforcement officers didn’t use their positions to carry out the alleged mortgage scheme, their case stands out amid a recent flurry of federal loan fraud prosecutions because it involves eight current and former law enforcement officers. The 13 defendants named in the indictment will have their first appearances in federal court Thursday.
“This indictment charges a group of individuals who conspired to enrich themselves by committing mortgage fraud,” said U.S. Attorney Wifredo Ferrer. “It includes a number of professionals who betrayed their profession for greed, and in the process, undermined the integrity of the mortgage marketplace on which we all rely.”
Among others named in the indictment: Joseph Guaracino’s brother, Dennis Guaracino Jr., and John Velez, both former Plantation police officers. Velez, a former SWAT team and Street Crimes Unit member, was named Plantation Police Department officer of the year in December 2004.
Also charged: current Plantation officers Daryl Radziwon, Casey Mittauer and Joseph DeRosa, along with Lauderhill officer Joseph LaGrasta.
FBI agent Robert DePriest, of Plantation, was also arrested. An FBI spokeswoman declined to comment.
In a statement, the Plantation Police Department said that in June 2007 it became aware that several of its officers were possibly involved in mortgage fraud and requested the assistance of the Florida Department of Law Enforcement to investigate.
FDLE, along with the U.S. attorney’s office, notified the department in January that three of its officers were targets of a probe. They were immediately placed on administrative leave with pay. On Wednesday, their status was changed to unpaid leave.