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Youth Pastor Used Position To Engage In Mortgage Fraud
WHITE PLAINS---A church youth pastor has been sentenced in White Plains federal court to 46 months in prison and was ordered to pay more than $460,000 in restitution, as a result of his conviction after trial of three counts of conspiracy, bank fraud and mail fraud relating to his participation in a mortgage fraud scheme.
The evidence at trial showed that Israel Pena, working with various others, purchased properties in Westchester and New York City and shortly thereafter, often on the same day, "flipped" the properties to others at a substantial profit. The purchasers, however, did not have the means to obtain the mortgage loans they needed to close on the purchases. Instead, Pena and others arranged for false loan applications to be submitted for them.
They submitted different kinds of false information and documents to the banks, including fake W2 forms and fake payroll stubs, reflecting inflated income amounts for borrowers.
In addition, Pena arranged for deposits to be made into borrower's accounts, or into accounts of people who would pretend to be giving gifts to the borrower, so that the lending bank would believe that the borrower had enough funds for a down payment. In fact, no down payment was ever made, and the deposited funds would be returned after the closing.
The evidence at trial in September, 2006, also showed that on one occasion Pena and his co-conspirators bought and sold a property in Yonkers on the same day. To secure an inflated mortgage, Pena and his co-conspirators submitted to the lending bank a fake gift letter falsely indicating that the buyer had received a $50,000 gift, and a $50,000 certified check that purportedly was used toward the purchase, but in fact was returned as soon as the closing was complete. The property later went into foreclosure, and the lender, IndyMac Bank, suffered a significant loss.
In another instance, Pena and his co-conspirators sold a property in Manhattan that they never actually purchased, leaving the buyer with a mortgage, but no property. Pena played a primary role in recruiting potential buyers, a number of whom he knew from his church, where he served as a youth pastor, evidence at trial showed. Many of the buyers were first time home buyers who were not well-informed about real estate and had limited financial means. Many of the deals ultimately ended in the foreclosure of the property and/or personal bankruptcy of the borrower.
The evidence at trial showed that Israel Pena, working with various others, purchased properties in Westchester and New York City and shortly thereafter, often on the same day, "flipped" the properties to others at a substantial profit. The purchasers, however, did not have the means to obtain the mortgage loans they needed to close on the purchases. Instead, Pena and others arranged for false loan applications to be submitted for them.
They submitted different kinds of false information and documents to the banks, including fake W2 forms and fake payroll stubs, reflecting inflated income amounts for borrowers.
In addition, Pena arranged for deposits to be made into borrower's accounts, or into accounts of people who would pretend to be giving gifts to the borrower, so that the lending bank would believe that the borrower had enough funds for a down payment. In fact, no down payment was ever made, and the deposited funds would be returned after the closing.
The evidence at trial in September, 2006, also showed that on one occasion Pena and his co-conspirators bought and sold a property in Yonkers on the same day. To secure an inflated mortgage, Pena and his co-conspirators submitted to the lending bank a fake gift letter falsely indicating that the buyer had received a $50,000 gift, and a $50,000 certified check that purportedly was used toward the purchase, but in fact was returned as soon as the closing was complete. The property later went into foreclosure, and the lender, IndyMac Bank, suffered a significant loss.
In another instance, Pena and his co-conspirators sold a property in Manhattan that they never actually purchased, leaving the buyer with a mortgage, but no property. Pena played a primary role in recruiting potential buyers, a number of whom he knew from his church, where he served as a youth pastor, evidence at trial showed. Many of the buyers were first time home buyers who were not well-informed about real estate and had limited financial means. Many of the deals ultimately ended in the foreclosure of the property and/or personal bankruptcy of the borrower.
The judge, in imposing sentence, said that many of these buyers were "vulnerable victims," particularly susceptible to Pena's misconduct because they knew and trusted him from church.
Source: © 2007 North Country Gazette - 22 january 2007
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