Six more headed to prison for roles in Miami condo mortgage fraud scheme

Inman News

A father and son who worked as real estate brokers are among a half-dozen defendants who have been sentenced to prison in recent weeks for their participation in a multi-million dollar mortgage fraud scheme at a luxury apartment complex on Miami's Brickell Bay Drive.

Prosecutors said the defendants used straw buyers to purchase residential properties at The Jade apartment complex, submitting mortgage loan applications and supporting documents containing false information to fraudulently obtain more than $5.6 million in mortgage proceeds from lenders.

The defendants submitted false HUD-1 statements to lenders, and created a second version of the HUD-1 statements listing the actual sales prices that they provided to the seller, prosecutors said. To keep the scheme going, the defendants made some mortgage and condominium association payments and collected rental income for the units. The mortgage fraud proceeds were diverted into shell companies for the defendants' personal use, prosecutors said.

After pleading guilty to conspiracy to commit mail fraud in September, real estate broker Andres Mendez Sr., 47, on Nov. 28 was sentenced to 5 years in prison by U.S. District Judge Donald M. Middlebrooks. Mendez's son, Andy Mendez Jr., entered a similar plea and was sentenced to a year and a day in prison, 18 months of home confinement and five years of supervised release. Both were ordered to pay restitution of $4.23 million.

Real estate attorney Lilia Casal-Diaz, 42, who pled guilty in October to conspiracy to commit tax fraud, was sentenced on Dec. 7 to to a year and day in prison, along with one year of home confinement and three years supervised release, and ordered to pay $509,543 in restitution to the IRS.

Prosecutors said Casal-Diaz, who practiced law in Coral Gables, falsified HUD-1 documents and failed to report on IRS Form 1099-S the sales proceeds from the transactions, or intentionally under-reported proceeds. When approached by IRS investigators, Casal-Diaz provided the agents with a phony Form 1099-S document, claiming proceeds from one of the real estate closings was properly reported to the IRS.

Three other defendants who pled guilty to conspiracy to commit mail fraud in connection with the scheme were sentenced on Oct. 29.   Mortgage broker Josephine Santana, 57, was sentenced to 21 months in prison. Jose Rafael Martinez, 36, was sentenced to 18 months in prison, and Basilio Gomez 52, was sentenced to 15 months in prison. The three defendants, all Miami-Dade County residents, were also sentenced to five years of supervised release and ordered to pay $1.2 million in restitution.

To date, eight defendants have been convicted in connection with the scheme.

Raquel DeJesus Martinez, who pled guilty to conspiracy to commit mail fraud and money laundering, faces up to five years in prison when she is sentenced on Jan. 22.

Jose Arnaldo Rosario, 55, of Miami-Dade County, was sentenced to 46 months in prison on Aug. 5, 2011, after pleading guilty to conspiracy to commit money laundering and wire fraud. Prosecutors said Rosario provided false information to a lender  and received kickbacks from the purchase of two apartments.

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