Three Long Islanders were among six people charged Wednesday in a scheme designed to steal millions of dollars from lending institutions, federal prosecutors said.
A six-count indictment was unsealed in federal court in Brooklyn charging mortgage broker Alex Barrett, of Farmingville; property manager Barthelemy Adjavehoude, of Baldwin, and property manager Samuel Terrell Bell, of North Babylon. with engaging in a bank and wire-fraud conspiracy.
Also charged were title agent Michelle Baker, property manager and self-described foreclosure specialist James Bayfield and property manager Dirk Hall, all of Jamaica, Queens, according to a news release from the office of Loretta E. Lynch, U.S. attorney for the Eastern District of New York.
Previously, George Alderdice, a Manhasset lawyer, and Sharif Rashed, an appraiser also of Jamaica, pleaded guilty to conspiring to commit bank and wire fraud.
"Through a web of lies and false documentation, these real estate professionals allegedly stole millions from banks, which they used to line their own pockets," Lynch said in a statement.
Adjavehoude, Baker, Bayfield and Bell were arraigned Wednesday before U.S. Magistrate Judge Lois Bloom at U.S. District Court in Brooklyn.
They face up to 30 years in prison if convicted.
The indictments said the conspirators and other participants in the scheme caused mortgage loan applications with false information to be submitted to lending institutions in connection with the purchase of residential properties.
These applications contained fraudulently inflated purchase prices and appraisals for the properties, as well as false information about the assets and incomes of the purchasers, many of whom were being compensated to act as straw buyers, the release said.
Prosecutors said the conspirators also falsified U.S. Housing and Urban Development Department forms and provided false down payment checks to make it appear that straw buyers and the other borrowers had made down payments in connection with the purchase of the properties.
The conspirators often conducted simultaneous purchases and sales of the properties, sometimes called "flips," to conceal their criminal involvement and to inflate the value of the properties, prosecutors said.
As a result of the false applications and appraisals, the lending institutions unwittingly issued millions of dollars in mortgage loans secured by properties that had inflated appraisal values to individuals who had insufficient income and assets to qualify for the mortgage loans, prosecutors said.
In many instances, the straw buyers and the other borrowers didn't make their mortgage payments and defaulted on the loans.
The conspirators collectively caused the lending institutions to loan more than $5.5 million, of which more than $2.7 million was the conspirators' profit from the scheme.
The investigation identified at least 17 properties involved, including locations in Cambria Heights, Far Rockaway, Brooklyn, Laurelton, Jackson Heights, Jamaica, Hempstead, Rosedale and Hollis.