Nine people, including three Long Islanders, were indicted as part of a mortgage fraud ring that fabricated documents for loans and used sham buyers to steal more than a million dollars from lenders, authorities said Monday.
Between 2012 and 2015, the defendants flipped a total of four properties in Queens and Brooklyn by setting up shell companies to acquire the titles in various fraudulent ways and also to pose as the employers for some of the straw buyers, the Brooklyn district attorney and state attorney general said they found in their joint investigation.
Janelle Defreitas, 37, of Uniondale, masterminded much of the fraud, getting guidance from a disbarred attorney, a tax preparer and a mortgage loan originator to pass borrowing requirements for the sham buyers, prosecutors said. The scammers submitted false loan application documents that gave the straw buyers “grossly inflated incomes from fake jobs, bank accounts with fabricated balances and other false information,” according to authorities in a news release.
The disbarred attorney, Lester Wayne Mackey, 63, of Wyandanch, represented Defreitas or the straw buyers in sales and lied about getting buyers’ down payment to pave the way for the closings, prosecutors said. In reality, he received money from Defreitas to deposit in an attorney escrow account, then returned the money to her later, officials said.
Another man, Darren Downes, 36, of Baldwin, posed as a buyer, authorities said.
State Attorney General Eric Schneiderman called it a “brazen and elaborate” scam, while the acting Brooklyn district attorney said they set up the scam to “manipulate the mortgage process.”
The other defendants are from New York City. All were indicted on various charges that included money laundering, conspiracy, grand larceny, and residential mortgage fraud, prosecutors said.
The investigation stemmed from a 2014 complaint to Brooklyn prosecutors and an automobile fraud insurance case involving Defreitas and Downes, who is serving a prison sentence in that case, officials said.
Defreitas’ attorney, Anthony Grandinette of Mineola, said she pleaded not guilty at arraignment and was held pending a bail of $500,000 bond or $150,000 cash. He declined to comment on the case.
The attorneys for Mackey and Downes could not be immediately reached Monday night. Arraignment information for them was also not immediately available.