Indictments Handed Up in $14M Mortgage Lending and Money Laundering Scam

Defendants led lavish lifestyles while ripping off homeowners, mortgage companies

MINEOLA, NY - Nassau County District Attorney Kathleen Rice announced today that Joseph LaForte, 35, his brother James LaForte, Jr., 29, their mother Tina LaForte, 57, their father James LaForte, Sr., 59, and friend Jaime Lynn Guli, 28, who were arrested and charged in October of last year, have had their charges upgraded to include five counts of Grand Larceny in the First Degree, a Class B Felony, twelve counts of Grand Larceny in the Second Degree, a Class C Felony, Money Laundering in the First Degree, a Class B Felony, and Conspiracy in the Fourth Degree, a Class E Felony.  Co-defendants Francis Alfieri, 27, and Michael O’Leary, 29, were also arrested and charged in October, 2005, on charges of Money Laundering in the First Degree, a Class B Felony, and Conspiracy in the Fourth Degree, a Class E Felony.  The remaining defendants, Mr. Alfieri’s mother, Christine Alfieri, 53, and Stephen Caliendo, 34, have surrendered today to the Nassau County District Attorney’s Office following an indictment last week that charges Ms. Alfieri and Mr. Caliendo with five counts of Grand Larceny in the First Degree, a Class B Felony, eleven counts of Grand Larceny in the Second Degree, a Class C Felony, Money Laundering in the First Degree, a Class B Felony, and Conspiracy in the Fourth Degree, a Class E Felony.  Ms. Alfieri and Mr. Caliendo were arraigned this morning in front of Judge George Peck. 

The defendants are officers, employees, and friends of employees at Joseph LaMattina and Associates, Inc., a business which was incorporated March 19, 2004, to appear as a law firm.  The corporation acted as a settlement agent for lending institutions who were funding mortgages to homeowners.  These charges stem from allegations that the defendants moved millions of dollars in and out of the corporation’s accounts and transferred funds back and forth between other companies that were controlled by the defendants.  Joseph LaMattina is a practicing attorney and uncle to Joseph and James LaForte and Tara Gibson. 

A person is guilty of grand larceny in the first degree when he steals property and when the value of the property exceeds one million dollars (PL §155.42). 

A person is guilty of grand larceny in the second degree when he steals property and when the value of the property exceeds fifty thousand dollars (PL §155.40). 

A person is guilty of money laundering in the first degree when knowing that the property involved in one or more financial transactions represents the proceeds of a class A, B, or C felony, he or she conducts one or more financial transactions which in fact involve the proceeds of any such felony:  Knowing that the transaction or transactions in whole or in part are designed to conceal or disguise the nature, the location, the source, the ownership or the control of the proceeds of specified criminal conduct; and the total value of the property involved in such financial transaction or transactions exceeds one million dollars (PL §470.20.1).

A person is guilty of conspiracy in the fourth degree when, with intent that constituting a class B or class C felony be performed, he or she agrees with one or more persons to engage in or cause the performance of such conduct (PL §105.10). 

Mr. LaMattina agreed to incorporate a business with his wife’s family in order to make income from residential closings.  Once becoming incorporated, Joseph LaMattina and Assoc, Inc. opened a bank account at Victory State Bank on March 24, 2004.  The bank account was entitled the Joseph LaMattina and Associates, Inc., Joseph LaMattina Settlement Trust Account.  Bank documents at that time indicate that Joseph LaMattina was listed as Secretary and owner of 100% of the shares of the corporation.  Joseph LaForte was the Vice President and Tina LaForte, its President.  Mr. LaMattina became ill and agreed to allow his wife’s family members to run the corporation while he would remain secretary of the corporation and receive $75.00 per closing.    Tina and Joseph LaForte then opened an office at 220 Old Country Road, Mineola, NY, hired two attorneys, a number of notaries and began to handle closings for lending institutions.  On July 16, 2004, bank documents indicate that Joseph LaForte transferred his shares to his sister, Tara Gibson, and his mother, Tina LaForte.

The Settlement Trust Account was established for mortgage lenders to wire funds into so that closings could be funded.  The corporation was then supposed to distribute the entire amount of the incoming wire for a particular loan at the direction of the borrower.  One of the checks it would issue would be for its own fee, which the borrower would pay from mortgage proceeds.  That fee was generally $875.00.  Once the closing was funded, the amount for that mortgage should have been completely disbursed, leaving no funds left over in the account.

It is alleged that the defendants used the Settlement Trust Account to obtain funds from lending institutions in order to invest in businesses in Florida, real estate, purchase a 37-foot boat, various luxury cars, including Bentleys, Rolls Royces, Mercedes, a Corvette, and a Maybach.  $250,000 was also stolen to make two mortgage payments on homes owned by the defendants or their wives.  James LaForte, Jr. caused a bank check in the amount of $331,851.55 to be issued to a 22-year-old female residing at his address.  The defendants also cashed bank checks, which were purchased with laundered proceeds of $590,000.

The money from the Settlement Trust Account allegedly was moved through entities including, Key Land Services, a Staten Island Title company operated by Jaime Lynn Guli, GMC Land Services of Florida and Richmond Abstract Corp., both operated by Joseph W. LaForte, Hillis, Inc., operated by James LaForte, Jr., New Dorp Construction, operated by James LaForte, Sr., Prelude Abstract, operated by Ms. Alfieri and other related businesses.  Funds totaling $578,000 were also laundered through Mr. Alfieri’s personal bank account.  It was also discovered by investigators that James LaForte, Jr., Joseph LaForte, Mr. Alfieri, and Mr. O’Leary cashed bank checks totaling $610,000 at Page Avenue Check Cashers, where Mr. O’Leary was employed.  In addition to those allegations, it is believed that employees of Joseph LaMattina and Assoc., Inc. were sent to Victory State Bank to cash checks, which were under $10,000.

In June, 2005, checks issued on the Settlement Trust Account began to bounce.  In August, 2005, the account was empty and the company had disappeared.  The Nassau County District Attorney’s Office began the investigation into Joseph LaMattina and Associates, Corp. on August 16, 2005, after a homeowner had a check in the amount of $51,621.36 bounce from his lending institution First Continental Mortgage, Corp.  Joseph LaMattina and Associates, Corp. was the acting attorney for First Continental Mortgage, Corp, at the closing and absconded with $559,800 of the mortgage proceeds.  This resulted in the homeowner’s prior mortgage remaining unpaid.  First Continental Mortgage, Corp. has informed the Nassau County District Attorney’s Office that approximately $1.5 million was wired into the Settlement Trust Account for the purpose of mortgage closings and has been misappropriated.  Other homeowners and lending institutions have come forward with similar complaints and losses incurred as a result of funds beings diverted from the Settlement Trust Account.

Two search warrants were executed in this case.  The first search warrant was executed at 220 Old Country Road, Mineola, NY.  Fifty boxes of loan records and two computers were seized from the office.  The second search warrant was executed at the offices of Stephen Caliendo at 2071 Clove Road, Staten Island, NY.  Ten boxes of accounting records and five computers were seized from that location.  Mr. Caliendo was the accountant for Joseph LaMattina and Assoc., Inc., GMC Land Services of Florida, Hillis, Inc., Key Land Services, Prelude Abstract, and other related businesses.  Mr. Caliendo ran the daily finances at Joseph LaMattina and Assoc., Inc. and was responsible for advising employees when loans were ready for dispersal.

If convicted, the defendants face up to eight and one-third-to-twenty-five years in prison on each count of Grand Larceny in the First Degree and Money Laundering in the First Degree.

The defendant’s next court appearance will be May 19, 2006, in front of Judge Peck.

Along with Investigator William Walsh and Financial Investigator Ed Krayewski, ADAs Cliff Brock and Kristen Fexas of the Economic Crimes Bureau are handling the case for the District Attorney’s Office.

The charges are merely accusations, and the defendants are presumed innocent until and unless proven guilty.

Name: Joseph W. LaForte
Age: 35
Address: 15 Galveston Loop, Staten Island, NY & 100 South Pointe Drive, Miami Beach, FL
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (twelve counts), Money Laundering 1°, Conspiracy 4°

Name: James LaForte, Jr.
Age: 29
Address: 65 Tuckahoe Avenue, Staten Island, NY
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (twelve counts), Money Laundering 1°, Conspiracy 4°

Name: Tina LaForte
Age: 57
Address: 69 Darnell Lane, Staten Island, NY
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (twelve counts), Money Laundering 1°, Conspiracy 4°

Name: James LaForte, Sr.
Age: 59
Address: 69 Locust Avenue, Staten Island, NY
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (twelve counts), Money Laundering 1°, Conspiracy 4°

Name: Jaime Lynn Guli
Age: 28
Address: 15A Galveston Loop, Staten Island, NY
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (twelve counts), Money Laundering 1°, Conspiracy 4°

Name: Christine Alfieri
Age: 53
Address: 346 Tanglewood Drive, Staten Island, NY
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (eleven counts), Money Laundering 1°, Conspiracy 4°

Name: Stephen Caliendo
Age: 34
Address: 175 Marine Avenue, Brooklyn, NY
Charges: Grand Larceny 1° (five counts), Grand Larceny 2° (eleven counts), Money Laundering 1°, Conspiracy 4°

Name: Francis Alfieri
Age: 27
Address: 18 Hillis Street, Staten Island, NY
Charges: Money Laundering 1°, Conspiracy 4°

Name: Michael O’Leary
Age: 29
Address: 120 Poillon Avenue, Staten Island, NY
Charges: Money Laundering 1°, Conspiracy 4°