November 1, 2005

DILLON ANNOUNCES:

MORTGAGE/REAL ESTATE FRAUD SWEEP

Nassau County District Attorney Denis Dillon announced today the DA’s Criminal Frauds Bureau has charged six individuals as a result of a mortgage/real estate fraud sweep. The mortgage/real estate fraud schemes involved different defendants and were carried out in a variety of ways. In the most egregious case the principal defendant attempted to steal the homes of two victims, who were facing financial hardship, by engaging in an elaborate real estate foreclosure rescue scam. In another case a defendant diverted for his own benefit $16,000.00 of the mortgage proceeds at the closing that the homeowner was entitled to receive. In a third case the defendant sold property he did not even own to two different attorneys. In a fourth case a defendant sold the same piece of property to two different buyers just twenty days apart.

"Mortgage Fraud is a serious issue facing Nassau residents," said Dillon. "In many instances we find defendants working in concert to carry out their frauds and preying on those that are facing financial hardship. One example of these schemes stems from the charges we have filed against Alton Lawson, a.k.a. Alton Lawson and Lamont Lawson, 43, of 88-73 Commonwealth Boulevard, Queens; Chester W. Matthews, 54, of 107-12 133rd Street, Richmond Hill; and Reginald Johnson, 32, of 25 South Haven Drive, Brookhaven. All three defendants worked in concert to defraud a 45 year old woman from Roosevelt and a 80 year old female Hempstead resident, who were both homeowners that were having financial difficulties. Each victim received unsolicited visits from Lawson who told them he could help them save their houses by refinancing. Through deceit and misrepresentation, Lawson tricked the victims into selling their houses to Matthews for $295,000 and $320,000. The ‘sales’ took place in Garden City and Mineola. Matthews, who was serving as a ‘straw’ or phony buyer for Lawson, was able to purchase the properties of the victims by obtaining mortgages for the full amounts from Fremont Investment and Loan of Brea, California and BNC Mortgage, Inc. of Irvine, California, on the basis of fraudulent income information submitted on the mortgage applications. Johnson, who was the mortgage broker from Reliable Capital Corporation, provided the fraudulent mortgage application that was submitted to BNC Mortgage, Inc., which enabled Matthews to ‘purchase’ the Hempstead home. Johnson also provided Lawson a ‘show’ settlement check made out to the Hempstead victim for $15,852.27 that was shown at the closing which enabled the loan to close. After the closing, Johnson had the check deposited into his bank account at North Fork Bank. Although the outstanding mortgage on the Roosevelt victim’s house was paid, she received nothing, while Lawson received mortgage proceeds totaling $46,383.54. Although the tax lien on the Hempstead victim’s home was paid, she received only $150,555.10 of the mortgage proceeds, while Lawson received mortgage proceeds totaling $110,500. Matthews was paid $17,500 and $20,000 by Lawson for serving as the ‘straw’ buyer on each of the two properties. Johnson was paid $10,715 from the mortgage proceeds for serving as the mortgage broker on the sale of the Hempstead house. After essentially stealing the houses of the two victims and retaining substantial portions of the mortgage proceeds, Lawson, in the name of Matthews, the purported owner of the properties, had begun eviction proceedings to evict each complainant. Lawson, who was the principal architect of this fraud, has been charged with two counts of Grand Larceny in the Second Degree, a Class C Felony and two counts of Criminal Possession of a Forged Instrument in the Second Degree, a Class D Felony. Johnson has been charged with one count of Grand Larceny in the Second Degree, a Class C Felony and one count of Criminal Possession of a Forged Instrument in the Second Degree, a Class D Felony. Matthews has been charged with two counts of Grand Larceny in the Third Degree, a Class D Felony and two counts of Criminal Facilitation in the Fourth Degree, a Class A Misdemeanor."

"Louis Carter, 54, of 470 Brookside Avenue, Roosevelt has also been charged," said Dillon.. "Carter was given power of attorney by a Wyandanch woman to sell her house at 19 Beech Street, Wyandanch. Carter sold the property for $250,000 on May 10, 2005 at a closing that took place at 585 Stewart Avenue, Garden City. At the closing the victim’s mortgages of $174,589.19 and $16,952.89 were paid off, as were other closing costs. The victim, however, received only one check for $7,926.90. Our investigation has disclosed that at the closing Carter, without authorization or permission, directed that a check for $16,000 be made out to pay for three months past due rent that he owed. The defendant has been charged with one count of Grand Larceny in the Third Degree, a Class D Felony, punishable by up to 7 years in prison."

"Daniel Stern, a.k.a. Daniel Slovak, 41, of 7 Chester Avenue, Apt. 2, Brooklyn, was also charged and arrested as part of this mortgage fraud," said Dillon. "On June 23, 2004, Stern, while posing as an attorney and the President of Nietos Realty, Inc. sold a piece of commercial property located at 286 Willoughby Avenue in Brooklyn, to an attorney. The closing took place at a law office in Uniondale. During the next month the victim attempted to work on the property with the intention of building condominiums, but discovered that another party was already conducting repairs. Upon further inquiry the victim discovered that Stern had sold the same piece of property to another attorney. After further investigation we discovered that Stern is not an attorney and that the property was actually owned by another Nietos Realty, Inc. Stern has been charged with one count of Grand Larceny in the Third Degree and two counts of Criminal Possession of a Forged Instrument in the Second Degree, both Class D Felonies, punishable by up to 7 years in prison."

"Jamal Zafar, 34, of 578 Old Country Road, Huntington, was also charged by the DA’s Criminal Frauds Bureau," said Dillon. "On March 14, 2004, Zafar offered to sell a house located at 1542 Brentwood Road, Bayshore to two individuals. Zafar told them that the purchase price was $155,000 but that the property had to be purchased in cash, it could not be financed. Zafar further stated that the house was a Section 8 rental and needed some repairs, but told them not to worry about repairs since they would be receiving the $1,400 monthly rent from Section 8. The victims, who were looking for investment properties, agreed to the offer. On March 18, 2004, the victims attended a closing in Elmont and paid $155,000 in cash for the property. The deed, however, was executed in the name of Zafar who said that he would sell the property for them. After several months of stalling Zafar finally conveyed the property by a signed deed executed on August 11, 2004. The deed was recorded on September 2, 2004 at the Suffolk County Clerk’s Office. When the victims went to record the deed, however, they discovered that Zafar had already sold the same house to another individual on July 22, 2004 for $275,000. Zafar has been charged with one count of Grand Larceny in the Second Degree, a Class C Felony and one count of Criminal Possession of a Forged Instrument in the Second Degree, a Class D Felony. If convicted he faces up to 15 years in prison."

"Mortgage fraud is a growing phenomenon in our country," Dillon went on to say. "It is being fueled by a very hot real estate market and very slick, unscrupulous individuals who seek to exploit financially vulnerable homeowners. The arrests that I am announcing today underscore the importance of exercising extreme caution when it comes to buying or selling a home or property."

Dillon offered two specific pieces of advice: "One, homeowners should always be represented by legal counsel of their own choosing who will protect their interest at the closing; and two, homeowners should never agree to sign a quitclaim deed on the representation that they will get their home back at a later time. In many cases the homeowner has lost the home forever.

It is extremely important that homeowners do not rush in to any real estate transaction and that they consult with reputable professionals before parting with what is perhaps, their most valuable asset – their home."

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