Five defendants were charged in an eight-count Indictment on July 21, 2008, for their participation in a mortgage fraud scheme that resulted in the issuance of more than $830,000 in mortgage loan.

From Miami, Sixto Figueroa, 57, and his wife Susy Figueroa, 44, fraudulently sold residential lots in Port LaBelle, Florida. The Figueroas recruited individuals to pose as buyers of the properties to execute their scheme. Co-conspirators Rolando Herrera, 63, and Manuel Garcia, 40, both of Miami, Florda, were among the straw buyers recruited and paid by the Figueroas.

The Figueroas submitted fraudulent loan applications to Wachovia Bank as part of the scheme.  The applications contained false information regarding the straw buyers’ financial condition, including fraudulent tax returns and fabricated bank statements, which falsely suggested that the straw buyers had greater income and assets than they actually did.  It was also falsely stated that the straw buyers would use their own money to pay closing obligations, according to the HUD-1 Settlement Statements provided to Wachovia.  All of the straw buyers’ closing obligations were actually paid by the Figueroas.

The bank wired the loan proceeds to defendant Yolanda Garcia-Montes’s title company for closing after the loans were approved. Garcia-Montes improperly released these funds to the Figueroas for three purported property sales.  Figueroas, in turn, closed obligations for those deals by using the money to pay the straw buyers’ cash.  After the non-qualifying straw buyers failed to make the required mortgage payments, each of the Wachovia mortgage loans eventually went into default , causing substantial losses to Wachovia.

The indictment was announced by Jeffrey H. Sloman, Acting United States Attorney for the Southern District of Florida. The defendants were charged with conspiracy to commit bank fraud and bank fraud. The investigative efforts of the Federal State Mortgage Fraud Strike Force were commended by Mr. Sloman.  The United States Secret Service and Miami-Dade Police Department also received special commendations.  The Assistant U.S. Attorney Joseph B. Shumofsky is prosecuting the case.