Mortgage Fraud Violator Sentenced to 65 Months in Prison (FL)

Department of Justice ^ | June 3, 2009 | United States Attorney's Office Southern District of Florida

[Larry381]

R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced that defendant Jose G. Martin was sentenced today by U.S. District Court Judge Marcia Cooke to sixty five months in federal prison, to be followed by three years of supervised release. Judge Cooke also ordered a restitution hearing to determine the identity of the victims to be paid by Martin in connection with the $3,198,278 in restitution for losses that resulted from Martin’s participation in a mortgage fraud scheme.

Defendant Jose G. Martin was arrested in January 2009 for facilitating the fraudulent sale of seven residential properties through straw buyers. The scheme resulted in more than $6.6 million in fraudulent loans. Defendant Martin personally received more than $1 million in gross proceeds from this scheme. The defendant pled guilty on April 1, 2009, to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. §1349, and one count of wire fraud, in violation of 18 U.S.C. §1343.

To effectuate the scheme, at the closings, defendant Martin submitted fraudulent invoices for construction work on these residential properties, and received hundreds of thousands of dollars as payment for construction work that was never performed. Defendant Martin then used these proceeds to pay the straw buyers and other co-conspirators, and kept a portion of the money for himself. After the closings, defendant Martin and the straw buyers failed to make payments on the mortgages to the victim lenders, and the properties went into foreclosure.

In one example of this scheme, defendant Martin repeatedly flipped a property on Alesio Avenue in Coral Gables, FL. The Coral Gables property was flipped three times within approximately two years, more than doubling the price of the property from $550,000 to $1,200,000. In the course of these flips of the Coral Gables property, Martin diverted to himself approximately $450,000 for construction work purportedly performed on this property. In addition, Martin paid off three straw buyers of this property, none of whom ever intended to live in the property or make payments on the mortgages. Ultimately, the Coral Gables property went into foreclosure, resulting in significant losses to the lender.

This case was investigated by agencies participating in the Federal-State Mortgage Fraud Strike Force. Mr. Acosta commends the investigative efforts of the Mortgage Fraud Strike Force, with particular commendation to the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Peter A. Forand.