Defendants Are Alleged To Have Fraudulently Obtained Short-Sale Discounts And Loans By Submitting False Information To Mortgage Companies.
New York, NY - April 25, 2017 - New York State Attorney General Eric Schneiderman, together with Acting Brooklyn District Attorney Eric Gonzalez, today announced that nine individuals have been variously charged with money laundering, mortgage fraud, grand larceny, conspiracy, and other charges related to their participation in a scheme to defraud mortgage lenders that spanned two New York City boroughs and resulted in over $1 million in ill-gotten mortgage loans.
Attorney General Schneiderman said, “Our investigation uncovered a brazen and elaborate scheme to defraud mortgage lenders and steal over one million dollars. We have zero tolerance for anyone who tries to cheat the system — and we won’t hesitate to bring them to justice. I thank the Acting District Attorney for his partnership on this case.”
Acting District Attorney Gonzalez said, “These defendants—among them a disbarred attorney, a tax preparer, a loan originator, and a New York City investigator—allegedly engaged in an elaborate scheme to manipulate the mortgage process by using lies, sham companies and fake documents to steal millions of dollars from lending institutions. Those who wish to profit from fraudulent and criminally dishonest business practices in Brooklyn will be fully investigated and prosecuted and we thank the New York State Attorney General’s Office for their diligence and hard work on this case.”
The defendants are Janelle Defreitas, 37, of Uniondale, Long Island; Raymond McKayle, 53, of East Flatbush, New York; Lester Wayne Mackey, 63, of Wyandanch, New York; Darren Downes, 36, of Baldwin, New York; Jaipaul Persaud, 54, of Fresh Meadows, New York; Roxanne Harmon, 51, of Jamaica, New York; June Whyte, 54, of Ozone Park, New York; Rickley Gregoire, 33, of Brooklyn, New York; and Paula Blackwood-Sambury, 50, of Cambria Heights, New York. The defendants were variously charged with money laundering, grand larceny, residential mortgage fraud, offering false instruments for filing, conspiracy, and related charges before Brooklyn Supreme Court Justice Danny Chun.
According to the indictment, from 2012 to 2015, defendants Defreitas, McKayle, Mackey, and Persaud allegedly engaged in a scheme to defraud mortgage lenders and steal mortgage proceeds. In the course of the scheme, the defendants allegedly used sham corporations to acquire title to four properties in Brooklyn and Queens, and then conspired with defendants Downes, Harmon, Whyte, Gregoire, and Blackwood-Sambury to obtain mortgages to “buy” the properties in manufactured resales. The defendants are alleged to have concealed the fact that the buyers couldn’t afford the homes by submitting fraudulent mortgage applications showing grossly inflated incomes from fake jobs, bank accounts with fabricated balances and other false information.
According to the investigation, Defreitas acquired title to properties located at 546 Chauncey Street in Ocean Hill, Brooklyn; 158 Tompkins Avenue in Bushwick, Brooklyn; 85-17 Sutter Avenue in Ozone Park, Queens; and 115-87 223rd in Cambria Heights, Queens, through shell corporations that included West North Capital, Inc., Housing Enhancement and Lifetime Planning (“HELP”), and others. Defreitas allegedly used defendants Downes, Whyte, Gregoire and Blackwood-Sambury to “purchase” the acquired real estate from Defreitas and her companies at significantly higher prices. To facilitate the sales, it is alleged that McKayle, a licensed mortgage loan originator, would direct Defreitas on how to alter and falsify material information in loan applications so that unqualified buyers would be approved for loans they could not afford.
According to the indictment, Persaud, a tax preparer, helped Defreitas establish sham corporations and then prepared fake pay stubs and W-2 statements purporting to show that the buyers worked for – and were paid by – the sham companies. In at least one instance, Persaud also allegedly altered income documents from a legitimate employer to show inflated earnings. McKayle, a mortgage loan originator, is alleged to have knowingly submitted the false and fraudulent applications and supporting documents to unsuspecting mortgage companies. It is also alleged that Mackey, a disbarred attorney, falsely represented that he had received the down payments that buyers were required to make; in fact, in some instances, the supposed down payments were provided by Defreitas, which Mackey sometimes helped to conceal by depositing checks into his attorney escrow account and then returning the funds to Defreitas. Mackey is also alleged to have represented Defreitas or the defendant buyers at the closings for most of the fraudulent real estate transactions.
In certain instances, it is alleged, the defendants would acquire properties via a short-sale—an option available for property owners who are unable to afford their mortgage payments and cannot sell the home for enough money to repay the mortgage. According to the investigation, Harmon, who is an investigator for the New York City Department of Investigation, owed approximately $512,000 on her mortgaged property at 85-17 Sutter Avenue. Harmon and Defreitas allegedly conspired to fraudulently apply for a short-sale via Harmon’s mortgage holder. Defreitas concealed her involvement by purporting to represent Harmon through one of the shell companies. Eventually, based on Harmon’s supposed hardship, the mortgage company agreed to a $100,000 short sale to West North Capital – which was also owned by Defreitas. As a result of misrepresentations made by Harmon and Defreitas to the mortgage company, Harmon’s debt was reduced by approximately $412,000, and Defreitas owned the property without a mortgage lien. A few months later, Defreitas and McKayle submitted a fraudulent mortgage application so that defendant June Whyte, Harmon’s sister-in-law, could “buy” the property from West North Capital. Whyte’s fraudulent application, including fake paystubs and W-2 statements created by Persaud, was approved and West North – and Defreitas – collected almost $400,000 in mortgage loan proceeds.
The investigation originated from a 2014 complaint to the Brooklyn District Attorney’s Real Estate Fraud Unit, as well as an automobile insurance fraud case handled by the New York State Attorney General’s Office involving Defreitas and Downes, for which Downes is currently incarcerated. It culminated in a joint investigation and prosecution of the mortgage fraud allegations by the Brooklyn District Attorney’s Frauds Bureau and the Real Estate Enforcement Unit of the Attorney General’s Criminal Division.
The charges against the defendants are allegations and the defendants are presumed innocent unless and until proven guilty.
The Attorney General and the Acting District Attorney thank the Department of Investigation, the New York City Office of the Sheriff, and the New York City Department of Finance, the New York State Department of State, and the New York State Department of Taxation and Finance for their help in this investigation.
The case was investigated by Detective Investigator John Rodriguez, under the supervision of Jim Fenrich, Supervising Detective Investigator, and William Pettie, Deputy Chief Investigator, of the District Attorney’s Investigations Bureau and Investigator Steven Pratt under the supervision of Supervising Investigator Sylvia Rivera, Deputy Chief Investigator John McManus and Chief Investigator Dominick Zarrella, of the New York State Attorney General’s Office Investigations Bureau.
The case was also investigated by former Forensic Auditor Matthew Croghan and Forensic Auditor Kristina Kojamanian of the Forensic Audit Section, under the supervision of Chief Edward J. Keegan Jr. and Deputy Chief Sandy Bizzarro.
The case is being jointly prosecuted by the New York State Attorney General’s Office and the Brooklyn District Attorney’s Office. The case is being handled by Assistant District Attorney Liz Kurtz, of the District Attorney’s Frauds Bureau and Assistant Attorney General Scott Mendelsohn, of the Attorney General’s Real Estate Enforcement Unit, who is cross-designated as an Assistant District Attorney in the Investigations Division, under the supervision of Assistant District Attorney Felice Sontupe, Chief of the District Attorney’s Frauds Bureau, and Assistant District Attorney Richard Farrell, Chief of the Real Estate Fraud Unit, under the overall supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the District Attorney’s Investigations Division.
The Attorney General’s Real Estate Enforcement Unit is headed by Special Counsel to the Criminal Justice Division, John Spagna, under the supervision of Public Integrity Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. Legal Support Analyst Allen George assisted in the prosecution of this case.