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We left off on Christmas eve with an insurance fraud scheme executed by some of the dumbest criminals in Miami Dade county, but what if any link is there to our tales of mortgage fraud? A simple Google search of some of the names involved yields a treasure trove of information, let's pick a name from the very first page of the police report, Jason Cuza.
YIKES! From the FBI's page...
United States v. Bryan A. Guarch, et al., Case No. 09-20627-CR-Moreno.
On July 23, 2009, thirteen (13) defendants were charged in a 15-count Indictment for their participation in a mortgage fraud scheme that resulted in approximately $4 million in fraudulent loans. Charged in the Indictment were defendants Bryan A. Guarch, 29, Richard Pi, 27, Edwin Garcia, 30, Carlos Martinez, 29, Wayne Bermudez, 29, Oscar Quintero, 28, Sunsy Garcia, 29, Ryan Barouh, 27, Jason Cuza, 30, Anthony Silverio, 26, all of Miami, Rafael Jaramillo, 32, of Hialeah Gardens, Mario Estrada Mora, 25, of Miami Beach, and Vanessa Negron, 27, of Boiling Springs, South Carolina.
According to the Indictment, defendants Guarch and Pi organized the scheme and identified eight properties to be used to defraud mortgage lenders. Guarch and Pi used defendants Edwin Garcia, Rafael Jaramillo, Carlos Martinez, and Wayne Bermudez, to recruit straw buyers to submit fraudulent loan applications to mortgage lenders. Among the straw buyers recruited in this way were co-conspirators Oscar Quintero, Mario Estrada Mora, Sunsy Garcia, and Vanessa Negron.
After submitting fraudulent loan applications to the lenders, Pi and Guarch paid-off loan officers, defendants Ryan Barouh and Jason Cuza, to facilitate the approval of the loans. Guarch and Pi caused the title company closer, defendant Anthony Silverio, to approve and submit to the lender a fraudulent HUD-1 Settlement Statement with an inflated purchase price. In an effort to conceal the fraud, Silverio provided a second HUD-1 Settlement Statement to the sellers reflecting the actual, much lower purchase price of the property. At closing, Guarch and Pi kept more than $1 million in loan proceeds, representing the difference between the inflated purchase price and the price actually paid to the seller for the property. After closing, Guarch and Pi used those loan proceeds to pay off their co-conspirators and to fund their lavish life styles. After each of the closings, the straw buyers defaulted on the loans, causing each of the properties to go into foreclosure and resulting in possible losses to the lenders of more than $2.6 million.
The Indictment includes charges of conspiracy to commit wire fraud and substantive wire fraud. Mr. Sloman commended the investigative efforts of the Federal-State Mortgage Fraud Strike Force, with special commendation to the U.S. Secret Service, U.S. Postal Inspection Service, the Miami-Dade Police Department, and the State of Florida Office of Financial Regulation. The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.
What are the chances? Look at the ring leaders in this Federal indictment who were charged with orchestrating straw buyer schemes, they just happened to be involved in the bogus Exotic Car rental business that we discussed last week. More coming...
What do tourists, straw buyers and exotic cars have in common? Bit of a stretch isn't it? South Florida's economy is heavily dependent on tourism, one aspect of the tourist economy is the car rental business. We experienced a new twist in the car rental business down here in Miami a few years back, rather than offering the regular cast off General Motors, Dodge or Ford product new companies popped up around town that offered Exotic cars for rent. Sounds like the perfect compliment to the Miami vacation, why not cruise around South Beach in Ferrari...Run around Coral Gables in a Lamborghini... Pull up to the nightspots in a Rolls Royce...Perfect, come down to Miami, rent an exotic car and look like a big shot for a few days. Check out the rates, Ferrari Spider for $1400 per day, Lamborghini spider for $1395 per day or a Rolls Royce for $2,900 per day. Not bad considering you got the use of a $200k+ car for a day.There is a problem though, very few of the "entrepreneurs" behind these exotic car rental companies had the financial wherewithal to purchase the vehicles needed for these ventures. More often than not people renting these cars would find out (usually the hard way after they'd been pulled over by a cop) that the exotic cars that they had rented weren't in the name of the company that they rented it from but instead were titled to individuals. Can you imagine renting a car from say Hertz then pulling out the registration and finding out the car belonged to say Juan Martinez? Out of all the so called exotic car rental companies down here in Miami, only a handful were operating legally, that is only a handful were actually purchasing cars in their company name and renting them out as a normal car rental company would. The rest were resorting to all manner of methods to acquire their rental fleet, anything from getting cars in their personal names, using Straw Buyers or at worse, taking over payments from people who could no longer afford the cars. Think about it, rather than purchase the cars outright and lay out a ton of money, if you could use someone elses credit to lease a car, it's a win, win situation. Say the lease payment is $3,000 per month, you rent the car out two days per month to cover the expense and the rest is gravy. Perfect.
This exotic car rental business became a haven for fraudsters towards the end of the real estate bubble. The same tricks of the trade they employed in defrauding banks on bogus real estate deals, transitioned nicely into this car rental scam, straw buyers, bogus loan applications, bank and insurance fraud, etc. What makes no sense to me is how the cops never put two and two together and realized that the guys running these businesses had an extensive history in other types of financial fraud. We'll take a closer look at one such exotic car rental operation tomorrow.
