Queens District Attorney Richard Brown, joined by New York State Department of Financial Services Superintendent Benjamin Lawsky, announced that three individuals including a Richmond Hill attorney and his sister have been charged with conspiring to commit mortgage fraud and larceny from Wells Fargo Bank by fraudulently obtaining mortgage funds in excess of $3.3 million pertaining to the purchase of six properties – including four in Queens – during a six-month period in 2008.
Brown identified the three defendants as attorney Michael Gangadeen, 47, of Rockville Center, N.Y., his sister Savitri Gangadeen, 49, of Floral Park, N.Y., and former Wells Fargo loan officer/mortgage consultant Paul Constante, 38, of Westbury, N.Y. The defendants have each been charged with first-degree grand larceny, first-degree criminal possession of stolen property, first-degree falsifying business records, fourth-degree criminal facilitation, first degree scheme to defraud and fourth-degree conspiracy. If convicted, they each face up to 25 years in prison. Constante and Savitri Gangadeen are presently awaiting arraignment in Queens Criminal Court, and an arrest warrant has been issued for Michael Gangadeen.
Brown said that, according to the charges, Constante, who at the time was a loan officer/mortgage consultant for Wells Fargo Home Loans, prepared and submitted the loan applications of the applicants purchasing the six properties — and which contained information, such as the borrowers’ employment, income, assets and liabilities — and stated that he had obtained the information from interviewing the applicants.
Wells Fargo business records allegedly included supporting loan documentation that consisted of the applicants’ pay stubs and bank statements. It is alleged that in reviewing the supporting loan documentation several of the bank statements submitting for the different borrowers contained the same transaction details for deposits and withdrawals but had been changed to reflect the respective borrower’s name, a different account number and a different opening and ending balance. It is additionally alleged that the same account numbers were used for different borrowers in at least two instances and that there were instances where a borrower’s name was reflected on one page of a bank statement but a different name was reflected on a second page of the same bank statement.
It is further alleged that at least four of the borrowers stated that they had never provided Constante with the information contained on the loan applications about their employment, income and assets and, in fact, had never communicated or had any dealings with him and that the information on the applications was false and inflated and that they were unaware that the bogus information was submitted in order for their loans to be approved.
The four borrowers allegedly stated that the person they met with about their loan and to whom they provided information regarding their actual employment status, income, pay stubs and bank statements was Savitri Gangadeen, an employee of MTS Funding, a mortgage brokerage company. MTS Funding was owned and operated by Michael Gangadeen, who also maintained a law office at the same location between Jan. 1, 2008, and June 26, 2008, and it was there that the closings for all six properties took place and in which Michael Gangadeen acted as the settlement attorney for the bank and as the individual preparing the settlement statements.
In one instance, it is alleged that the Wells Fargo business records pertaining to a property that Michael Gangadeen was selling to one of the buyers contained a HUD-1 settlement statement — prepared and signed by Michael Gangadeen as the bank’s settlement attorney and also as the seller — indicating that he had received a $5,000 deposit from the borrower for the purchase of the property and further that the borrower had paid $96,134.75 that was due at the closing. In fact, it is alleged, the borrower had neither made a down payment nor did she make any payments at the closing. Based on a review of Wells Fargo business records, Michael Gangadeen received more than $60,000 from this transaction.
Similarly, in each of the other five transactions, the buyers were required to bring a total of more than $315,000 to the closings in order for the closings to proceed and mortgage funds to be released — otherwise Michael Gangadeen was required by Wells Fargo to stop the closings and not proceed. It is alleged that in three instances, the buyers did not pay a total of $187,650 that was due at the closings and that the closings proceeded — with Michael Gangadeen allegedly signing certifications as the bank’s attorney attesting that the money due from the buyers was paid.
Finally, it is alleged that a review of Capital One Bank business records pertaining to Michael Gangadeen’s escrow account showed that Gangadeen made disbursements of the mortgage proceeds to himself and others and did not comport fully with the representations made in the HUD-1 settlement statements for the six purchased properties. For instance, it is alleged that there were hidden and unauthorized disbursements made to Savitri Gangadeen in amounts that often exceeded $5,000 per closing. Similarly, a review of Wells Fargo Bank’s business records allegedly revealed that Constante received commissions in excess of $3,000 for originating the six loans.
The investigation was conducted by the Criminal Investigation Bureau of the New York State Department of Financial Services.
Brown expressed his thanks to Wells Fargo Bank for their cooperation and assistance in the investigation.
Assistant District Attorney Allison Wright, of the District Attorney’s Economic Crimes Bureau, is prosecuting the case under the supervision of Gregory Pavlides, bureau chief, and Christina Hanophy, deputy bureau chief, and the overall supervision of Executive Assistant District Attorney Peter Crusco and Deputy Executive Assistant District Attorney Linda Cantoni of the Investigations Division.