Two co-conspirators in a mortgage fraud ring that schemed $9 million from lenders and involved 200 properties were each sentenced for their roles in the scheme. David Fein, U.S. attorney for the District of Connecticut, announced that Rosa Garcia, 37, and Michael Hodges, 53, each of New London, Conn. were sentenced today by Senior U.S. District Judge Alfred Covello.
Garcia was sentenced to 14 months of probation, all of which Garcia must serve in home confinement. Judge Covello also ordered Garcia to pay restitution in the amount of $1,663,149.69.
Hodges was sentenced to 18 months of imprisonment, followed by two years of supervised release, for his participation in an eastern Connecticut mortgage fraud scheme. Hodges also was ordered to forfeit $25,000 and to pay restitution in the amount of $328,516.31.
According to court documents and statements made in court, from approximately 2004 to 2007, Jose Guzman and others used mortgage brokerage, property management, and home improvement companies to arrange for individuals (“borrowers”) to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications. The fraudulent information included information regarding income, assets, employment, rent history, as well as the borrowers’ intention to make the properties their primary residence. The borrowers were compensated for participating in the scheme.
According to previously filed court documents, the government believes that more than 200 fraudulent mortgages were funded through this mortgage fraud scheme, causing more than $9 million in losses to lenders.
Garcia was an employee of Guzman’s real estate, mortgage brokerage, and property management businesses, and she aided Guzman and his partners in the buying and selling of properties. During the conspiracy, Garcia assisted in the preparation and submission of fraudulent closing documentation to lenders, including verification of rent, verification of deposits, and verification of employment. Also, when Garcia was called by lenders seeking to verify the information contained in the submitted documents, she would confirm the false information.
On May 17, 2010, Garcia pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.
Hodges, who was unemployed at the time, acted as a buyer in connection with Guzman’s purchase of one property in New London in 2006 and one property in Norwich in 2007. Hodges also referred individuals to Guzman to act as buyers and identified properties to be bought and sold as part of the conspiracy. Hodges received $5,000 both times he acted as a buyer and additional compensation when he identified a buyer or a property to be bought and sold.
Hodges pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud on Oct. 12, 2011.
Fourteen other individuals, including Guzman, have been convicted of various charges stemming from this scheme. Guzman awaits sentencing.
This matter has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development-Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Michael McGarry and David Huang.