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Florida Attorney General's Office Files Mortgage Fraud Suit

Tribune photo by COLIN HACKLEY

Attorney General Bill McCollum explains a mortgage fraud lawsuit filed against 10 companies and 15 individuals.

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TBO.com

Published: September 18, 2008

Updated: 09/18/2008 03:13 pm

TAMPA - The Florida Attorney General's Office has sued 10 companies and 15 individuals for roles they may have played in a $37 million mortgage fraud scheme that involved 60 homes from Orange County to Pinellas County.

According to the lawsuit filed Wednesday in Orlando, the defendants fraudulently obtained mortgages and then siphoned off more than $6 million that was funneled to shell companies at closing. Fifty of the homes have fallen into foreclosure.

"In this particular situation, the economy is the victim," Attorney General Bill McCollum said today. "This group of individuals systematically defrauded banks and mortgage lenders, stealing millions for their own personal use and leaving a gaping hole in the system."

Starting in July 2005 and continuing through at least January 2007, three of the group's leaders defrauded lenders by recruiting "straw buyers" with good credit and using them to create false applications to buy homes throughout Central Florida, the suit states.

IndyMac Bank and New Century Mortgage are listed in the filing as being among banks affected by the scheme. Both institutions have failed.

Key to the scheme, according to the lawsuit, were real estate agents willing to inflate asking prices so the defendants could obtain larger loans. The suit does not name two of the agents as defendants, though, because real estate agents are exempt from the Florida Deceptive and Unfair Trade Practices Act, the law the defendants are accused of violating. A third agent, the suit states, also acted as a straw buyer.

The lawsuit seeks to halt the practices and seeks damages for those who were targeted by their actions. Civil penalties of $10,000 per violation of the trade practices act also are being sought.
No criminal charges have been filed, but Ellen Wilcox, an investigator with the Florida Department of Law Enforcement, said it is investigating.

The state's civil lawsuit names American Heritage Mortgage Group Inc., Security One Mortgage Corp., Security Trust Title LLC, Trincity Trucking Inc., E. Brooke Co. LLC, Longdenville Investment & Management Inc., American Heritage Commercial Capital, P&R Funding Corp., Steele Property Investments Inc., 1st Capital Mortgage Associates Inc., Allen Boyarsky, Stephen Mahadeo, Bethann Schuldiner, Anthony Didonato, Steve Groden, Brad Frank Groden, Heather Showalter, Jeanette Lugo, Magdalene Williams, Norma Lopez, Kenneth West, Marcus Habeeb, Luis Delgado, Aziz Mohammed and Betty Bedeau.

McCollum said his office has not served all the defendants with the suit and that some might have gone to Trinidad, where some of the stolen money was stashed in accounts.

Tampa real estate agent Lori Polin was one of three agents mentioned in the lawsuit but is not a defendant McCollum said she helped the defendants with some of their first deals. Polin, who now works for ReMax in Tampa, was the first agent to help orchestrate the deals, the suit states. At the time, she worked for a ReMax office in Clearwater. She persuaded sellers to increase their asking prices by several thousand dollars and earned about $165,250 in real estate commissions on eight sales, according to the suit.

Polin, reached by telephone today in her Tampa office, said, "I'll have to say no comment at this time."

The other two agents mentioned in the suit are Dawn St. Hillaire of Lake County and Heather Showalter of Pinellas County. Although mentioned in the suit, Hillaire is not a defendant.

The suit alleges that Hillaire represented sellers in five transactions and received $148,346 in real estate commissions.

Hillaire, who worked for ERA New Fischer Realty & Investments until she left for nursing school three months ago, said she was stunned by the suit. She said she did work with Boyarsky, who was a mortgage broker, but she never inflated prices on sales and didn't know of anything Boyarsky had done wrong.

"This is the first I'm hearing about this," Hillaire said. "I had no idea that my name was wrapped up in something like this. I never got any kickbacks. I have nothing to hide."

Showalter was named as a defendant in the suit for her role as a buyer. She represented sellers in eight deals and acted as a straw buyer in four deals, the suit states. She was paid $112,958 in commissions and extra for her role as a buyer, according to the suit. Showalter could not be reached for comment.

Information from The Associated Press was used in this report. Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.

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