Two Individuals From New York And A Destin Builder Convicted Of Bank Fraud And Money Laundering

Two Individuals From New York And A Destin Builder Convicted Of Bank Fraud And Money Laundering PENSACOLA, FLORIDA – Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced today that Scott F. Smith, 48, of Patchogue, New York, Paula N. Smith, 43, of Patchogue, New York, and Jonathon "David" Sanders, 50, of Santa Rosa Beach, Florida, were convicted by a federal jury of bank fraud and conspiracy to commit money laundering as part of a mortgage fraud scheme on Friday, April 20, 2012. This case was investigated by the Florida Department of Law Enforcement and the State of Florida Office of Financial Regulation-Bureau of Financial Investigations. During the trial, the evidence established that Scott Smith and Paula Smith allowed Paula Smith's brother, Louis R. Mazzella, 41, of Holbrook, New York, to purchase two homes in Scott Smith's name in Santa Rosa Beach and three townhomes in Paula Smith's name in Temple Terrace, Florida. The properties in Santa Rosa Beach were located on May Drive and Cherry Laurel Drive. For the two Santa Rosa Beach properties, mortgage loans were fraudulently obtained from Washington Mutual (WAMU) for $1.3 million for the May Drive home and CitiMortgage for $1 million for the Cherry Laurel Drive home. In 2005, Jonathon "David" Sanders, a general contractor and owner of Seagrove Builders Inc. in Destin, FL, obtained a loan for further than $1.2 million from cash out refinance of two existing mortgage loans on his May Drive home. In late 2007, Sanders was in default by more than $35,000. Facing foreclosure, Sanders entered into a contract to sell his home to Scott Smith for a sales price of $1.862 million. A mortgage loan for $1.3 million was fraudulently obtained from WAMU for Scott Smith to purchase the May Drive home from Sanders. However, instead of paying off his loan, Sanders caused the money to be diverted to entities and individuals other than his mortgage lender. Thereafter, a series of financial transactions occurred, which resulted in Scott Smith, Paula Smith and Sanders profiting. As a result of the conspiracy, Scott and Paula Smith made at least approximately $85,657, in six months. The evidence further showed that Sanders received $100,000 following a series of financial transactions and as such his mortgage was never paid. Scott Smith was convicted of all four counts charged against him in the Indictment which included: Count One – conspiracy to commit bank and mail fraud; Count Two – bank fraud; Count Three – mail fraud; and, Count Four - conspiracy to commit money laundering. Paula Smith was convicted of both charges contained in the Indictment against her, which included: Count One – conspiracy to commit bank and mail fraud; and, Count Four – conspiracy to commit money laundering. Sanders was convicted of the following: Count Two – bank fraud; and, Count Four – conspiracy to commit money laundering. The penalties for every count include the following: Count One - up to thirty years in prison; Count Two – up to thirty years in prison; Count Three – up to twenty years in prison; and, Count Four – up to twenty years in prison. The three are scheduled to be sentenced by Senior U.S. District Judge Lacey A. Collier on July 10, 2012 at 10:30 am. The remaining codefendant, Mazella, pled guilty to all four counts of the indictment and will be sentenced by Senior Judge Collier on June 12, 2012. This prosecution is part of this office's continuing commitment to combat mortgage fraud. Approximately a year ago, a number of prosecutions were announced as part of Operation Stolen Dreams, a sweep that targeted mortgage fraud throughout the country and was the largest collective enforcement effort ever brought to bear in confronting the problem. The operation was organized by the Mortgage Fraud Working Group of President's Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated effort to investigate and prosecute financial crimes. Two Individuals From New York And A Destin Builder Convicted Of Bank Fraud And Money Laundering Trade News selected by Local Linkup on 26/04/2012