Seven Florida residents have been arrested on multiple charges in a mortgage fraud scheme involving a development in North Carolina. The defendants are being accused of using fraudulent loan applications to get construction mortgages. The loans were valued at almost $50 million and were made by Bank of America, SunTrust, Wachovia, and Regions Bank. Each of the defendants face a maximum sentence of 30 years in prison and $1 million fine.
Seven Florida residents have been arrested on multiple charges in a $49.6 million mortgage fraud scheme. The 15-count federal indictment includes the charges of conspiracy to commit bank fraud and wire fraud. Among those accused are Domenic Rabuffo, 77, of Miami and his former wife, Mae Rabuffo, 74, of Fort Lauderdale; Raymond E. Olivier, 52, of Land O’Lakes; and Curtis Allen Davis, 51 of Tampa. It is alleged that the accused used shell companies and straw buyers to purchase lots in a development called Hampton Springs, which is located in Cashiers, North Carolina.
Mortgage fraud usually involves multiple parties and a scheme to intentionally defraud a federally insured financial institution, such as a bank in this situation, in real estate transactions. There can be a large number of parties involved with a mortgage fraud scheme including the buyer of the property, the seller of the property, investors, mortgage brokers, or the loan officers involved.
The defendants listed above are accused of working together with SunTrust loan officer Victor Miguel Vidal, 48, of Miami in using fraudulent loan applications to get construction mortgages valued at approximately $50 million. Vidal is allegedly responsible of helping guide the loan applications through the various banks. SunTrust fired the loan officer once the scheme had been discovered.
Rabuffo was the buyer of the property; he put a majority of the property in his ex-wife’s name. Rabuffo had previously served prison time and subsequently became a federal informant in a mortgage fraud case in New York in the 1990s. Rabuffo and Vidal are both being held in federal custody pending a hearing next week; all the other defendants have been released on bond.
The other defendants indicted were accused of participating in the overall scheme. Some of the activities include recruiting straw buyers to submit false loan applications to buy lots in the development and furnishing faulty accountant letters to support the mortgage applications.
All of the defendants involved face a maximum sentence of 30 years in prison and $1 million fine.
Source: Tampa Bay Times, “7 Florida residents charged in connection to North Carolina mortgage fraud scheme,” Lucy Morgan, January 10, 2014