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Prosecutors allege mortgage fraud in cases filed here

Rochester Business Journal
January 17, 2014

A group of New York City-based mortgage fraudsters submitted fake documents to Rochester-based lender Flaherty Funding Corp. to improperly obtain $1.98 million in loans on New York City-area properties, federal prosecutors charge in several cases filed locally.

Queens mortgage broker Sean Ola-Ojo, also known as Segun Segsy Ola-Ojo, is named by prosecutors as a key member of the alleged mortgage-fraud ring.

After making a deal with prosecutors, Ola-Ojo pleaded guilty in U.S. District Court in Rochester last week to a single count of structuring transactions to avoid reporting requirements.

The ring first came under federal law enforcement scrutiny some five years ago. Cases against other alleged ring members are wending their way separately through the local federal court.

Ola-Ojo agreed in a plea deal filed with the court to provide information on his alleged co-conspirators’ criminal activities and to testify against them in court and grand jury proceedings.

Court papers describe the ring as arranging fraudulent loans from Flaherty Funding and other unidentified lenders over some five months in 2008.

The fraud began after Flaherty Funding contacted Vista Mortgage in hopes of expanding its geographic reach, postal inspector Michelle Mann states in an affidavit filed in a related case. The FBI and the U.S. Postal Service worked jointly on the case.

An indictment handed up in June 2012 charged Ola-Ojo, a vice president of Vista Mortgage Associates in Queens, with nine criminal counts of mail fraud and wire fraud.

The single count he pleaded guilty to under a deal with prosecutors carries a maximum penalty of five years in prison, followed by three years’ supervised release and a fine of up to $250,000. His final sentence is in the hands of U.S. District Judge David Larimer, and no sentencing date has been set.

Ola-Ojo states in the Jan. 9 plea agreement that he joined the scheme after being approached by three individuals who planned the mortgage fraud. Two of the three, Angelo Louissaint and Jennifer Johnson, are charged in the same indictment.

The third alleged fraudster, Merrick Henry, is separately charged in a case that has been in the Rochester federal court since 2009.

According to Ola-Ojo’s indictment, the fraud ring concocted fake documents including W-2 forms and employment histories, and fabricated records attesting to fictitious income and assets that helped the straw buyers obtain loans from Flaherty Funding.

The indictment details loans obtained in the phony buyers’ names on four properties in Brooklyn and Queens and one on Long Island.

In a Jan. 9 statement, Assistant U.S. Attorney John Field of the Rochester office said the ring arranged purchases of the properties at “substantially inflated” prices in the mid- to high six figures.

Shills recruited to pretend to be buyers of properties were paid for their part in the scheme, while Ola-Ojo and other ring members split the loan proceeds, court papers state.

In papers filed in the 2010 case against Henry, prosecutors allege that he paid a shill $10,000 to put her name on a mortgage application. Based on the fake documents Henry and others supplied, Flaherty Funding wrote a $533,000 loan for the property, the papers state.

Acting as independent contractors, two of the three alleged co-conspirators, Johnson and Louissaint, lined up phony buyers for Vista Mortgage, court documents allege.

Johnson is charged with seven counts of wire and mail fraud; Louissaint faces nine counts.

The case against both of Ola-Ojo’s alleged co-conspirators is ongoing.

Court records show that Johnson was arrested in Brooklyn last August and released on her own recognizance after posting a $50,000 bond. Her attorney has several times asked for and been granted extra time to prepare her defense.

Court records do not detail any action specific to Louissaint after the indictment’s unsealing in June 2012. He fled to Haiti and remains at large, said Barbara Burns, spokeswoman for the U.S. Attorney’s Office in the Western District of New York.

That indictment identifies Henry of New York City as the third organizer of the Flaherty Funding mortgage fraud but brings no charges against him. Henry is separately fighting criminal charges in a related case filed in the Rochester federal court in 2009.

The most recent item in that case’s docket is a 2011 entry noting that Larimer gave Henry permission to travel to Jamaica on the condition that he surrender his passport upon his return.

Henry has entered a guilty plea but is not yet sentenced, Burns said.

Also identified as a member of the ring in the Ola-Ojo indictment is Sonya Nelson. The indictment describes Nelson as an employee of a New York City payroll firm who created fake W-2 forms and other phony documents to bolster shills’ credentials as legitimate buyers.

Court records show that Nelson was charged with a single count of criminal fraud in 2012 and that she waived indictment and pleaded guilty. No specific date was set for her sentencing. Court records detail no sentence handed down so far.

1/17/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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