A U.S. district judge sentenced three Miami real estate developers to prison Wednesday for their roles in a $27.8 million mortgage fraud scheme, officials said.Stavroula Mendez, 68, was sentenced to 11 years and three months in prison; Lazaro Mendez, 42, was sentenced to nine years; and Marie Mendez, 49, was sentenced to four years and nine months.
The scheme caused the Federal Housing Administration, Freddie Mac, Fannie Mae and private lenders to sustain combined losses of $27.8 million.
Judge Patricia A. Seitz also ordered each of the defendants to forfeit $35.2 million in fraudulent proceeds and to pay $21.2 million in restitution.
In November, all three defendants were convicted of wire fraud, bank fraud and conspiracy. Eleven other co-conspirators were previously convicted of fraud in connection with the scheme.
Stavroula Mendez, Lazaro Mendez and Marie Mendez owned, controlled or managed condominium developments in the Miami area, officials said.
According to evidence presented at trial, the defendants engaged in a scheme in which they facilitated payments to straw buyers as well as the submission of false loan applications on behalf of the straw buyers to secure mortgages to purchase units in the developments.
Once the units were sold, the defendants retained both the profits from the sales and control over the units.
The trial evidence showed that Lazaro Mendez recruited family members and others to be straw buyers of units that he controlled at one development and that he facilitated the submission of false loan applications.
In addition, Lazaro Mendez enlisted mortgage brokers and another individual to recruit straw buyers and to assist them in obtaining fraudulent loans. Lazaro Mendez received kickbacks for each referred buyer.
After units were sold at a development that Stavroula Mendez and her husband controlled, trial evidence indicated that Stavroula Mendez funneled a portion of the loan proceeds to shell companies to pay the straw buyers’ closing cash obligations and mortgage payments.
In 2008 and 2009, the evidence indicated that Stavroula Mendez used other shell companies to divert more than $2 million of the fraudulent proceeds to bank accounts in Switzerland and Liechtenstein.
Marie Mendez used rental payments received by the conspirators to make mortgage payments, and directed cash to another individual to make mortgage payments on behalf of straw buyers.
Marie Mendez submitted fraudulent loan applications for three condominium units that were purchased in her name, according to the evidence.
Eventually, the defendants and their co-conspirators were unable to make mortgage payments, which caused dozens of condominium units to go into foreclosure, the evidence showed.