FLORIDA
The owner of a Florida mortgage company was sentenced today to 11 years and three months in prison for orchestrating a $64 million mortgage fraud scheme, officials announced.
Two associates also sentenced for their roles in the conspiracy, according to authorities.
Hector Hernandez, 57, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers (Great Country), a mortgage lender in Miami, was sentenced for conspiracy to commit wire fraud affecting a financial institution, officials said.
Officials said he was also ordered to pay $64,508,141 in restitution and to forfeit $8 million in illicit profits.
In the same case, a real estate developer for Great Country, Aleida Fontao, 62, of Miami, was sentenced today to serve three years and five months in prison, and ordered to pay $7.1 million in restitution and $400,000 in forfeiture.
An underwriter for Great Country, Olga Hernandez, 59, of Lake Mary, Florida, was sentenced yesterday to serve four years and three months in prison and ordered to pay $24.5 million in restitution.
Hector and Olga Hernandez both pleaded guilty on July 13, while Fontao pleaded guilty on July 7.
Hector Hernandez was the last defendant to be sentenced in the case, according to officials.
All 24 defendants charged in this case, which included loan officers, loan processors and underwriters, were convicted of participating in the scheme.
According to admissions made in connection with the guilty pleas, here are the facts:
- From at least 2006 and continuing through at least September 2008, Hector Hernandez was the owner and operator of Great Country which specialized in approving Federal Housing Administration or FHA loans.
- The loans were primarily for buyers of condominiums at complexes where Hector Hernandez was a part owner – however, the buyers were unqualified borrowers, due to insufficient income, high levels of debts, and outstanding collections.
- Hector Hernandez admitted that his company employed loan officers, loan processors and underwriters, including Olga Hernandez and Fontao, whom he knew approved and submitted false and fraudulent FHA mortgage loan applications and accompanying documents to HUD on behalf of the unqualified borrowers.
- These documents included false pay stubs, false verification of employment forms, and fictitious letters from the borrowers.
- According to admissions made in connection with the guilty pleas, closing costs were paid on behalf of the unqualified borrowers through an interstate wire transfer of funds.
- The borrowers were also paid to purchase the condominium units as an unreported inducement to purchase.
- After the loans closed, the loans were sold to financial institutions, officials said.
- When the unqualified borrowers failed to meet their monthly mortgage obligations, they defaulted on the loans causing losses both to the financial institutions and to HUD which insured the loans, according to officials.
- Hector Hernandez admitted that the loss from the fraudulent conduct was at least $64 million.