Four defendants were charged Wednesday for their roles in a $2.5 million Home Equity Conversion Mortgage fraud scheme. The U.S. Attorney’s Office for the Southern District of Florida reports that three of the defendants, Louis Gendason, John Incandela, and Marcus Echevarria, worked at 1st Continental Mortgage in Florida as loan officers; the fourth defendant, Kimberly Mackey, worked as a licensed title agent and proprietor of Real Estate One Land Services, Inc., in Pennsylvania.
These individuals allegedly worked together in a scheme to defraud reverse mortgage borrowers, lender Genworth Financial Home Equity Access, Inc., and the Federal Housing Authority (FHA); if convicted, they will each face up to 30 years in prison and fines of up to $1 million.
The three defendants who worked for 1st Continental are charged with soliciting homeowners aged 62 or older to refinance existing home mortgages with reverse mortgages, even if those individuals did not qualify for a reverse mortgage. Gendason allegedly altered home appraisals to inflate the values of the properties so that the seniors would qualify, and these fraudulent appraisals were submitted to Genworth. Genworth subsequently approved the falsified documents, and the FHA insured more than $2,572,813 in unqualified reverse mortgage loans.
Mackey, the fourth defendant, allegedly played a role in the scheme by closing the Genworth loans without paying off the defrauded borrowers’ existing mortgage loans. Then, as the designated closing agent for these loans, Mackey received $2,572,813.19 in loan proceeds from Genworth, of which she funneled $998,086.33 into a bank account controlled by Incandela and Gendason; this money was used by Incandela, Gendason, and Echavarria for personal use, according to the U.S. Attorney’s Office. In order to conceal the fraudulent loan closings, Mackey prepared false HUD-1 settlement documents to the effect that the loans had been closed.
Meanwhile, the unsuspecting homeowners’ original mortgage loans remained open and unpaid, and the defendants allegedly tried to hide the existence of the refinanced reverse mortgage loans from the original mortgage lenders. In order to do this, the 1st Continental employees created fictitious offers for “short sales” on the borrowers’ homes.
U.S. Attorney Wifredo Ferrer, along with several other figures of authority, recently unsealed criminal information relating to the alleged fraud.
“These defendants preyed on senior citizens on fixed and modest incomes. While legitimate loan modifications and reverse mortgages are useful tools to help those who need it, we will remain vigilant to make sure these tools are not misused by those who seek to line their own pockets,” said Ferrer. “We urge potential borrowers to use caution when entrusting their homes and savings to those offering financial alternatives, including loan modifications and reverse mortgages.”
“Combating mortgage fraud is a priority due to the impact of lending and the housing market on the nation’s economy,” said John V. Gillies, Special Agent in Charge for the FBI Miami. “The FBI remains committed to working with our law enforcement partners to routing out this type of fraud.”
Written by Alyssa Gerace