Two Indicted in Sweeping Mortgage Fraud Investigations
PROVIDENCE, R.I. – A 14-count federal indictment filed in U.S. District Court in Providence charges two individuals, Hasan Hussain, 55, of Princeton, N.J., and Ricardo Abreu, 50, of Cranston, R.I., with allegedly participating in a conspiracy to defraud financial institutions, investors and financially distressed homeowners of at least 14 properties in Providence, Pawtucket and Cranston of fees, rental income, mortgage payment funds, property ownership and/or proceeds from the sale of their properties.
United States Attorney Peter F. Neronha announced today that this indictment represents the latest charges brought in a wide-ranging series of on-going federal criminal investigations into mortgage fraud in Rhode Island. The investigations are being conducted by the United States Attorney’s Office, the FBI, the U.S. Department of Housing and Urban Development Office of Inspector General, the U.S. Secret Service and the Rhode Island State Police Financial Crimes Unit.
To date, 10 individuals have been charged in U.S. District Court in Providence.
United States Attorney Peter F. Neronha commented, “Today’s defendants join their cohorts in facing charges for allegedly manipulating the mortgage lending process in a whole variety of ways. As alleged in the Indictment, the defendants used more than a dozen properties to advance their scheme to defraud, and in some instances, used a single property to defraud and victimize multiple people and entities. As alleged, their creativity was exceeded only by their greed, but their scheme, however complicated, has now been unraveled by law enforcement. The kind of schemes alleged here raise the cost of mortgage lending for all Rhode Islanders, and are therefore deserving of our most concerted law enforcement efforts.”
Joining United States Attorney Peter F. Neronha in announcing an indictment which charges Hasan Hussain with one (1) count of conspiracy, five (5) counts of wire fraud and eight (8) counts of aggravated identity theft; and Ricard Abreu with one (1) count of conspiracy and two (2) counts of wire fraud are Harold H. Shaw, Special Agent in Charge of the Boston Division of the FBI; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General; Brian Deck, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; and Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police.
It is alleged that Hasan Hussain, through his various enterprises, with the assistance of employee and co-conspirator Ricardo Abreu, offered distressed homeowners loan modification, property management and property short sales services for a fee. Instead, it is alleged, the defendants conspired to fraudulently steal those funds, and to acquire and sell at least fourteen properties owned by distressed homeowners, many of whom are not fluent in English.
It is alleged that as part of the scheme, Hussain instructed distressed homeowners to vacate their properties while he worked to acquire loan modifications or short sales on their behalf. After taking control of the properties, Hussain not only pocketed fees and mortgage payments provided by the homeowners, he rented out some of the properties and pocketed rental payments without the owners’ knowledge.
It is also alleged that as part of the scheme, Hussain and Abreu acquired the properties in short sales and then solicited investors to purchase these properties at much higher prices thereby earning substantial profit. It is alleged that Abreu and others damaged the properties in order to reduce their appraised value prior to a bank inspection. Investors were promised investment opportunities that would require no down payment. It is alleged that the defendants caused false mortgage applications and other documentation to be filed to lending institutions for conventional bank and FHA mortgage loans for the buyers. Some of the documentation contained the names and personal identifying information of individuals who were unaware that their information was being used.
Hasan Hussain is scheduled to be arraigned in U.S. District Court on January 27, 2016. Ricardo Abreu was arraigned before U.S. District Court Magistrate Judge Patricia A. Sullivan on January 20, 2017, and released on unsecured bond.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Other cases charged in federal court as a result of the mortgage fraud investigations include:
- A 22-count federal indictment returned in December 2015, which alleged that between 2007 and 2014, a Rhode Island real estate attorney, a real estate agent, a licensed loan originator, a former loan officer, a loan processor and a real estate investor, conspired to execute a scheme which caused prospective homebuyers to obtain mortgages from financial institutions based upon materially false loan applications and fraudulent supporting documentation. It was also alleged that as part of the conspiracy, false representations were made in order to obtain fees to which the defendants were not entitled or to make a profit selling property in which they had an ownership interest. It was further alleged that, in some instances, thousands of dollars were fraudulently obtained by misrepresenting on a Housing and Urban Development form the amount of funds due or to be paid to parties involved in a transaction;
- In September 2015, a former mortgage loan originator was convicted of conspiracy to commit bank fraud by participating in a scheme to defraud Flagstar Bank, by filing a fraudulent mortgage loan application and supporting documentation in the name of a person known to be deceased; and
- In July 2015, a real estate appraiser whose licensed had expired, but who continued to conduct and issue real estate appraisals using the identity, license and insurance certificate of two licensed appraisers without his permission or knowledge, was convicted of making false statements on a loan application.
The cases are being prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and William J. Ferland.