Financial Fraud: Robert Pena Was Indicted On Conspiracy And Wire Fraud Charges

Mortgage Fraud
Mortgage Fraud

Mortgage Company President Charged with Defrauding Ginnie Mae

BOSTON – The president and founder of a Falmouth mortgage company was charged in U.S. District Court in Boston in connection with defrauding the Government National Mortgage Association (Ginnie Mae) out of nearly $3 million.

Robert Pena, 67, the president and founder of the now-defunct mortgage company, Mortgage Security, Inc. (MSI), was indicted on conspiracy and wire fraud charges.  Pena was arrested today and will appear in before U.S. District Court Magistrate Judge Marianne B. Bowler this afternoon.

The charges arise out of Pena’s alleged scheme to defraud Ginnie Mae, the government-run corporation which makes housing more affordable by injecting capital into the U.S. housing market.  Ginnie Mae guarantees the timely payment of principal and interest to investors in bonds backed by government-sponsored mortgage loans, such as those offered by the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA).

According to court documents, MSI was contracted with Ginnie Mae to pool eligible residential mortgage loans and then sell Ginnie Mae-backed mortgage bonds to investors.  MSI was responsible for servicing the loans in the pools it created, including collecting principal and interest payments from borrowers, as well as loan payoffs, and placing those funds into accounts held in trust by Ginnie Mae, which would ultimately pass them along to investors.  Among other things, Ginnie Mae required issuers like MSI to provide regular reports to Ginnie Mae concerning the status of the loans in the pools.

According to the indictment, beginning in 2011, Pena began diverting money that borrowers were sending to MSI.  Specifically, he is alleged to have deposited large-dollar, loan-payoff checks into secret accounts unknown to Ginnie Mae and then using those funds for his own personal and business uses.  Pena also diverted borrowers’ escrow funds and mortgage-insurance premiums for his own use.  In total, Pena took nearly $3 million, which Ginnie Mae then had to pay the investors whose investments it had guaranteed.  Pena also attempted to cover up his scheme by providing false reports to Ginnie Mae about the status of the loans MSI was servicing.

The charge of conspiracy provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.  The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The U.S. Attorney’s Office wishes to acknowledge the invaluable assistance of the U.S. Department of Veterans Affairs, Office of Inspector General, the U.S. Department of Agriculture, Office of Inspector General and the Falmouth Police Department.  The case is being prosecuted by Assistant U.S. Attorneys Eric P. Christofferson and Brian LaMacchia of Ortiz’s Economic Crimes Unit and Civil Division, respectively.

The details contained in the indictment are allegations.  The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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