A 48-year-old mortgage expert found himself in a new home – a jail cell – after being charged with swindling $20 million from banks during bogus home purchases.
According to a complaint filed in Brooklyn Federal Court last Thursday, defendant’s Osmond Decoteau’s plan was so intricate and involved that the banks never had a clue that the people they were giving loans to would never pay them back.
To add insult to injury, banks ended up paying Decoteau directly by sending checks to loan servicer companies that he controlled.
Traditionally, mortgage lenders employ loan servicers to collect monthly mortgage loan payments from homeowners and remit the payments to the lender in exchange for a monthly fee.
When a property is sold or a mortgage is refinanced, the lender issuing a new loan typically wires the proceeds to the closing attorney, who in turn sends a portion of the proceeds to a loan servicer to pay off any pre-existing mortgage liens on the home.
Federal officials charge that Decoteau not only found straw purchasers for both a property in Brooklyn and in Florida and then trumped up their backgrounds, credit scores and financial condition to make them look like good investments, but also created several loan servicer operations claiming to have liens on these homes.
When closings were held on these homes, Decoteau raked in thousands upon thousands in “payoff checks” to these servicer companies while the real loan servicers on the homes received nothing.
He also kept up the charade by making sure that the people who purchased the homes made the first few payments so they wouldn’t go delinquent – at least for the first few months.
Federal authorities allege that Decoteau swindled his way through several fraudulent closings between April 2005 and January 2007.
When the scam was finally unveiled, both properties had two first-lien mortgages on them, officials said.
Federal officials said that Decateau’s case was investigated by a special task force set up to investigate cases of mortgage fraud.
“In May of this year we announced the formation of a task force comprised of federal, state, and local law-enforcement agents and investigators to address the burgeoning problem of mortgage fraud,” explained United States Attorney Benton Campbell. “This prosecution is one example of the results of that cooperative initiative, which includes the investigation and prosecution of mortgage fraud that has harmed investors, lenders, and homeowners across the country.”
“Combating mortgage fraud is a priority because mortgage lending and the housing market have a significant overall effect on the nation’s economy,” added FBI Assistant Director-in-Charge Mershon in a statement. “We’re committed to investigating and prosecuting criminals who exploit vulnerabilities and devise new methods or schemes to defraud.”
If convicted, Decoteau could face up to 20 years in prison.
Barking up the wrong
A man who claimed he was falsely arrested and then assaulted by police officers in East Flatbush will not get his day in Supreme Court, a judge ruled this week.
According to recently filed court papers, petitioner Daniel Black motioned to make a late notice of claim against the city of New York in regards to the June 2007 attack.
Black alleged that he was near the corner of Rogers Avenue and Avenue D when he was unlawfully searched, falsely arrested and then assaulted by police.
Black plans to sue the city for violating his civil rights.
Yet state law stipulates that if he wanted to sue the city, he should have filed a notice of claim by October 2007.
He didn’t and instead came to court this summer looking for an extension, alleging that he thought he had made his claim through the Civilian Complaint Review Board (CCRB), which investigates police misconduct cases.
CCRB records do show that Black filed a complaint with them and that they had substantiated his allegations.
Yet, filing a claim with the CCRB is not the same as filing one with the state courts, Black soon learned.
“The court holds that where (Black), without any excuse for his delay, seeks leave to file a late Notice of Claim one year and 12 days after the incident occurred and 10 months after the ninety day statutory period expired and where, as here, (Black) has failed to demonstrate lack of prejudice to the city, he may not rely on the filing of the complaint with the CCRB to impute knowledge to the city of the facts of the claim,” wrote Judge Robert J. Miller as he denied the motion.
Miller did, however, say that Black could take his complaint to federal court, since there are no statute of limitations on federal civil rights claim.