A four-week jury trial ended last Friday in Denver, indicting three people for wire fraud, bank fraud and money laundering.
According to court records, the defendants; Michael Jacoby, 44, of Castle Rock, Derek Zar, 30, of Commerce City and Susanne Zar, 58, of Frederick devised a scheme to defraud various financial institutions and lenders by buying other properties under false and fraudulent pretenses. One of the defendants participated in 18 real estate transactions involving Colorado property.
All three were found guilty after an investigation by special agents with the Federal Bureau of Investigation, the IRS-Criminal Investigation, and the U.S. Attorney’s Office.
The defendants had devised a scheme to buy Colorado homes by fraudulent and false means.
Jacoby was found guilty of 11 counts of wire fraud, three counts of money laundering and two counts of bank fraud. Derek Zar was found guilty of four counts of wire fraud and one count of money laundering and Suzanne Zar was found guilty of three counts of wire fraud and one count of money laundering. Another person involved, Michael Macy of Commerce City pled guilty to one count of wire fraud last year. Sentencing for the defendants is scheduled December 10, 2012.
Wire fraud carries a penalty of not more than 20 years imprisonment and up to a $250,000. fine for each count. Bank fraud penalty is not more than 30 years’ imprisonment and a fine up to $1,000,000. for each count. Engaging in monetary transaction in property derived from a wire fraud penalty is not more than 10 years’ imprisonment and up to a $250,000. per count fine.
Part of their scheme involved Derek and a co-defendant buying homes at discounted rates by buying some of the homes with cash. In many of the transactions, Jacoby lent the cash to Derek. Derek would actually buy the home and then repay Jacoby back with interest.
Jacoby would also act as the realtor for the sales. Derek and a co-defendant, in most of the sales, bought the homes through a Limited Liability Companies (LLC) they owned and operated. They would resell the homes quickly to themselves, as individuals, at inflated prices – financed by mortgage loans.
Most of the real estate transactions involved inflated prices of the homes. Jacoby usually recommended an appraiser to the mortgage broker for the loan approval. He would give the appraiser highly inflated values of comparable homes and omit information on home sales so the appraiser would overvalue the home.
At the closing, through a grant program, the defendants would funnel money back to the homebuyer who was one of the defendants. Basically, the homebuyer was receiving a kickback for buying the home.
Colorado was named the second highest state for mortgage fraud based on fraud reported on loan originations according to the LexisNexis’ Mortgage Industry Data Exchange Index (MIDEX). New Jersey ranked number one. Florida, Michigan, California, Illinois, New York, Pennsylvania, Virginia and Texas round out the rest in the top ten.
Keith A. Gantenbein, Jr. is a foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.