New York’s attorney general and banking superintendent today announced an 83-count indictment against an alleged massive mortgage fraud ring called the “Sandella Group” that has operated for several years in Brooklyn, Queens and Suffolk County.
The indictment alleges the enterprise was led by Louis Sandella and also involved his brother, Michael Sandella; Danielle Moss Fontanez; and five others, including two real estate lawyers – Gary S. Shaw and Ida D’Angelo.
The following individuals are being arraigned today, the agencies announced:
Louis Sandella, 43, of Commack; Michael Sandella, 41, of Hauppauge; Danielle Moss, 36, of, Commack; Kim Moss Fontanez, 33, of Lindenhurst; Geraldine Moss, 60, of West Babylon; Gary Shaw, 68, of Northport; and Ida D’Angelo, 38, of Dix Hills, N.Y. One defendant, Andreas Perdikos, 41, of New Jersey, remains at large.
The charges included in the indictment are: Criminal enterprise; grand larceny in the first and second degrees; scheme to defraud in the first degree; and falsifying business records in the first degree. If convicted of the top count, the alleged participants face prison sentences of up to 25 years.
Attorney General Eliot Spitzer also announced the filing of a civil forfeiture action seeking the recovery of more than $8 million from the alleged mortgage fraud ring.
According to the indictment, unsealed today in Kings County Supreme Court, members of the Sandella enterprise stole millions of dollars from banks and other financial institutions by submitting false and forged documents to secure mortgage loans.
The Sandella Group allegedly paid people to pose as legitimate real estate buyers. False information about these straw buyers’ employment, income and financial assets were provided to the banks to obtain the loans. The banks were also provided false real estate appraisal reports that often misrepresented the physical conditions of the properties, the market value of comparable properties and the identities of the individuals who prepared the reports. Through these reports, prepared by a member of the Sandella Enterprise, the value of individual properties used in the fraudulent mortgage transactions were inflated by $100,000 or more, according to the indictment.
The Attorney General’s Office investigation of the alleged mortgage fraud ring began in 2002, based upon intelligence developed by his Organized Crime Task Force and his Civil Rights Bureau and information from other law enforcement agencies, according to the report.
The state Banking Department, Insurance Department, the FBI, U.S. Department of Labor and the Waterfront Police also contributed resources to the investigation.
“For the average American, buying a home is their most important investment,” Spitzer said in a statement. The alleged scams, he said, “not only harmed targeted individuals and lending institutions, but had the potential to undermine the housing market in the neighborhoods where they practiced their scheme. Protecting New York’s real estate market from this kind of fraud must be a priority for all of law enforcement.”
New York State Banking Superintendent Diana L. Taylor said in a statement that the alleged criminal network robbed “hard-working New Yorkers and banks of equity and confidence in what should be an honest, law-abiding, professional industry. We will continue to work closely with law enforcement to protect the interests of New Yorkers, the health of our communities and the safety and soundness of our financial institutions.”
The ultimate financial losers were the financial institutions, which provided the mortgage loans based on fraudulent applications, according to the agencies’ announcement.
The indictment cited an example of a home sale in Flatbush, Brooklyn, in 2004 that was allegedly linked to the Sandella enterprise. “Although the true purchase price of the property was $310,000, the Sandella Group falsely told the bank that the purchase price was $450,000, and applied to the bank for a loan in that amount. The criminal enterprise gave the bank false information about the financial condition of a ‘straw buyer’ that it recruited as a front man in the transaction, and submitted a forged appraisal report. The group then pocketed the bulk of the inflated amount, and allowed the loan to go into default,” according to a description of the indictment.
Assistant deputy attorneys General Sean Courtney, Peter Zanolin and Robert Biancavilla of the Organized Crime Task Force are prosecuting the case under the direction of J. Christopher Prather, the head of the task force.