Published: Wednesday, Nov. 04, 2009

Updated: Wednesday, Nov. 04, 2009

Mortgage fraud probe nets 105 across state

TAMPA — At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.

Nestor Bryan Rivera Valentin, a loan processor, received two loans totaling $900,000 through fraudulent loan applications he submitted to Lehman Brothers Bank. There were few personal details about Valentin, who apparently lived in Sarasota County.

A federal prosecutor announced at a Tuesday news conference in Tampa that the investigation has resulted in arrests throughout the middle district, which includes Tampa, Orlando, Ocala, Jacksonville and Fort Myers.

Valentin was among 98 cases U.S. Attorney A. Brian Albritton made public Tuesday. Details have not yet been released in seven cases.

Fraudulent loans obtained by the 105 defendants totaled more than $400 million and included more than 700 properties. The defendants, Albritton said, included industry insiders such as mortgage brokers, loan processors, Realtors and underwriters.

“Unfortunately, a significant amount of the mortgage loans that supported Florida’s growth during the recent boom market were in fact obtained through fraudulent means,” Albritton said. “Florida is ground zero for mortgage fraud.”

Florida ranked second for mortgage fraud reports in 2008, and was No. 1 in 2006 and 2007, Albritton said.

“There is no comparison to other years,” Albritton said of the recent surge in mortgage fraud cases. Before the real estate boom, Albritton estimated Florida would have less than 10 cases in a typical year.

In Valentin’s case, the loan processor lied about his Sarasota residence and falsely stated he was employed at Bradenton’s Tandem Staffing Solutions as a regional manager, according to court documents.

Valentin falsely stated his monthly income was $21,901 to deceive Lehman Brothers Bank into providing two loans totaling $900,000 on a property in Apollo Beach. A sales contract stated the seller would receive $308,988 from the sale of the Apollo Beach home. Instead, the seller only received $83,988.

Valentin had Lehman Brothers Bank wire transfer the loans to his bank in Sarasota, and two days after the closing on the Apollo Beach property, $225,000 was transferred from One Stop Title to Valentin.

Court records state Valentin use a portion of the money to finance cosmetic surgery for his girlfriend Linda Rico.

The FBI found Valentin falsified his employment with Tandem Solutions, now known as Select Staffing by issuing a subpoena for all employment records regarding Valentin.

Select Staffing had no records indicating Valentin ever worked for Tandem Solutions.

The FBI also interviewed a manager at the company, who said she didn’t recall Valentin ever working at Tandem. She reviewed two pay stubs Valentin used on his loan applications. The pay stubs listed a different payroll processor than the one used by Tandem. Valentin’s case is one of 30 defendants charged in the Tampa district as a result of the mortgage fraud investigation federal officials started in January. The 30 Tampa defendants obtained more than $103 million in loans and involved 313 properties.

“We have all seen and many of us have personally experience the negative impact mortgage fraud has had on our economy not only in the U.S. but also here in Florida and Central Florida,” said Steve Ibison, special agent in charge for the FBI. “This is by no means the first financial crisis we have had nor will it be the first instance of bad judgment or just uncontrollable greed that we have experienced here in Central Florida.”

Officials said the investigation is continuing.