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14 indicted for mortgage fraud in Sarasota

SARASOTA -- The six properties pictured at the Sarasota County Sheriff’s Office on Friday could have easily been dream homes.

The homes feature staircases that lead up to grand entrance ways with double doors framed by columns and elongated windows.

Several of them are Mediterranean style, sit waterfront and behold overflowing palm trees in the front yard with second-floor balconies.

They once represented the luxury real estate market of Florida.

Instead, the six homes showcased on a poster board at a news conference Friday are among 22 residential properties that have been or are now tangled up in foreclosure proceedings as a result of a large-scale mortgage fraud conspiracy.

Sarasota County Sheriff Tom Knight, flanked by state and federal agents, announced 14 people, including two from Bradenton, have been charged with participating in a large-scale mortgage fraud case that spanned more than 10 years.

The fraudulent activities involved 22 residential properties in Sarasota, involving more than $47 million in loans. They were likely added fuel to the housing bust.

“On some accounts these cases drove up housing prices and tax bills and they may have contributed to the rush of foreclosures in the real estate market,” Knight said. “The activity made key players rich while the banks, citizens and others suffered consequences.”

The Bradenton residents charged in the case were Jeffrey T. Berghorn, 46, who bought and sold homes in Sarasota through two others charged in the case.

And, Lisa R. Rotolo, 47, of Bradenton, who was a title agent and owner of Diamond Title, located in Sarasota, where she worked alongside another defendant listed in the 91-page indictment.

“The indictment itself is a substantial indictment, said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “It also involves asset forfeiture.”

And, as federal court records show, Friday’s announcement may only be the tip of the iceberg.

According to records, a confidential informant approached the FBI in May 2008 to expose the fraud ring. The informant said he or she participated in more than 80 fraudulent mortgage transactions in the Sarasota area between January 2001 and April 2007, with the properties valued at more than $200 million.

Of those, the informant said Rotolo was the Bradenton title officer involved in 61 fraudulent mortgages totaling nearly $50.6 million on three dozen properties, court records show.

Based on that, the FBI arrested Rotolo in April 2009 on fraud and conspiracy charges. Her case then stagnated, with the only activity being various requests and approvals for Rotolo to travel outside of the local federal judicial district -- a sign she might have been cooperating with authorities.

The unidentified informant, meanwhile, has agreed to plead guilty to one count of conspiracy, according to court records.

“The story behind all of this will become clear in the coming days as they move through the system,” said Gary Sherrill, deputy assistant inspector general for investigation at the Federal Deposit Insurance Corp. Office Inspector General.

What may also come about is more indictments, according to federal agents and court records.

“I often compare these mortgage fraud cases to a spiderweb that spreads in all different directions. You may get an allegation involving a handful of properties ... and it can turn into five or six properties ... or as you see here 22 properties.”

The Sarasota case spanned over 10 years, from at least October 1997 and March 2008, in which the 14 defendants made false statements regarding the real seller and buyer in the property transaction, the property’s real sale price and the buyer’s income, assets and liabilities to obtain loans from nearly 12 banks and private mortgage lenders in the area.

This case came to light after agents analyzed nearly 200 mortgages, about 50 bank accounts and conducted hundreds of interviews.

“These mortgage fraud cases are complex animals,” Sherrill said. “They are labor intensive, they are document intensive and they are time consuming.”

The case is being prosecuted by assistant U.S. Attorney Christopher P. Tuite.

The defendants face a maximum of five years in federal prison and a fine of $1 million for a conspiracy violation, and up to 30 years in prison and a fine of $1 million for falsifying documents in connection with a loan.

-- Herald Staff Writer Duane Marsteller contributed to this report.

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