Five defendants pleaded guilty to mortgage fraud crimes that covered more than 500 real estate transactions totaling $50 million, according to County Prosecutor Bill Mason and the Cuyahoga County Mortgage Fraud Task Force.
The crimes involved one house in Strongsville and hundreds in other communities, including Lakewood, Olmsted Township and Cleveland.
The investigation uncovered schemes involving $44 million in fraudulent loans and $31 million in profits.
Uri Gofman, 39, of Beachwood, pleaded guilty Wednesday to 11 counts including engaging in a pattern of corrupt activity, theft, money laundering, telecommunications fraud and tampering with records.
Mason said Gofman orchestrated one of the nation’s largest mortgage fraud cases by enlisting family, friends and others to invest in his real estate company, Real Asset Fund, with promise of profit.
Gofman’s enterprise began with seed money from an investor who transferred funds from an Eastern European bank account in Latvia.
Gofman’s typical scheme involved setting up straw buyers to purchase homes; falsely claiming home improvements were performed or inflating the value of improvements on houses in order to refinance them; and then selling houses to unqualified buyers with assistance of real estate agents, mortgage brokers, and title companies.
Gofman and others defrauded lenders through loan application fraud, down payment fraud, and loan distribution fraud.
Gofman agreed to pay $1 million in restitution, forfeit $600,000 in seized cash, forfeit 43 houses valued at $4.1 million in real estate to the Cuyahoga County Land Bank, and cooperate in future prosecutions.
Gofman will be sentenced to 8.25 years on Feb. 1, 2012, in Judge Daniel Gaul’s courtroom.
Anthony Capuozzo, 41, of Concord, pleaded guilty to 10 similar counts.
Capouzzo owned, operated and controlled Family Title. Capouzzo executed a fake down payment scheme by providing lenders with false settlement statements misleading lenders into believing that the buyer was making the down payment when they were in fact not.
Capouzzo was sentenced Wednesday to one year in prison consecutive to the 26 month federal sentence he has already received, which he will begin to serve Ja. 10.
The Real Asset Fund and Karka, Inc. were Gofman’s business entities which owned or controlled the real estate. Clear Choice Realty which was also owned by Gofman sold the real estate.
All three pleaded guilty to fraud-related charges.
“These criminals are mortgage fraud predators and deserve every year in prison that they receive. While these hoodlums were illegally making money they were devastating our neighborhoods with foreclosures,” Mason said in a news release.
Of the 453 houses, 358 fell into foreclosure. There were 22 Cuyahoga County communities affected by Gofman’s schemes: 239 houses in Cleveland, 74 houses in Cleveland Heights, 33 houses in Maple Heights, 18 houses in Euclid, 14 houses in University Heights, 13 houses in East Cleveland, 12 houses in Garfield Heights, 12 houses in Shaker Heights, 8 houses in Lakewood, 7 houses in South Euclid, 5 houses in Lyndhurst, 3 houses in Beachwood, 3 houses in Bedford Heights, 2 houses in Bedford, 2 houses in Warrensville Heights, 2 houses in Mayfield Heights, 1 house in Oakwood, 1 house in Westlake, 1 house in Olmsted Township, 1 house in Strongsville, 1 house in Glenwillow, and 1 house in Highland Heights.
“The 18-month investigation by the Cuyahoga County Mortgage Task Force, which operates under the Attorney General’s Ohio Organized Crime Investigations Commission, unearthed the evidence, linked the lies and connected the dots of deception,” Ohio Attorney General Mike DeWine said in the release.