Two defendants, along with three companies, pled guilty to mortgage fraud crimes covering over 500 real estate transactions totaling $50 million, $44 million in fraudulent loans and $31 million in profits.
Beachwood resident Uri Gofman, 39, pled guilty Dec. 21 to 11 counts including one count of engaging in a pattern of corrupt activity, one count of theft, two counts of money laundering, one count of telecommunications fraud and six counts of tampering with records.
Gofman orchestrated one of the nation’s largest mortgage fraud cases by enlisting family, friends and others to invest in his real estate company known as Real Asset Fund, with a promise of profit.
His company began with seed money from an investor who transferred funds from an Eastern European bank account in Latvia. Gofman’s scheme involved setting up straw buyers to purchase homes, falsely claiming home improvements were performed or the value of the improvements were inflated on houses in order to refinance them. He would then sell the 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. He agreed to pay $1 million in restitution, to forfeit $600,000 in seized cash, to forfeit 43 houses valued at $4.1 million in real estate to the Cuyahoga County Land Bank and to cooperate in future prosecutions.
Gofman will be sentenced to 8¼ years in prison by Judge Daniel Gaul.
The Capuozzo scheme
Concord resident Anthony Capuozzo, 41, pled guilty to one count of attempted engagement in a pattern of corrupt activity, two counts of money laundering, six counts of tampering with records and one count of telecommunications fraud.
Capuozzo owned, operated and controlled Family Title. He executed a fake down payment scheme by providing lenders with false settlement statements, misleading them into believing the buyer was making the down payment, which was actually not made.
He was sentenced Dec. 21 to one year in prison consecutive to the 26-month federal sentence he already received. He began serving his time Jan. 10.
The Real Asset Fund, Clear Choice Realty and Karka, Inc., were all businesses owned by Gofman.
The Real Asset Fund pled guilty to one count of engaging in a pattern of corrupt activity and one count of theft. Clear Choice pled guilty to one count of engaging in a pattern of corrupt activity and two counts of receiving stolen property. Karka pled guilty to one count of engaging in a pattern of corrupt activity, one count of theft and three counts of money laundering.
Out of the 453 homes involved in the scheme, 358 fell into foreclosure. More than 20 Cuyahoga County communities were affected.
Those included 239 houses in Cleveland, 74 in Cleveland Heights, 33 in Maple Heights, 18 in Euclid, 14 in University Heights, 13 in East Cleveland, 12 in Garfield Heights, 12 in Shaker Heights, eight in Lakewood, seven in South Euclid and five in Lyndhurst.
Also included were three homes each in Beachwood and Bedford Heights; two each in Bedford, Mayfield Heights and Warrensville Heights; and one each in Glenwillow, Highland Heights, Oakwood, Olmsted Township, Strongsville and Westlake.
Goffman has agreed to forfeit multiple properties to the Cuyahoga Land Bank, which will be working with Cuyahoga County Prosecutor William Mason to receive any specifically forfeited properties so it may re-purpose the properties.
“We are happy to be able to assist in repairing some of the damage done to our community through flipping,” said Cuyahoga Land Bank President Gus Frangos.
Some properties will be demolished due to their distressed or condemned condition, while others will be eventually sold to eligible and qualified rehabbers, city land banks or non-profits. Because most of these properties are causing blight in many neighborhoods, the Cuyahoga Land Bank’s first action will be to assure the properties are secure and not open, and to remove debris and immediate life-safety hazards.
“These criminals are mortgage fraud predators and deserve every year in prison that they receive,” Mason said. “While these hoodlums were illegally making money, they were devastating our neighborhoods with foreclosures.”
Ohio Attorney General Mike DeWine said the court action that took place Dec. 21 proves criminals who defraud people will not get away with their plans.
“We will continue to go after those who commit mortgage fraud, using the power of local, state and federal law enforcement. The 18-month investigation by the Cuyahoga County 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,” DeWine said.
Since January 2007, the prosecutor’s office has indicted 38 defendants, resulting in over $131 million in fraudulent loans for 1,015 homes located in 29 communities in Cuyahoga County and six outside of the county.
This investigation was led by the Cuyahoga County Prosecutor’s Office; Ohio Attorney General’s Office; Cuyahoga County Sheriff’s Office; United States Attorney’s Office; FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Postal Inspectors; Beachwood, Cleveland Heights and Pepper Pike police departments; and the U.S. Department of Housing and Urban Development.