According to the Indictment filed in Manhattan federal court:

From November 2003 through April 2005, the defendants engaged in a fraud scheme targeting homeowners whose homes, primarily in Brooklyn and Bronx, were in foreclosure or facing foreclosure, by offering them a plan to "save" their homes.  The proposed plan included the refinancing of the homeowners' debt with new, larger mortgages. Because the distressed homeowners typically had poor credit and were not otherwise eligible to refinance their debt at favorable terms, the defendants induced them to "sell" their homes to third parties, or "straw buyers," who would apply for loans to be used to "save" the home.

The defendants promised that once the straw buyer obtained the mortgage, the proceeds would be used to pay off the homeowners’ old debt and make one year’s worth of payments on the new loans.  The homeowners were told that, during that year, they could continue to live in their homes and work on improving their finances and credit.

Finally, the defendants explained to the homeowners that, at the end of the year, the title to their homes would be returned to them by the straw buyers, with their credit repaired and their homes saved. There were also cases in which the defendants did not explain to homeowners that the plan to"save" their home required them to deed their house to a third party and did not obtain permission to deed the homes to others. In such cases, the defendants effectively stole the property of the homeowners by forging the homeowners' signatures on various documents that transferred the homes to straw buyers without the homeowners' knowledge.

The straw buyers, individuals with good credit scores whom the defendants recruited to buy the homes facing foreclosure, were typically told that they were helping someone to "save" their home, and were paid a fee of up to ten thousand dollars per property for taking out debt in their names. Once a potential straw buyer agreed to participate in the scheme, the defendants submitted loan applications to lenders on the straw buyer's behalf. In submitting these applications, the defendants regularly used documents containing false or misleading information, including information concerning the straw buyer's income, assets, and existing debt, to improve the straw buyer's credit worthiness. In addition to false statements concerning the straw buyers' financial profile, the defendants misrepresented to lenders that the straw buyers intended to reside in the property that would secure each mortgage or loan, when, in fact, the properties were already occupied by the distressed homeowners.

The defendants facilitated the funding, by various banks and lending institutions, of over eighty home mortgages and/or equity loans valued at over twenty million dollars. These home equity loans and mortgages were often in amounts greater than the homeowners' pre-existing debt and, in some cases, in excess of the properties' actual values. The difference between the amount of the new and old loans represented the defendants’ profit from the scheme. Furthermore, the defendants deceived straw buyers by refinancing multiple properties in the names of individual straw buyers, without fully disclosing this to them. Thus, loans were taken out in the name of the same straw buyers for up to four different properties. To minimize the risk of detection by any of the lenders, such loans were closed within a short period of time.

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