A Virginia woman will spend the next five years in federal prison after being convicted of 13 counts of mortgage fraud, passing fictitious financial instruments and tax fraud.
According to the Department of Justice’s Tax Division, Charise Stone, 46, of Ashburn, Virginia, targeted distressed homeowners who owed more on their mortgage than the market value of the home with false promises of financial recovery.
From 2007 to 2010, the DOJ said that Stone acquired the distressed homeowners’ properties in her own name or under entities she controlled, made false representations to mortgage lenders to gain approval of the short sales and then resold the properties – often the same day or the next – to new buyers at a price above the short sale amount in violation of agreements made with mortgage lenders.
According to the DOJ, Stone ran the scheme with Jose Marinay, who owned a settlement company that closed every short sale for Stone.
Marinay pleaded guilty to wire-fraud conspiracy on May 27, 2014.
The DOJ said that at Marinay’s and Stone’s direction, fraudulent HUD-1 settlement statements were prepared to facilitate the transactions. Stone destroyed some of the incriminating documents after closings, the DOJ said.
According to the DOJ, financial institutions suffered at least $2.2 million in losses from the scheme. Stone profited more than $700,000 from these transactions and failed to file individual income tax returns.
She also sent fictitious bonds to the Internal Revenue Service in an attempt to pay off her tax liability, and sent fake international promissory notes to creditors purporting to satisfy her credit card debt as well as her own mortgage.
Stone was found guilty on May 27, and will serve five years in prison to be followed by three years of supervised release.
Stone was also ordered to forfeit $721,552.55 and pay $2,330,722 in restitution to the victim financial institutions and $143,218 in restitution to IRS.
