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Flagler County at the Heart of a Mortgage Fraud Investigation That Nets 11 Arrests, $9m Losses

| March 14, 2011

Fraudsters Beware. (NYS Consumer Protection Board)

The Florida Department of Law Enforcement (FDLE), the Florida Office of Financial Regulation, the Office of the Attorney General’s Office of Statewide Prosecution, and the Flagler County Sheriff’s Office today announce the arrest of 11 individuals for their role in a mortgage fraud case that spanned Flagler, Volusia and Lake Counties, involved 23 homes and resulted in more than $9 million in losses.
Eighteen of the homes at the center of the investigation were in Flagler County, said John Wethington, an assistant prosecutor with the State Attorney General’s Office. The reason: Flagler County was out of the usual places where fraud was occurring. “So it was sort of a prime target,” Wethington said. “Nobody was looking for it. Everybody is looking for it, or most are looking for it, in Miami.”

Most of those arrested are from Miami. Just one is from Flagler County: Linda Kasper, 64, of 628 Yorkshire Drive in Flagler Beach. Kasper is at the Flagler County jail on a count of racketeering and a count of attempted racketeering, both first-degree felonies. She was booked there on March 3. She remains there on $25,000 bond. Of the 11 individuals charged in the alleged scheme, Kasper is the only one jailed in Flagler.

A local source was able to tip off investigators, Wethington said, when that source noticed matters amiss in records publicly available.

Four people are still wanted in relation to this case. All individuals are charged with one count of criminal racketeering and one count of conspiracy to commit racketeering. Most of those who lost money are national lending institutions, and most of those are out of business.

Linda Kasper (FCSO)

The two-year investigation, named “Operation Fast Cash Kickback,” focused on a complex scheme involving home buyers, realtors, appraisers, and mortgage brokers. Investigators allege the charged individuals artificially raised home prices, falsified appraisals, and pocketed large amounts of cash by facilitating a series of fraudulent home sales. The scam involved using “straw buyers” to purchase a home.

The straw buyer’s realtor then asked the seller to raise the price of the home in order for the difference to be provided back to the straw buyer for alleged “renovations.” The appraiser would then inflate the price of the home to meet the contract sales price. At closing, a designated third party individual or shell company received the proceeds for “renovations,” which ranged from $25,000 to $320,000 for each sale.

The third party recipient then returned a majority of the funds back to the straw buyer via check or wire transfer. No renovations were ever conducted on the homes and each of the properties foreclosed a short time after the sale. The estimated loss to date is approximately $9 million.

The investigation is closed, but it could reopen in the future. “We decided to cut the investigation at this point because we had as many as we could handle,” Wethington said.

Judging from the pattern of the fraud in Flagler County and elsewhere, Wethington had this bit of advice to prevent or perhaps detect similar fraud: “If I were a consumer or homeowner and tried to sell my house and had reduced my price a couple of times, I’d de concerned if someone came in and offered me substantially more than I was asking.”

The following individuals were arrested:

Jonathan Bravo, 33, of Miami
Cristian Diaz, 34, of Doral
Jamie De La Roche, 42, of Lake Worth
Carlos Esteller, 43, of Miami
Edith Esteller, 51, of Miami
Patricia De La Espiella, 49, of Miramar
Carmen Ganem, 30, of Miami
Claudia Ganem, 36, of Miami
Argenis Lugo, 33, of Doral
Adrian Pena, 34, of Miami
Linda Kasper, 64, of Flagler Beach

The following individuals are still being sought by authorities. Individuals with information about their location should contact their local authorities.

Nieves Alvarez, 50, of Miami
Nelson Pinzon, 48, of Delray Beach
Cruz Urbano, 44, of Hialeah
Randy Ly, 45, Seattle Wash.

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9 Responses for “Flagler County at the Heart of a Mortgage Fraud Investigation That Nets 11 Arrests, $9m Losses”

  1. w.ryan says:

    I’m still waiting for the big fish in Wall Street to be arrested!

  2. lawabidingcitizen says:

    Linda Kasper? Name sounds familiar.

  3. palmcoaster says:

    You got that right Ryan…Greenspan, John Paulson…and all the ones that bet the mortgage institutions will crash down after all the banks and lenders and home owners loaded on variable rates loans with Greenspan’s blessing. As soon as all the billionaire bets from John Paulson of the Paulson hedge fund and others like him loaded in bets down of all the lenders…Guess what? Greenspan raised the rates 19 times in one year alone…hello? making Paulson and company super billionaires on the bets. Now Greenspan works for Paulson hedge funds…. hello?
    In mid-January 2008, hedge fund Paulson & Co. hired Greenspan as an adviser. According to the terms of their agreement he was not to advise any other hedge fund while working for Paulson. (During 2007 Paulson had foreseen the collapse of the sub-prime housing market and hired Goldman Sachs to package their sub-prime holdings into derivatives and sell them. Some economic commentators blamed this collapse on Greenspan’s policies while at the Fed.)[27][28]

  4. kevin says:

    There are plenty others that sat and worked along side that lovely lady at the company, whom I won’t mention, that were neck deep in it as well.

    I would see her out drinking and partying like some baller with real money (5MM short-term net liquidity) swearing and acting condesceding to others or talking things up while trying to inspire prospective customers with her alcohol and tobacco laden breath about the great investment flagler is.

    I almost feel bad for her, because at her age life will fly by her, leaving her destitute with no time to recover. People in Flagler have probably seen her a million times but with a lot of make-up and better clothing.

  5. The Truth says:

    Feel bad for her? I don’t feel bad for anyone who brings things on to themselves. She took advantage of many people and for that, she can sit in jail for as long as possible.

  6. SAW says:

    One finds it very hard to believe that this woman was the only participant from Flagler County ?
    Could be that a number others are a bit worried right now, knowing full well that she may start supplying names. Was she was also a prestigeous member of the Chamber of Commerce, and of course their Affiliates, do a follow up and let us know their comments ? Yea right lot’s of luck.

  7. kevin says:

    Absolutely “Truth” — I stated “I almost feel bad for her” but in addition to that, she isn’t the typical criminal. She was a regular person who was one of those realtors who has been selling Flagler/Palm Coast for decades. She got caught up in the game right at the end of what is for a fact, a very clean career as a normal, every-day realtor, which are the known facts to exist.

    If you had more information and technical understanding of the process, one would know that the title company and especially, THE BANKS should not have funded these loans based on the given facts. Fact: one home I am privy to the information on was just bought for $376,000 and sold to her customer, at a time when the market had already begun its cycle of decline, for $535,000 with around $90,000 was explained to the bank to be used for repairs and modifications, completely understandable given the house and it’s needs. The money was pocketed by her customer not her. She got snapped up as the realtor representing the customer. She received commissions and that is the only thing she is being prosecuted for in terms of the financial aspects. She worked under the real estate umbrella for a company that has been around for a long time and has a solid reputation, until this occurred.

    I particularly care for her but when one is unbiased and objective one concludes, based on the facts, she was not some nefarious individual with a background of crime. Ms. Casper is simply a working class, caught up in the greed, schlub. The FBI (again I am privy to some facts and details you aren’t unless you really go do some significant homework) pinned her wings down and made an example of her, to make others cringe at how close they came in receiving a serious thrashing and as a reminder to realtors to be mindful of their responsibilities as a licensed professional. For a fact, there should have been others from what I know who we’re involved. That is the real story, how and why DIDN”T they get in trouble. Anyway….

    What I also wonder why is never addressed, at least nothing I have seen, is why builders have not been arrested or in trouble as a result of their shoddy and easily identified not to code building and construction issues. Why have so many municipal protocols been allowed to remain unexamined(?) when for a fact they are clearly at fault for many problems that customer’s have been forced to suffer from, financially and mentally? Two big “family” name builders were allowed to build clearly defective and improperly constructed homes without any restrictions to their licenses. Seagate, lovely Seagate…I can outline the details of one house they built that one would think the subcontractors and their employees were probably doing crack literally while they were on the site during the foundation and framing process, critical stages as most will agree. They installed trusses that literally laid in the sand in the front of the house through two months of rainy, cold conditions. They we’re blackened from mold, and warped to a ridiculous degree, yet the city allowed them to install them even though the cusomters protested to both Seagate and the city. Issues involving that home are the stuff that customer nightmares are made from. Suing them was impossible because they were obligated to settle the matters in the biased forum of arbitration, designed for and primarily helping the builders not the customers. The customers lost at least 100k as a result and Seagate walked away with not a scratch in comparison. The bank suffered losses as well in the long run.

    As a side note, it’s unfortunate we can’t have more civil comments between one another more often like those under this column, instead of the hateful, insulting rhetoric that normally populates the comment areas. Has anyone read, “Arguing with idiots?” I hear its good according to the objective reviews. LOL (boy, I’m sure that will bring about some ugliness)

  8. IML8 says:

    If you look at the foreclosures in the area and then look up the names of individuals under clerk of court case search you would be amazed at how much money people were taking out on the houses around here. In some cases you can find individuals that took out loans for $2,000.00 + on one property they purchased and then had other properties they owned go in foreclosure a year later. This is what has crashed the real estate market, ruined this area….. their are so many people to point figures at. What I hate is that the media doesn’t expose what really has gone on. They make it sound as the housing market has fallen just because mortgage companies gave large loans to the average family that couldn’t afford it.. that couldn’t be farther from the truth. It will be interesting to see if there will be more findings similar to the case discussed in this article.

  9. IML8 says:

    oops I meant $200,000.00 +

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