Defendant Indicted in $20 Million Mortgage Fraud Scheme

BROOKLYN, N.Y., Oct. 23 /PRNewswire-USNewswire/ -- An indictment was unsealed
this afternoon in Brooklyn federal court charging Osmond Decoteau, 48, with
wire fraud for masterminding a scheme to defraud mortgage lenders and banks of
more than $20 million in connection with the sale of several properties
located in Brooklyn and Florida, announced U.S. Attorney for the Eastern
District of New York Benton J. Campbell, Assistant Director-in-Charge of the
FBI New York Field Division Mark J. Mershon and Inspector General of the
Federal Deposit Insurance Corporation (FDIC) Jon T. Rymer. The defendant's
arraignment is scheduled later today before U.S. Magistrate Judge Roanne L.
Mann at the U.S. Courthouse in Brooklyn.

Mortgage lenders often employ loan servicers to collect monthly mortgage loan
payments from homeowners and remit the payments to the lender in exchange for
a monthly fee. When a property is sold or a mortgage is refinanced, the
lender issuing a new loan typically wires the proceeds to the closing
attorney, who in turn sends a portion of the proceeds to a loan servicer to
pay off any pre-existing mortgage liens.

As alleged in the indictment and an underlying complaint, Decoteau recruited
straw purchasers for properties located in Brooklyn and Florida, and ensured
that their mortgage applications would be approved by lenders by fraudulently
misrepresenting the purchasers' financial condition. Subsequently, at the
closings on these properties, Decoteau presented phony payoff letters which
indicated that three companies he controlled were the loan servicers for the
properties. The closing attorneys then issued payoff checks to the
Decoteau-controlled entities, instead of the actual loan servicers for the
holders of the pre-existing mortgages. To conceal the fraud, Decoteau caused
monthly payments to be made on the underlying mortgages so that those
mortgages would not be declared delinquent. As a result of the defendant's
scheme, between April 2005 and January 2007, multiple fraudulent closings
occurred resulting in a fraud exceeding $20 million, and each of the
properties is now encumbered by two first-lien mortgages.

"In May of this year we announced the formation of a task force comprised of
federal, state and local law-enforcement agents and investigators to address
the burgeoning problem of mortgage fraud," said U.S. Attorney Campbell. "This
prosecution is one example of the results of that cooperative initiative,
which includes the investigation and prosecution of mortgage fraud that has
harmed investors, lenders and homeowners across the country."

"Combating mortgage fraud is a priority because mortgage lending and the
housing market have a significant overall effect on the nation's economy. The
FBI is committed to investigating and prosecuting criminals who exploit
vulnerabilities and devise new methods or schemes to defraud," said FBI
Assistant Director-in-Charge Mershon.

"The FDIC OIG is committed to its partnerships with others in the law
enforcement community as we address mortgage fraud cases throughout the
country," said FDIC Inspector General Rymer. "Now, more than ever, the
American people need to be assured that their government is working to ensure
integrity in the financial services and housing industries and that those
involved in criminal activities that undermine that integrity will be held
accountable."

If convicted, Decoteau faces a maximum sentence of 20 years of in prison.

The government's case is being prosecuted by Assistant U.S. Attorneys Jonathan
E. Green and Daniel Spector.

SOURCE U.S. Department of Justice

Robert Nardoza of the U.S. Department of Justice, +1-718-254-6323, TDD:
+1-718-254-6300