North Miami Mayor Lucie Tondreau has been indicted on charges of wire and mortgage fraud. She turned herself in to authorities on Tuesday.
According to the FBI, Tondreau, along with three other individuals, orchestrated an elaborate scheme to defraud lenders, including the U.S. Department of Housing and Urban Development (HUD), out of as much as $8 million.
Specifically, the FBI alleges that between December 2005 and May 2008, Tondreau, 54, of North Miami, Fla., and Karl Oreste, 56, of Miramar, Fla., president of KMC Mortgage Corp., hosted several Haitian radio shows that they used to recruit straw buyers who posed as borrowers to purchase properties identified by Oreste.
Some of these straw buyers were listeners responding to an advertisement by KMC Mortgage Corp. that was aired during the programs, authorities allege in the indictment. The co-conspirators, in turn, paid some of the listeners to help them carry out the fraud scheme.
In addition, Kelly Augustin, 57, of North Miami, an employee of KMC Mortgage, also recruited straw borrowers, the FBI alleges.
After the straw buyers were recruited, Oreste and Okechukwu Josiah Odunna, a.k.a "O.J. Odunna," 49, of Lauderdale Lakes, Fla., and other co-conspirators prepared or caused to be prepared loan applications on behalf of straw borrowers, the FBI alleges. Odunna was an attorney previously licensed to practice law in Florida and president of O.J. Odunna P.A. and Direct Title and Escrow Services.
The loan applications included false information relating to employment, wages, assets, and intent to make the property being purchased a primary residence, according to the indictment.
The loan applications and documents were submitted to various mortgage lenders throughout the U.S., and, once approved, the lenders wired loan funds to O.J. Odunna P.A., Direct Title or other title companies for closing.
Authorities allege that in some instances, Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-1 Settlement Statement Forms, which grossly inflated the true purchase price of the properties. HUD-1 Settlement Statements also falsely and fraudulently represented to the mortgage lenders that the straw borrowers had met their down payment and cash to close obligations, when, in fact, the straw borrowers had never made any such payments.
At closing, a portion of loan proceeds were disbursed to Oreste through his corporation, JR Investment and Mortgage Corp., or other bank accounts controlled by him. In some instances, a portion of the loan proceeds was diverted to O.J. Odunna P.A. or Direct Title accounts.
Oreste disbursed some of the proceeds he received to pay recruiters – such as Tondreau and Augustin – and straw borrowers, authorities allege. Oreste also transferred a substantial portion of the funds to bank accounts of LTO Investment Corp., a corporation controlled by Tondreau. Tondreau used funds deposited in LTO Investment Corp.'s bank accounts to make payments on the falsely and fraudulently obtained mortgages in order to maintain the loans and to conceal and further the fraud. She also used a portion of the funds deposited into LTO Investment Corp.'s bank accounts for her own personal use and benefit, authorities allege.
Over the course of the conspiracy, the defendants fraudulently obtained loans on approximately 20 properties, for which the lenders have suffered losses in the amount of approximately $8 million.
Tondreau and the others face up to 30 years in prison if convicted.
