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The Florida Department of Financial Services Announces Final Resolution in $35 Million Central Florida Mortgage Fraud Case

2/12/2015

Contact: Ashley Carr
(850) 413- 2842
 
TALLAHASSEE, Fla. - A joint investigation conducted in partnership by the Florida Division of Insurance Fraud and the Federal Bureau of Investigation, that was later prosecuted by the United State Attorney’s Office for the Middle District of Florida, culminated this week with final restitution ordered of more than $12 million and sentences for James Sotolongo, Christopher Mencis, and Stephanie Musselwhite for their roles in a mortgage fraud scheme that defrauded lenders out of more $35 million.
 
“While seeing this case to its conclusion took several years, this week's resolution makes clear that time does not deter our dedication or our efforts,” said Deputy CFO Jay Etheridge. “We are able to report about successes like this one because of the strong collaborations among our team, the FBI and prosecution teams across our state.”
 
In a complex scheme that begin in 2005, the trio of co-conspirators obtained home mortgage loans for themselves and others, who were financially ineligible, by soliciting participants or straw buyers, to secure a mortgage in their name in exchange for a financial kickback and a promise that the straw buyers would not incur any personal expenses.
 
By using the names, personal identifiers and financial histories of friends and relatives who had good credit histories, and by falsifying the straw buyers’ current addresses, places of employment and monthly earnings, the trio duped multiple financial lending institutions into approving twenty-five falsified loan applications.
 
To further conceal their actions, the loan applications listed telephone numbers belonging to businesses involved in the ongoing scheme that had agreed to pose as an employer if a lender representative called to confirm employment history.  American Signature Homes and Omni One Financial were two businesses created for the sole purpose of deceiving mortgage lenders. 

The United State Attorney’s Office for the Middle District of Florida prosecuted these cases.  On February 4, 2014, Christopher Mencis was convicted of bank fraud conspiracy.  On April 28, 2014, Sotolongo was convicted of one count bank fraud conspiracy and 11 counts federal bank fraud.   Musselwhite was convicted of one count bank fraud conspiracy and 10 counts federal bank fraud.    

This week, restitution was ordered and James Sotolongo was sentenced to 100 months in prison, to be followed by five years’ probation; Christopher Mencis was sentenced to 28 months in prison, to be followed by three years’ probation; and Musselwhite was sentenced to 60 months in prison, to be followed by three years’ probation. Additionally, the department’s Division of Agent & Agency Services will be seeking the revocation to Stephanie Musselwhite’s insurance license.
 
Anyone with information about suspected insurance fraud is asked to call 1-800-378-0445. Citizens who provide tips can remain anonymous. The Department of Financial Services to date has awarded nearly $350,000 to nearly 60 citizens as part of its Anti-Fraud Reward Program. The program rewards individuals up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.