An indictment was unsealed in Brooklyn federal court charging Iskyo Aronov, Michael Konstantinovskiy, Tomer Dafna, Avraham Tarshish and Michael Herskowitz with conspiracy to commit wire fraud and bank fraud, and related wire fraud counts.
Among those allegedly defrauded include the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and other borrowers.
Konstantinovskiy, Dafna, Tarshish, and Herskowitz were arrested on Tuesday, Sept. 10, in New York, and were arraigned. Aronov was arrested in Florida, and will appear for a removal hearing at the federal courthouse in Miami.
It is alleged that between 2012 and January this year, the five conspired to defraud mortgage lenders by misleading them into approving short sale transactions at fraudulently depressed prices.
U.S. Attorney Richard Donoghue said that the five fraudulently manipulated the short sale process by transferring properties for prices well above the short sale prices, and failing to disclose this to the mortgage lenders and servicers. They also took steps to preclude other prospective purchasers from making higher offers for properties by failing to market properties as required by the lenders, and by filing fraudulent liens on properties.
The five also allegedly provided mortgage lenders with false and misleading information in transaction documents, failing to disclose payments made to the borrow and others related to short sale or other agreements to transfer properties at inflated prices.
“These five individuals allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, borrowers, and the Federal Housing Administration, causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners,” stated HUD-OIG Special Agent-in-Charge Christina Scaringi stated.
“What makes their alleged crimes even more egregious was their artificial devaluation of properties that, when resold or ‘flipped,’ resulted in large profits. Many of these homes were located in economically challenged areas of New York where affordable housing is at a premium.”
Aronov, 32, of Miami, Konstanttinovskiy, 33, of Rego Park, Dafna, 48, of Great Neck, Tarshish, 40, of Queens Village and Herskowitz, 40, of Brooklyn, will face up to 30 years in prison and a $1 million fine if they are convicted.
“As alleged, the defendants defrauded mortgage loan holders out of millions of dollars, with taxpayers saddled with much of the loss,” Donoghue added. “This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of the financial institutions and government programs that insure or guarantee the loans.”
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