Siblings Found Guilty in Large-Scale Mortgage Fraud Scheme

https://www.justice.gov/usao-wdpa/pr/siblings-found-guilty-large-scale-mortgage-fraud-scheme

Department of Justice
U.S. Attorney’s Office
Western District of Pennsylvania

FOR IMMEDIATE RELEASE
Monday, October 24, 2016

Siblings Found Guilty in Large-Scale Mortgage Fraud Scheme

PITTSBURGH - After deliberating an hour, a federal jury of four men and eight women found siblings James and Janna Nassida guilty of two counts of Bank Fraud and Conspiracy to Commit Bank and Wire Fraud, United States Attorney David J. Hickton announced today.
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According to Assistant United States Attorneys Cindy Chung and Brendan T. Conway, who prosecuted the case, the evidence presented at trial established that James Nassida owned and operated a mortgage broker business called Century III Home Equity (Century III), which assisted borrowers in obtaining loans collateralized by real estate. Janna Nassida was a manager at Century III and also a loan officer. At the time of the events at issue, which was between 2008 and 2008, Century III was one of the largest mortgage broker businesses in the Western District of Pennsylvania, and during the course of that timeframe brokered hundreds of millions of dollars worth of loans using more than a dozen different lenders. Many of those loans, however, involved one or more aspects of fraud.

Some of the aspect of the fraud included the following:
•Appraisals that fraudulently inflated the true value of the properties;
•Settlement statements that falsely reflected that the borrowers made substantial payments associated with the purchases of real estate;
•Settlement statements that failed to disclose secondary financing;
•Settlement statements that failed to include cash payments charged by Century III and paid by the borrowers;
•Settlement statements and closing documents that were backdated to reflect that the settlements had occurred on a date prior to the actual settlement date; and
•Various loan documents, including loan approval forms, good faith estimates, and underwriting transmittal forms, that failed to disclose secondary financing and falsely represented the combined loan to value ratio.

The fraud also involved misrepresentations to some of the borrowers to induce them to enter into the transactions, including concealing the fees Century III received from lenders for the borrowers’ transactions and the impact of those fees on the borrowers’ interest rates; and concealing the nature of the mortgage products, including that some of the mortgage products could negatively amortize. Lastly, the fraud also involved James Nassida’s receipt of kickbacks from the settlement company that he failed to disclosed to the borrowers and lenders, as required.

The evidence at trial established that James and Janna Nassida submitted multiple fraudulent documents associated with loans in which they served as a loan officer, but also that the loan officers working under their direction regularly submitted false information to lenders and borrowers. In addition, the evidence established that James Nassida caused the submission of fake documents to the lender in connection with his purchase of a $300,000 vacation home near Seven Springs, including the following: (1) a settlement statement that overstated the sales price; (2) a loan application that falsely stated his income and assets; and (3) fake statements from an investment company that falsely verified that he had more than $600,000 in investment when he really had about $15,000. In the loan application, James Nassida reported that he earned approximately $980,000 in 2006, but he did not even file his tax returns in 2006, and his reported taxable income in 2004 and 2005 was not even close to that figure.
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