It is the largest alleged mortgage fraud scheme so far uncovered in Hawaii.
Fourteen people are facing charges of conspiracy, wire fraud and making false statements on loan applications involving 46 residential properties on Oahu.
Four people are in custody in Honolulu, and one in Seattle.
Six people are free on $50,000 unsecured signature bonds after pleading not guilty to the charges yesterday in federal court. One more person was scheduled to appear in court today, and two more are expected to turn themselves in to authorities.
The alleged scheme, detailed in two secret grand jury indictments returned Wednesday, revolve around three now-defunct mortgage loan companies: Easy Mortgage Corp., Unlimited Mortgage Services and Wealth Transfer Mortgage.
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"The defendants are accused of operating their mortgage businesses as fraud factories — creating false documents to dupe lenders into funding sham home purchases," said Special Agent Tom Simon, FBI spokesman.
The scheme operated from about September 2003 to February 2008, after which the subprime mortgage industry crashed.
The defendants bought, sold, refinanced and resold properties at escalating prices, then left the lenders holding the bag when the borrowers failed to pay off the loans, according to the indictment. They split up millions of dollars in loan proceeds and took their standard commissions, costs and transaction fees, the indictment said.
The lenders include some of the big losers of the crash, including Countrywide Home Loans and Fremont Investment and Loan.
The four people who remain in custody here are:
» Estrellita "Esther" Garo Miguel, owner and principal broker of Easy Mortgage and a real estate agent.
» Jennifer Garin Miguel, a loan officer at Easy Mortgage, president of Unlimited Mortgage and a real estate agent.
» Atlantica Kahaunani "Nani" Tanuvasa, a loan officer with Easy Mortgage, Unlimited Mortgage and Wealth Transfer Mortgage, and a real estate agent.
» Tanuvasa’s husband, Lene Tanuvasa Jr., who allegedly recruited people to sign up for fraudulent loans to buy residential properties.
FBI agents arrested the Miguels at Jennifer Miguel’s $1.1 million home in Salt Lake yesterday morning. They arrested the Tanuvasas at their $2.1 million home in Kahala.
The others named in the indictments are Yolie Castillo Tiburcio, Vinah Ceriales Morales, Geraldine Garin Miguel Lukela, Teresita "Tessie" Faeldonea Sorino, Mary Ann Lapenia, Stephen Elmer Callo, Felicidad "Felicia" Tabalbag Corpuz, Albert Lonoikauakini Joy, Samantha Michel and Michelle Lee Malulani Kama.
The indictment says the defendants submitted false loan applications containing inflated incomes to qualify straw purchasers for mortgage loans. Some are accused of cutting and pasting fake bank statements.
Callo, a certified public accountant and president of Accufast Mortgage, is also charged with preparing and signing confirmation letters when underwriters for the lending institutions attempted to verify the information on loan applications.