Estrellita "Esther" Garo Miguel is going to prison for about four years for running the largest mortgage fraud scheme in Hawaii.
U.S. District Chief Judge Susan Oki Mollway sentenced Miguel on Monday to 52 months in prison for wire fraud, making false statements on loan applications, money laundering and conspiring to commit mortgage fraud. She gave Miguel until March 4 to turn herself in to begin her sentence. Miguel remains on electronically monitored home detention.
Miguel said she knows what she did is wrong and is sorry for involving her two daughters in the scheme.
She is the first of 14 people charged in two separate indictments in August 2010 to be sentenced for their roles in the scheme. Twelve others, including Miguel’s daughters, Jennifer Garin Miguel and Geraldine Garin Miguel Lukela, are scheduled to be sentenced in the coming months. Ten others charged separately are also awaiting sentencing.
Only one of the 14 people charged in the indictments, Lene Tanuvasa Jr., had not pleaded guilty. He is scheduled to stand trial in May on charges of wire fraud and conspiring to commit mortgage fraud.
Federal prosecutor Ken Sorenson told Mollway that the scheme, which ran from 2003 to 2008, involved about 400 loans processed through Miguel’s mortgage brokerage company. As president and owner of Easy Mortgage, Miguel trained her loan officers to process fraudulent loan applications, which included cutting and pasting false bank statements, Sorenson said.
"What Estrellita Miguel was operating was a factory of fraud," he said.
Most of the other defendants were either loan officers at Easy Mortgage or straw buyers who allowed Miguel and others to use their names on loan applications containing false income and asset information. One other defendant, a certified public accountant, wrote letters backing up the false information on the applications.
The money was used to buy properties with the intent to resell them later at a profit. In some instances that happened, but the number of such investments is unclear.
Miguel’s lawyer, Richard Hoke Jr., said banks that provided the mortgages knew the applications were fraudulent.
"They knew, the lenders knew what was going on," Hoke said. "They looked the other way."
Mollway will order how much Miguel must repay the banks in restitution in another hearing next month.
