TAMPA Four arrests were made today in a multimillion-dollar scam involving brokers fraudulently submitting loan applications to Argent Mortgage Co.
The brokers were compensated based on the number of loans they made through Argent, and the loans wouldn't have been made had Argent known they were fraudulent, Hillsborough County Consumer Protection Chief Investigator Kevin Jackson said.
The arrests were the second phase of a multiyear investigation into a scam involving Argent that ripped off dozens or more people, he said.
Orson W. Benn, Constance M. Golder, David E. Tuggle Jr. and Eric C. Steinhauser were arrested today.
"Mortgage fraud threatens the very essence of the American dream - the goal of home ownership," state Attorney General Bill McCollum said today in a news release from the Florida Department of Law Enforcement. "Unfortunately, Florida ranks first in the nation for the number of mortgage foreclosures, making our citizens who are struggling to protect their homes even more susceptible to fraud, and we must continue to aggressively investigate and prosecute those whose criminal behavior perpetuates these illegal actions."
Benn, a former Argent vice president, was arrested in July and arrested again at a hearing today in Polk County.
Golder, 31, of South Tampa, had served as an account executive for Argent, one of the nation's largest subprime mortgage companies.
Tuggle and Steinhauser were mortgage brokers for Tampa-based Sunstate Mortgage Co.
Through Sunstate, Tuggle and Steinhauser submitted 314 residential mortgage loan applications to Argent, an affidavit states.
Benn approved or oversaw the approval of the fraudulent loan applications, according to the release. Investigators say Tuggle and Steinhauser paid Benn more than $100,000 for insuring the approval of the fraudulent loans.
Golder served as liaison between Benn and Sunstate Mortgage, the release states.
Of the 314 applications, Argent approved and funded 286 - valued at more than $34 million, according to the affidavit. The investigation identified 11 loan applications where Tuggle, Steinhauser, Golder and Benn participated in the preparation and submission of fraudulent loan application documents.
Those 11 documents totaled nearly $1.2 million.
Loans were given to people in Hillsborough, Pinellas and Polk counties.
"This is the second mortgage fraud case involving Benn, and investigators believe there may be numerous mortgage brokerage companies in Florida with whom Benn perpetrated similar schemes," the release states.
Benn was charged with racketeering, conspiracy to commit racketeering, obtaining mortgage by false representation and two counts of grand theft. If convicted, he could be sentenced to as many as 95 years in prison.
His attorney, Philip Averbuck, said Benn is not guilty of the charges against him and will be exonerated by a jury.
Benn didn't know documents were fraudulent, had no way of knowing they were fraudulent, wasn't trained or responsible to know whether they were fraudulent and wasn't even the last person to sign off on them, Averbuck said.
"We feel there are certain glaring facts that the prosecutor is ignoring or choosing to ignore," Averbuck said. "I don't think Orson Benn should have even been charged here."
Golder, Tuggle and Steinhauser were charged with conspiracy to commit racketeering. If convicted, each could be sentenced to as many as 30 years in prison.
Golder, who was in Orient Road Jail today, could not be reached. Messages for Steinhauser's attorney and Tuggle's attorney weren't immediately returned.
"More arrests are anticipated," FDLE spokeswoman Trena Reddick said. "We just don't know when."
Argent's Previous Issue
The multiyear investigation into a scam involving Argent also netted six arrests in July, including two Hillsborough County residents.
Several law enforcement agencies said Scott A. Almeida, 32, of Lithia, and Frank S. Giffone, 33, of Tampa, persuaded homeowners - the bulk of them minorities - in poor areas of Florida to take out home loans. The two told homeowners they would use the money to make significant home improvements, according to FDLE.
Almeida and Giffone, arrested July 18 in Hillsborough, submitted loan applications that included false, forged or counterfeit documents, FDLE officials said.
Benn and Samuel L. Green used their positions in Argent's White Plains, N.Y., office to subvert company policy and approve the loan packages, according to a previous news release from FDLE. Money was diverted into the bank accounts of those involved in the scheme, and the victims were left with large home loans and received little, if any, home improvement.
Those charged also were involved in creating fake documents to secure the loans, including altered or fake W-2 forms, income verification forms, check stubs and credit reports, FDLE officials said. Thirty-one of the fraudulent loans included in an arrest affidavit total nearly $3 million.
The criminal enterprise submitted nearly 130 loan applications to Argent, which resulted in funding for about $13 million in home loans, according to McCollum's office.
"This type of fraud will simply not be tolerated in our state," FDLE Commissioner Gerald Bailey says in a written statement released in February. "We'll continue to work aggressively with our law enforcement partners to ensure the perpetrators of scams like these are brought to justice."
Victims from the July arrests live in Hillsborough, Pinellas, Polk, Lee, Orange, Monroe and Broward counties, FDLE Special Agent Ellen Wilcox said in 2007.
Agnes Gary said that when Giffone promised he would renovate the Ybor City home she had owned since 1963, he helped her take out a $42,000 loan. But he never fixed her home or gave her a cent, said her daughter, Viola Gary.
Agnes Gary's credit has been cleared, but the family sold the house rather than take a chance on being swindled again, Viola Gary said.
Agnes Gary said in July that the people who were arrested deserve whatever happens to them. She asked God to bless and forgive them.
The Garys could not be reached today about the new arrests.
Almeida, Giffone, Benn, Green and Adrienne L. White were charged with racketeering and conspiracy to commit racketeering. A sixth person, Bradford C. Peck, was convicted on racketeering charges in February and sentenced to up to eight years in prison, according to court records.
Almeida, Giffone and White have pleaded guilty to racketeering charges and are awaiting sentencing.
The cases for Green and Benn are ongoing.
Involved in the investigation with the FDLE were the Tampa Police Department, Hillsborough County Consumer Protection Agency, Pinellas County Department of Justice and Consumer Services and the Florida Attorney General's Office of Statewide Prosecution.
The investigation began in 2004, when some victims spoke to Tampa police and Hillsborough's Consumer Protection Agency about incomplete construction work.
Eventually, a task force was formed, issuing about 250 subpoenas and reviewing tens of thousands of documents.