Six Charged In $2 Million Western New York Mortgage Scheme
Attorney General Spitzer and New York State Police Superintendent James McMahon today announced a series of indictments in which six Buffalo residents were charged for their roles in a scheme to steal nearly $2 million from financial lenders by inflating the values of 40 Western New York properties.
In a 6-count indictment, Venere Hutchinson, 26, and his wife, Dana Upcher, 30, both of Buffalo; and Rahmel Wattley, 20, of Lawrenceville, New Jersey; were charged by a Erie County Grand Jury with multiple counts of Grand Larceny in the Second Degree, a class "C" felony; and one count of Scheme to Defraud in the First Degree, a class "E" felony. Wattley pled not guilty and bail was set at $5,000. Hutchinson and Upcher are fugitives and warrants have been issued for their arrest.
For his role in the scheme, Buffalo real estate appraiser Harry Sanders, 49, of Williamsville, the owner and operator of Sanders Appraisal Services and Select Appraisal Services, pled guilty May 13 before Justice Mario J. Rossetti to a single charge of Scheme to Defraud in the First Degree, a Class "E" felony. Sanders firm appraised 34 properties that had been purchased for $81,711 upon which his firm placed a market value of $2,374,500. Sanders sentencing has been scheduled for July 19.
A second, 5-count indictment, was also announced, charging Dennis Walker, 48, of Buffalo and a former Buffalo Police Officer, with multiple counts of Grand Larceny in the Second Degree, a class "C" felony; and Scheme to Defraud in the First Degree, a Class "E" felony for his role in the scheme. He was arraigned on May 14 and bail was set at $20,000.
In addition, David Myers, 40, of Amherst, a mortgage originator formerly employed by Atlas Mortgage Corporation, also pled guilty on May 13 before Justice Rosetti to Falsifying Business Records in the Second Degree, a class "A" misdemeanor. Myers sentencing has been scheduled for July 19. Spitzer also announced that he has settled a civil suit against Myers in which penalties and costs were assessed totaling $33,500.
According to papers filed by the Attorney Generals Office, it is alleged that between January 1997 and December 2000, Hutchinson, Upcher, and Wattley purchased 40 depressed properties in Buffalo for a total cost of $119,700 and received mortgages of $1,922,680 by providing inflated appraisals, prepared by Sanders, and fraudulent income statements. Some of the appraisals claimed property values of more than 10 times higher than the purchase price. The indictment identifies five lending institutions as having suffered losses when the defendants failed to pay the inflated loans including: Associates Home Equity Services, Inc., Equity One Credit Corporation, First Union Home Equity Bank, New Jersey Mortgage and Investment Corporation, and Provident Bank.
At the time of his guilty plea, Sanders admitted that the appraisals prepared by his firm contained false information and grossly inflated statements regarding the value of the properties and that he knew Hutchinson intended to submit these appraisals to commercial lenders to obtain mortgage loans secured by the properties.
It is further alleged, that equipped with the fraudulent appraisals, Hutchinson, Upcher and Wattley turned to mortgage originators, including David Myers, to apply for loans on the properties from various lenders. In Court on Monday, May 13, Myers admitted that he completed and submitted a residential loan application to First Union Home Equity Bank on behalf of Wattley that contained false information that would be relied upon by the lender.
Hutchinson and Upcher are fugitives and believed to be in hiding. Individuals with information concerning their whereabouts are urged to contact the Attorney Generals Investigations Bureau in Buffalo: (716) 853-8540; or the Special Investigations Unit of the State Police (716) 851-2317.
The case is being prosecuted by Assistant Attorneys General James Morrissey and Diane LaVallee under the supervision of Deputy Chief William Comiskey of the Criminal Prosecutions Bureau. The investigation is being conducted by Investigator Harold Frank of the Investigations Bureau and Investigator Robert Sulecki of the New York State Police, Special Investigations Unit.
Allegations contained in the indictments are merely accusations and the defendants are presumed innocent until proven guilty.