Loan scam hits dozens

Investigators describe victims across Florida, then five arrests.

By IVAN PENN, Times Staff Writer
Published July 20, 2007

Patricia Griffin sits on the porch of her East Tampa home that she took a second mortgage out to pay for repairs and remodeling. Little did she know that she was a victim of a construction and mortage fraud scheme that duped dozens of mostly low-income and poor homeowners out of millions.
	[Times photo: Julia Kumari Drapkin]

ADVERTISEMENT [Times photo: Julia Kumari Drapkin] Patricia Griffin writes a check out to make a payment on her life insurance. With the porch left rotting and the remodeling and construction of her home unfinished, Griffin was left saddled with a 30-year mortgage to pay. [Handout] This flyer was used to attract customers in connection with a construction and mortgage fraud scheme that duped dozens of mostly low-income and poor homeowners out of millions of dollars.

TAMPA - A rash of complaints started landing on the desks of fraud investigators at the Tampa Police Department three years ago.

Low-income homeowners complained that contractors promised home improvements they did not deliver.

Investigators Michael Mitcham and William Darrow determined that unlicensed contractors were behind the scam.

They were about to make arrests when they heard from Robert Robillard of the Hillsborough Consumer Protection Agency. Investigators there had been getting similar complaints, and Robillard suspected something bigger, involving bad construction and fraudulent mortgage loans.

On Thursday, law enforcement investigators announced that they had found dozens of victims across Florida and fraudulent activity in at least 31 residential mortgage loans totaling almost $3-million.

They said they had uncovered an elaborate scheme that involved everything from creating phony pay stubs to bribing employees at one of the nation's largest mortgage lenders.

The conspirators fleeced poor, mostly minority people, several of them in the wake of Hurricane Charley, investigators said. The suspects treated themselves to trips to "play and party" in South Beach and Las Vegas, gambling and paying for strippers.

They said the ringleader used some of the money to buy his wife a $16,000 engagement ring.

It all started unraveling when people like Patricia Griffin, a Hillsborough County library assistant of 22 years, didn't listen to her gut.

* * *

Her debts mounting, Griffin faced foreclosure in April 2004, when she found a flier on her front door from a company called Florida Beautiful Construction Management.

Griffin needed home repairs but feared it was a scam. "I had all these shysters who said they could do this, that and the other."

The company promised to secure her a new mortgage loan that would free her from foreclosure and pay for repairs to her rotting porch, deteriorating windows and old floors.

She didn't sleep that night. It was too good to be true. But she signed up anyway.

Griffin got a $50,000 loan, though she didn't learn until later just how she got it. She never had control of the money.

Workers from Florida Beautiful started the renovation project but walked off, never to be seen again. They left rot, windows unattached to the house, the wood porch unfinished and an incomplete paint job.

"I was just a really angry black woman, tired of being taken advantage of," said the 54-year-old Griffin.

She filed complaints with the city of Tampa and Hillsborough County. As similar complaints came in, certain names kept popping up.

Darrow, one of the original investigators, said one name stood out: "A lot of victims identified Mr. Almeida."

* * *

Back in 1998, during a search of Scott Anthony Almeida's home in Tampa, authorities found 2 kilograms of cocaine. He admitted the cocaine was his, and it was for distribution.

In a plea agreement in November 1998, he pleaded guilty to possession with intent to distribute cocaine and was sentenced to two years in prison plus four years of supervised release.

After his release in April 2001, his lawyer asked a judge to end the supervision early.

"Mr. Almeida's post-sentencing behavior has been exemplary," attorney Timothy Fitzgerald wrote in a motion.

"Since his release from prison, Mr. Almeida has become a productive member of society, and is currently employed as a mortgage broker supervisor with Advanced Mortgage Solutions. ... Mr. Almeida's efforts to redeem himself ... are truly exceptional."

The judge terminated the supervision in April 2004.

Now investigators allege that Almeida, 31, concocted much of the new scheme fresh out of prison.

Almeida went into business with Frank Scott Giffone, 32, and Bradford Chase Peck. Their companies included Giff Inc., Priority One Title Services and Advanced Mortgage Solutions and Florida Beautiful Construction Management Inc.

Investigators say the three men used those businesses and others to carry out the construction and mortgage fraud.

Todd Foster, Almeida's lawyer, said Thursday that he had not seen the charges.

"I just have to see what the allegations are and respond," Foster said. "Scott Almeida will be pleading not guilty to this, I can tell you that."

* * *

When Hurricane Charley blew through Florida in August 2004, it damaged Andrew Lawrence's roof in Bartow.

A retired Polk County schoolteacher who also coached high school basketball and football, he didn't know how he would get the roof fixed. His house was paid for, but he owed taxes and was tight on his fixed retirement income.

On Aug. 18, 2004, just days after the hurricane passed, Florida Beautiful Construction reps contacted him.

They offered to repair not only his roof, but to replace the windows and doors, repair his carport and paint his house.

They started the job but disappeared weeks later, with almost $20,000 that was secured through a loan against the house he has lived in since 1959.

"It tore me up," Lawrence said. "I didn't think I could be had."

Because Florida Beautiful is based in Tampa, Lawrence was referred to Hillsborough consumer protection.

With complaints coming from Pinellas, Lee, Orange, Broward, Miami-Dade and Monroe counties, investigators widened the net. Ellen Wilcox, a fraud investigator with almost 30 years with Florida Department of Law Enforcement, was called in because of her expertise in residential mortgages.

Investigators contacted the lender, Argent Mortgage, a division of Orange, Calif.-based ACC Capital Holding Corp., one of the nation's largest mortgage lenders.

Argent executives flew private jets from California to Tampa, arrived at investigator's offices in limousines and pledged their full cooperation.

They provided investigators with loan applications that helped make the case that two employees with Argent in New York had approved fraudulent paperwork.

Griffin's mortgage files were typical. Loan documents were filed without her knowledge. They said she worked for Apollo Health in St. Petersburg, at a monthly salary of $2,490.83.

There were W-2s from Apollo Health and documents purportedly signed by her.

The documents were faxed with the identifier "SCOTT ALMEIDA."

Griffin told investigators she had never seen the documents and that she never worked for Apollo Health.

Argent approved a $50,050 loan for Griffin and wired the money.

Griffin did not receive the money directly. She said she was told that after settling the loan, she was to sign over funds, almost $18,000, to Florida Beautiful for the home repairs.

Three days after the money was wired, Florida Beautiful issued checks of $2,750 to Almeida, $2,250 to Peck and $3,000 to Adrienne White, 37, who worked as a loan processor for Almeida.

Investigators say Almeida paid off two Argent employees, Orson Benn, 36, and Samuel Green, 27, to approve loans even though they knew supporting documents were fake.

Benn and Green's positions included account managers and a vice president of production.

Investigators say Almeida and Giffone paid Benn some $30,000 and that Almeida and Giffone netted over a half-million dollars in broker fees and construction money.

Last July, investigators questioned Benn about accepting fraudulent documents from Almeida.

Investigator: "It's an obvious fraud, isn't it?"

Benn: "There's no big -- you're right."

Investigator: "And you accepted it."

Benn: "... I turned a blind eye to it."

Investigator: "... You accepted a document, knowing it had been modified, knowing that because you told Scott, 'It's not enough money,' he fixed it and sent it back. ..."

Benn: "Correct."

On Wednesday, after three years of piecing together their investigation, authorities arrested Almeida, Giffone, White, Benn and Green. There is a warrant for Peck's arrest.

All six are charged with racketeering and conspiracy. Almeida, White and Benn are also charged with grand theft. Almeida and White are also charged with obtaining a mortgage by false representation.

Argent has moved to assist victims and refund money. Benn and Green are no longer with the company.

"We take fraud matters very, very seriously," said company spokesman Chris Orlando. "We have a zero tolerance for fraud."

The troubles with the Argent- funded loans could not come at a worse time for the mortgage industry, which is reeling from foreclosures that are largely the result of failed loans given to consumers with subpar credit.

"The ripple of effects of what we are alleging here in West Florida are enormous," Robillard said. "Every consumer may be adversely affected by this.

"You have fraudulent loans. The effect of these loans being bad is felt on Wall Street. It is felt in the housing market. ... Nobody likes a bad loan."

Times staff writer Jeff Testerman and researcher Angie Holan contributed to this report. Ivan Penn can be reached at ipenn@sptimes.com or 727 892-2332.

Tips to avoid a scam

Before securing a mortgage

- Check the property sales history, the license and complaint records for the mortgage broker and contractor.

- Be suspicious of lenders or brokers who guarantee loan approval regardless of your credit history.

- Make sure you understand all required disclosure documents.

- Before you sign the loan papers, have a lawyer, family member or friend go over them with you.

- Never sign a document with blank spaces. If you have any doubts, don't sign.

Hiring a contractor

Avoid:

- An offer to do a job at a reduced price because they've "just done a job nearby and have materials left over."

- Blank contracts with no street address, telephone number or contractor's license number.

- A refusal to give a written estimate.

- A request that the homeowner pull the building permit.

- Contractors who come to your door unsolicited. If something goes wrong, you would have no way to track them down.

Do:

- Verify that the home improvement company or person has a valid contractor's license by calling your county's construction licensing board. The Department of Business and Professional Regulation also provides a Web site to check on state licensed professionals at www.myfloridalicense.com.

- Search the department's database to check the complaint history of a business with the local consumer protection agency.

- Get estimates from at least two companies.

- Be cautious of home repair or improvement financing offers. If a contractor offers to arrange financing for your home repair project, shop around for financing yourself.

Source: Pinellas County Office of Justice and Consumer Services

[Last modified July 20, 2007, 00:40:05]