Mortgage Scheme is “Most Sophisticated and Arrogant Fraud” Judge David O. Carter Has Seen

Jared Tornow, 34, of San Clemente, was sentenced this morning to nearly six years in federal prison for what U.S. District Judge David O.
called one of the most sophisticated and arrogant frauds
he has ever seen.

According to court documents, Tornow fraudulently provided mortgage services
from 2001 until 2006 through several companies, including Orange-based Lucrativo Real Estate
Solutions, soliciting home buyers and assisting them in obtaining mortgages,
often by submitting fraudulent paperwork to lending banks.

During the last two years of the scheme, Tornow worked with Mikhail Kosachevich, who  pleaded guilty last year to conspiracy to commit mail fraud and
money laundering.

According to a statement issued today by the FBI, which joined the Internal Revenue Service and U.S. Postal Inspection Service in investigatating Tornow, Kosachevich and a third man, Jeffrey Gerken:

As a part of the scheme,
Tornow and others inflated borrowers' income and assets on loan applications, leading
lenders to believe that their clients were creditworthy. In an effort to substantiate the
false statements made on the loan applications, Tornow and others fabricated W-2
forms, paycheck stubs, bank statements and other documents. Relying upon the false
statements made on loan applications by Tornow and others, lenders issued more than
$40 million in residential loans to Tornow's clients. When a number of the properties
went into foreclosure, the banks suffered losses of more than $7 million.

Tornow and his co-schemers received hundreds of thousands of dollars in
commissions and payments from loans that were funded based upon their false
statements and submission of fraudulent documents to lenders. Tornow concealed his
commission income from the Internal Revenue Service and failed to pay more than
$300,000 in federal income taxes. Tornow, who had been ordered not to work in the
mortgage industry by California authorities about 10 years ago, used the names of
legitimate brokers when he submitted loan packages to lenders. To cash the
commission checks he received in the name of licensed brokers, Tornow created
fictitious business names that were similar to the companies whose names appeared
on the checks, and then cashed the commission checks at a check-cashing business.

Carter sentenced Tornow to 70 months in federal prison on the tax
evasion, mail fraud and credit card fraud charges. The schemer was also ordered to return to
court March 3 for a hearing to determine the amount of restitution he will be ordered to pay to
victim lenders.

Kosachevich and Gerken, who already pleaded guilty to conspiracy to commit
mail fraud, go before Carter for sentencing on Jan. 25. Kosachevich faces up to 25 years in federal prison and Gerken could get five years behind bars.

Leave a Reply

Your email address will not be published. Required fields are marked *