Susan Alt Sentenced to Nine Years in Prison for 14.7 Million Dollar Mortgage Fraud Scheme
Alt Pleaded Guilty to 31 Felony Mortgage Fraud Offenses
CLEVELAND, OH – December 20, 2010 – (RealEstateRama) — Cuyahoga County Prosecutor Bill Mason and the Cuyahoga County Mortgage Fraud Task Force operating under authorization of Ohio Attorney General Richard Cordray and Ohio’s Organized Crime Investigations Commission announced that Susan Alt was sentenced to nine years in prison and ordered 2 million dollars in forfeiture.
Alt and the four main co-defendants below secured $14,766,515 in fraudulent loans to purchase seven homes in Cuyahoga, Ottawa, and Lucas counties. Six of the seven houses fell into foreclosure.
Prosecutor Mason said, “Using her extensive experience in the banking and real estate industry in California, she orchestrated this 14.7 million dollar mortgage fraud scheme. Her guilty plea to 31 felony mortgage fraud offenses represents the successful, collaborative effort of the Mortgage Fraud Task Force to combat the rampant mortgage fraud in this region.”
Susan Alt, 58, of Thousand Oaks, CA, was the mastermind of the fraud committed in the purchasing of seven homes by enlisting the defendants named below. Alt used her “shell” company, Equator Group, to funnel and launder money to and from these defendants, thereby deceiving the lender. She used the fraudulent document “Irrevocable Order to Pay” to defraud sellers into thinking this was a relocation fee. It was a scheme to inflate the sale price, launder money through various accounts, and ultimately steal money out of the deals. Many of the pertinent documents used to implement the deals were forged by Alt.
The defendants’ enterprise consisted of submitting fraudulent loan applications to lenders in order to qualify for exorbitant loans. They engaged in fraudulent down-payment schemes. Despite the very high sale prices, the buyers did not make down-payments on the purchases of the Chagrin Falls and Gates Mills houses or on the North Windward house in Port Clinton. In addition, the buyers were reimbursed by Susan Alt for their down payments on the North Carriage Lane, Ridgewood Road and both North Island Circle properties. This was deceptive to the lenders who based their loans, in part, on the buyers’ equity in the purchases. The defendants also fraudulently disbursed money at closing to others involved in the fraud.
The defendants collectively stole $3,001,232.26 from buying and selling the seven houses, selling three of them twice, for a total of 10 sales. In addition to the sales, the defendants defrauded the lender by taking out four fraudulent equity loans on the houses. Alt stole in excess of $2.2 million.
On July 6, 2010, Susan Alt pleaded guilty to 31 felonies: one count of engaging in a pattern of corrupt activity (F1), seven counts of theft by deception, seven counts of falsification, seven counts of additional money laundering prohibitions, three counts of tampering with records, one count of forgery, three counts of theft by deception, and two counts of securing records by deception.
1. Deborah Brazalovics, 58, of Wickiffe: Brazalovics was the agent for the title company, Home Star Title. The HUD-1 forms that she prepared and sent to the various lenders on these deals were fraudulent. Monies that were indicated as coming from the buyer were never part of the deal. Additionally, she accepted and processed the “Irrevocable Order to Pay,” which essentially gave Alt authority to launder and steal money out from the deal at closing. Brazalovics thus facilitated the payments to the Equator Group—money that really belonged to the sellers. There was no indication on the HUD-1 or Homestar Title Company’s Receipt/Disbursement Ledger what the expenditure was for. On April 21, 2010, Brazolivics pleaded guilty to 20 mortgage fraud offenses. On August 2, 2010, Brazolivics was sentenced to the Ohio Reformatory for Women for 1 year.
2. Charlotte Gill, 40, of Southwest Harbor, ME: Gill was employed at Century 21 Homestar and represented the buyers as the real estate agent on the various deals that involved Susan Alt. She was the conduit/broker between Alt/Equator Group, Century 21 Homestar, and Homestar Title. On June 21, 2010, Gill pleaded guilty to 14 mortgage fraud offenses. On August 3, 2010, Gill was sentenced to 5 years community control sanctions.
3. Joanne Schmidt, 57, CA: Schmidt was Alt’s primary “straw buyer” on many of these deals. She signed the 1003-Uniform Residential Loan Application, which contained fraudulent information concerning her income, employment and assets. Further, she falsely indicated that she would be re-locating to these various properties. Schmidt received fraudulent wire transfers, or kick backs, from the monies illegally disbursed to Alt and the Equator Group. On April 21, 2010, Schmidt pleaded guilty to 12 mortgage fraud offenses. On August 2, 2010, Schmidt was sentenced to 5 years community control sanctions.
4. Diane Marciel, 49, of Woodland Hills, CA: Marciel was an associate of both Schmidt and Alt while serving as a Notary Public for various documents on these transactions. As a result of her participation, she received kick-backs from Alt and the Equator Group. Marciel was also listed as a tenant on several fictitious leases indicating she was renting Joanne Schmidt’s house from her. The rent money that she was allegedly paying was represented to the lenders as part of Schmidt’s income. On June 21, 2010, Marciel pleaded guilty to 6 mortgage fraud offenses. On August 3, 2010, Marciel was sentenced to 5 years community control sanctions.
Both Century 21 Homestar and Homestar Title Agency are located in the same suite of offices at 23625 Commerce Park Boulevard in Beachwood.
The investigation was conducted by the Cuyahoga County Mortgage Fraud Task Force. The Task Force is comprised of federal, state, and local law enforcement agencies. The director of the Task Force is a Sergeant of the Cuyahoga County Sheriff’s Office.
Contact:
Ryan Miday, Public Information Officer, (216) 698-2819,
cell (216) 299-9326 or
http://prosecutor.cuyahogacounty.us.
