Mortgage

Florida mortgage company owner gets 11 years in prison for leading massive fraud scheme

Defrauded HUD of $64 million, led to convictions of 24 individuals

The owner and operator of a Miami-area mortgage company will serve the next 11 years in prison after being convicted for his part in a massive fraud scheme that defrauded the Department of Housing and Urban Development and the Federal Housing Administration of more than $64 million.

Hector Hernandez, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers, a mortgage lender in Miami, was sentenced for conspiracy to commit wire fraud affecting a financial institution.

Earlier this month, Hernandez pleaded guilty to the charges, and was he also ordered to pay $64,508,141 in restitution and to forfeit $8,000,000 in illicit profits.

According to the Department of Justice, Hernandez, 57, was the owner and operator of Great Country from at least 2006 and continuing through at least September 2008.

Great Country specialized in approving Federal Housing Administration loans.

The loans issued by Great Country were primarily for buyers of condominiums at complexes where Hernandez was a part owner, but many of the buyers were unqualified borrowers, due to insufficient income, high levels of debts, and outstanding collections. 

Hernandez admitted to authorities that his company employed loan officers, loan processors and underwriters, whom he knew approved and submitted false and fraudulent FHA mortgage loan applications and accompanying documents to HUD on behalf of the unqualified borrowers.

These documents included false pay stubs, false verification of employment forms, and fictitious letters from the borrowers.

According to the DOJ, closing costs were paid on behalf of the unqualified borrowers through an interstate wire transfer of funds.

The borrowers were also paid to purchase the condominium units as an unreported inducement to purchase, the DOJ said.

After the loans closed, the loans were sold to financial institutions. When the unqualified borrowers were unable to pay their mortgages, they defaulted on the loans, which caused losses both to the financial institutions and to HUD.

Hernandez admitted that the loss from the fraudulent conduct was at least $64 million.

All in all, 24 individuals were charged and convicted for their role in the massive scheme, including loan officers, loan processors and underwriters.

In the same case, a real estate developer for Great Country, Aleida Fontao, 62, of Miami, was sentenced today to serve 41 months in prison, and ordered to pay $7,131,952 in restitution and $400,000 in forfeiture.

An underwriter for Great Country, Olga Hernandez, 59, of Lake Mary, Florida, was sentenced earlier this week to serve 51 months in prison and ordered to pay $24,512,755 in restitution.

Hector and Olga Hernandez both pleaded guilty on July 13, 2015, while Fontao pleaded guilty on July 7, 2015.

Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo Ferrer of the Southern District of Florida and Special Agent in Charge Nadine Gurley of the U.S. Department of Housing and Urban Development Office of Inspector General Atlanta Region announced the sentencing.

Most Popular Articles

With record-low mortgage rates, originators and real estate agents aren’t taking a holiday anytime soon

Low rates are making this summer one for the record books. Accordingly, loan officers, underwriters, real estate agents and those working in title and settlement offices are continuing to work the long hours that have become the norm since March. Not that they’re complaining.

Jul 02, 2020 By

Latest Articles

Is it worth it for lenders to reopen physical offices?

What are the mortgage industry’s plans when it comes to re-entry? Many in the industry believe that increased digitization of the industry lends itself well to remote work.

Jul 06, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please