FOR IMMEDIATE RELEASE THURSDAY, SEPTEMBER 12, 2002 WWW.USDOJ.GOV CRM (202) 514-2008 TDD (202) 514-1888 WASHINGTON, D.C. The Justice Department announced the arrests today of five defendants in connection with a scheme to defraud various banks and mortgage companies in the Washington, D.C. area.
The arrests followed the unsealing of a 39-count superseding indictment returned on Sept. 6 by a federal grand jury in the District of Columbia. The indictment charges Tayo John Bode, Stephen Bola Akinkuowo, Olushola Akinleye, Sunday Yemi Adefehinti, and Florence Oluseyi Oloyede with racketeering (18 U.S.C. § 1962(c)), bank fraud (18 U.S.C. § 1344), wire fraud (18 U.S.C. § 1343), interstate transportation of stolen property (18 U.S.C. § 2314), and money laundering (18 U.S.C. §§ 1956 and 1957). Akinkuowo and Oloyede also are charged with mail fraud (18 U.S.C. § 1341) in connection with their scheme to defraud the Department of Housing and Urban Development.
The indictment charges the defendants with purchasing distressed or foreclosed properties at low prices and then re-selling (or "flipping") the properties to "straw buyers" at fraudulently inflated prices. According to the indictment, the defendants caused the unqualified straw buyers to apply for and obtain nine loans from mortgage companies and FDIC-insured banks. The defendants allegedly created and submitted false and fraudulent documents to make the straw buyers appear to have the ability and financial interest to repay the mortgage loans. The loans were used to pay the original owner for the real estate and to enrich the members of the criminal enterprise. As charged, the defendants would stop making mortgage payments, allow the loans to go into default, and cause the banks and mortgage companies to foreclose on the real estate. The indictment also charges that four of the defendants fraudulently received housing assistance payments from the Department of Housing and Urban Development (HUD) and the District of Columbia's housing program (DC Housing) by placing some of the "flipped" properties in HUD's Section 8 program. The defendants allegedly used aliases and other false and fraudulent information to obtain payments from HUD and DC Housing. The defendants are also charged with engaging in financial transactions which were designed to conceal their true ownership and control of the money. The total loss to HUD and the victim lending institutions is more than $1 million.
The case is being prosecuted by Patrick M. Donley, Senior Litigation Counsel for the Criminal Division's Fraud Section, and Fraud Section Trial Attorney Eric J. Beste. The case is one of several being jointly investigated and prosecuted by the Fraud Section of DOJ's Criminal Division and the Economic Crime Section of the U.S. Attorney's Office for the District of Columbia. 02-524
Source: US Department of Justice
