Did shady characters scam lenders out of millions?
This is an update of a "Street Sweeper" column that ran on July 27, 2011.
On July 25, 2011, a federal Indictment was unsealed in the Southern District of New York against:
Those Defendants were charged in connection with a fraudulent credit-repair scheme, in which they falsely reported to credit bureaus inflated credit histories for thousands of individuals, enabling those individuals to get millions of dollars in loans from financial institutions and other lenders.
NOTE: The charges and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law
SIDE BAR: Consumer Reporting Agencies ( "Credit Bureaus" ): provide reports to third parties about the credit-worthiness of consumers.
Furnishers: Among the sources of information utilized by Credit Bureaus are entities that provide consumers with credit, e.g., credit card companies, automobile lenders, and department stores.
The Indictment alleges that in September and October 2007, and July 2008, respectively, the following businesses became Furnishers:
Allegedly, from 2007 through 2009, through Brooklyn-based Highway Furniture and, later, Hempstead-based New York Funding, and Defendants Jacquet, Mansour, Romeo, and Hudson engaged in a scheme to falsely and fraudulently improve the credit histories and credit scores of thousands of individuals. In furtherance of this fraud, the two entities and four Defendants falsely represented that the individuals were customers of Highway Furniture and New York Funding.
In exchange for thousands of dollars in fees, the Defendants allegedly provided credit bureaus with fictitious information showing that Highway Furniture and New York Funding had extended credit to the purported customers, and that those loans had been (or were being) repaid. Not being content with submitting fraudulent credit histories, the Indictment alleges that the Defendants falsely and fraudulently improved the credit histories and credit scores of some of the purported customers by deleting accurate, but negative, credit information maintained by the credit bureaus. The fraudulent misrepresentations facilitated the lending of millions of dollars from banks and other lenders to the purported customers.
Arrests and Charges
Defendants Mansour, Romeo, and Hudson were arrested but Jacquet remains at large. Each defendant is charged with one count of
Count One: a maximum sentence of 30 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense.
Count Two: a maximum sentence of 10 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense
On March 21, 2012, Jacquet pled guilty to one count of conspiracy to commit bank fraud.
On October 10, 2012, and October 18, 2012, respectively, Mansour and Hudson pled guilty and are awaiting sentencing.
On December 6, 2012, Jacquet was sentenced to 63 months in prison and three years of supervised release; and ordered to pay a$100 special assessment plus over $9.3 million in restitution. In determining sentence, the Court noted that this was Jacquet's third felony conviction.