September 13, 10

NEWS / Alleged Fraudster Indicted in $1.8 Million Mortgage Fraud Scheme

GREENBELT, MD—A federal grand jury has indicted Darryl Stanley Paxton, Jr., a/k/a David Sosa, age 34, of Broward County, Florida, formerly of Maryland, on charges of wire fraud, money laundering, and fraudulent use of a Social Security number in connection with a scheme to defraud lenders of over $1.8 million, using a false identity. The indictment was returned on July 14, 2010 and unsealed today upon the arrest of the defendant in Broward County, Florida, on state charges there.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.

According to the 15-count indictment, between 1997 and 2007 Paxton utilized the identification, including the Social Security numbers of a man and woman, both of whom had the initials DEB. During that period of time, Paxton began to use the fictitious identity, David Sosa, creating or obtaining a fraudulent Virginia driver’s license purportedly issued on May 12, 1999, in the name of David Sosa. Paxton also created or obtained Georgia and District of Columbia driver’s licenses in the name of David Sosa and on June 23, 2003, was issued a Maryland driver’s license in that name.

The indictment alleges that from September 2005 through August 2007, Sosa obtained over $1.8 million in loans from four lenders by submitting fraudulent loan applications, including a fictitious name, a misappropriated Social Security number, false information about his employment, income, address and ownership of real estate. According to the indictment, Paxton utilized a portion of the loan proceeds to repay part of the previous loans, but left most of the loans substantially unpaid.

For example, by submitting a fraudulent loan application, Paxton allegedly obtained a loan for $620,000 to purchase a property in Cockeysville, Maryland, then repaid that loan with the proceeds of a $1.4 million loan and a $420,000 loan he fraudulently obtained from another lender to refinance that property. The indictment alleges that Paxton then defaulted on those loans, causing a loss to the lender of $900,000.

The indictment alleges that through this scheme, Paxton fraudulently obtained over $2.85 million in loans and caused losses to the lenders of over $1.8 million, which is the amount the government seeks to forfeit.

The indictment further alleges that Paxton used the proceeds of the loans for his personal benefit, including the purchase of a Lamborghini and other luxury automobiles, as well as purchases at Nordstrom, Neiman Marcus, The Plastic Surgery Center, the Big Screen Store, and others.

Paxton faces a maximum sentence of 30 years in prison for wire fraud; a maximum of five years in prison for fraudulent use of a Social Security number; and a maximum of 10 years in prison on each of five counts of money laundering. Paxton is detained on state charges in Florida pending his transfer to U.S. District Court.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.;

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at www.justice.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein thanked Assistant U.S. Attorney Mara B. Zusman, who is prosecuting the case.

http://baltimore.fbi.gov/dojpressrel/pressrel10/ba091010.htm