September 30, 11

NEWS / Virginia Real Estate Businessman Sentenced to 10 Years in Prison for Mortgage and Investment Fraud S

WASHINGTON – Alexander Otis Matthews, a Virginia real estate businessman, was sentenced today to 10 years in prison in connection with mortgage and investment schemes to obtain more than $12 million in fraudulent loans.



The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Assistant Director James W. McJunkin of the FBI’s Washington Field Office and Special Agent in Charge Richard McFeely of the FBI’s Baltimore Field Office.



Matthews, 46, of Dunn Loring, Va., also was ordered by U.S. District Judge Liam O’Grady to forfeit $7.9 million, which represented the proceeds of the mortgage fraud schemes. In addition, Judge O’Grady ordered Matthews to pay $5,055,250 in restitution to his victims, including three lending entities and 12 private investors, and to serve five years of supervised release following his prison term.



Matthews pleaded guilty on July 15, 2011, in U.S. District Court in the Eastern District of Virginia to one count of bank fraud and one count of wire fraud. Matthews was charged with bank fraud on Nov. 17, 2010, in an indictment filed in the District of Maryland and charged with wire fraud on Feb. 17, 2011, in an indictment filed in the Eastern District of Virginia.



In his guilty plea, Matthews admitted that between November 2005 and May 2011, he orchestrated at least three mortgage fraud schemes in which he used “straw borrowers” with good credit scores to apply for and obtain nearly $11.5 million in fraudulent loans relating to three northern Virginia residential properties. Matthews did so by causing lenders to receive false and inflated income information about the straw borrowers, and Matthews submitted forged and fraudulent documentation to lenders purporting to verify that false information. After attempting to refinance the loans and forestall foreclosure, Matthews ultimately defaulted on the loans for each of the three properties.



According to court documents, from approximately September 2006 through July 2011, Matthews also engaged in a fourth, related scheme to obtain more than $1 million in fraudulent loans from at least 11 residents of Maryland and Virginia. Matthews obtained the loans by promising those individuals high rates of return over short periods of time in exchange for money that Matthews claimed he would invest in various property ventures. Matthews later defaulted on each of those loans, generally paying back no more than 10 percent of the borrowed amounts.



Matthews perpetrated his schemes through various purported real estate entities, including American Investments Real Estate Corporation (AIREC), AIREC Realty, Kibra Construction, Ezana Corporation and Farmville Group LLC.



According to court documents, Matthews continued his criminal behavior after his arrest and while under court supervision. In December 2010, Matthews mailed $1,000 to known witnesses he had been ordered not to contact, and in March 2011, Matthews filed a fraudulent bankruptcy petition using an alias. Similarly, in December 2010 and May 2011, Matthews submitted fraudulent documents to one of the lenders for his northern Virginia properties in which he forged the straw purchaser’s signature without authorization. In June 2011, Matthews was arrested and detained for these violations of his pretrial release conditions.



The case is being prosecuted by Trial Attorneys Ryan S. Faulconer and Peter A. Frandsen of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorney Jack Hanly for the Eastern District of Virginia. The case is being investigated by the FBI’s Washington and Baltimore Field Offices, with substantial assistance from the Montgomery County, Md., State’s Attorney’s Office and the Alexandria, Va., Office of the U.S. Trustee.



President Obama established the 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.

http://www.justice.gov/opa/pr/2011/September/11-crm-1286.html

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