Mortgage Fraud Scheme Leads to Arrest of 7 Florida Residents

Seven Florida residents have been arrested in connection with a mortgage fraud scheme based in a remote development near Cashiers, NC.

Federal mortgage fraud charges against the seven defendants include conspiracy to commit bank fraud and wire fraud and multiple bank fraud offenses. Reportedly, the ring leaders of the mortgage fraud scheme are Domenic Rabuffo, 77, from Miami, and his ex-wife Mae Rabuffo, 74, of Fort Lauderdale. Also indicted are Raymond E. Olivier, 52, and Curtis Allen Davis, 51. Others indicted were Diane M. Hayduk, 64, of Miami, an administrative assistant to Rabuffo, and Lazaro Jesus Perez, 43, of Miami Lakes, who is accused of furnishing bogus accountant letters to support mortgage applications. SunTrust loan officer Victor Miguel Vidal, 48, of Miami, has been indicted for assisting with the mortgage fraud loan applications.

The seven defendants  have been accused of using shell companies and straw buyers to purchase lots for a development called Hampton Springs, which sits atop Big Ridge, a popular resort area for Floridians traveling to North Carolina in the summer.

Domenic Rabuffo reportedly purchased land in the area and put most of it in his ex-wife’s name. Reportedly, the defendants used the lots for fraudulent loan applications to get construction mortgages, valued at almost $50 million, between 2003 and 2008. They applied for and received fraudulent loans from several banks, including Bank of America, Wachovia, SunTrust, and Regions Bank. Most of the mortgage fraud loans have been foreclosed by the banks.

Rabuffo is no stranger to mortgage fraud indictments. He is a former New York resident who served prison time for mortgage fraud in the 1990’s, and became a federal informant for a time regarding mortgage fraud schemes.

Both Rabuffo and Vidal, who helped shepherd false loan applications through the banks, are being held in federal custody pending a hearing the week of January 20th. All other defendants have been released on bond.

Mortgage Fraud Charges in South Carolina

Mortgage fraud is the misrepresentation of information or the omission of information on a mortgage application in order to obtain a loan or obtain a higher loan offered by the lender had they known the truth.

While “flipping” properties is legal, it becomes illegal when a nominee or straw buyer buys the property.  A nominee/straw buyer is one who buys the property for another person because the other person already has loans out on other property. If the nominee/straw buyer defaults on the mortgage, which was the case for many with the downturn of the economy, the investor may face charges of fraud for using deception to obtain the loan.

Mortgage fraud is a serious offense with stiff penalties. If convicted of mortgage fraud, you could face upwards to 30 years in prison and harsh penalties.

The Strom Law Firm Can Help with Mortgage Fraud Charges

At Strom Law Firm, LLC, our federal criminal defense attorneys provide comprehensive legal services designed to protect your rights and your interests. Our lawyers are licensed in South Carolina, New York, and Georgia. Even if you feel your involvement in the mortgage fraud scheme was minor, you may still face charges. We understand what is at stake, which is why we will fight aggressively for your name and your reputation. Call the South Carolina Criminal Defense Lawyer at the Strom Law Firm today for a free case evaluation. 803.252.4800.