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Financial Crimes
02/25/2014

Operation Paper House nets 20 arrests for bank fraud, money laundering

SAN JUAN, Puerto Rico – Twenty individuals, including ringleaders, straw buyers, sellers, real estate agents and an accountant were arrested Tuesday in 10 different municipalities of Puerto Rico for bank fraud and money laundering. The charges stemmed from a scheme to obtain money from mortgage lending institutions and resulted from an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the FBI, the Internal Revenue Service and U.S. Housing and Urban Development.

"These arrests are a reflection of the success that comes when federal, state and local law enforcement agencies work together to target criminal organizations and individuals in Puerto Rico," said Angel Melendez, special agent in charge of HSI San Juan. "At HSI, we follow the money trail to identify, disrupt and dismantle the most complicated financial schemes and seize criminal assets. We will continue to aggressively investigate fraudulent financial schemes that put in jeopardy the integrity of our financial system and are often a gateway to further criminal activity."

As part of the fraudulent scheme, the defendants purchased properties through straw buyers by obtaining mortgage loans from federally insured financial institutions in amounts substantially exceeding the sales price of the properties. The defendants would receive the excess amount of the loans. Then, they would default on payment of the monthly mortgage premiums.

In order to ensure loan approval, the participants of the conspiracy created and submitted false supporting documentation such as financial statements, bank statements, employment verification letters and tax returns, among other items, with the loan application.

According to the indictment, the defendants aided and abetted each other and knowingly made false statements to various financial institutions to obtain mortgage loans. The financial institutions are Banco Santander de Puerto Rico, Doral Bank, Banco Bilbao Vizcaya Argentaria, and RG Premier Bank of Puerto Rico.

Arrested individuals include: Lina Prestol-Rodriguez, Jose Santana-Aponte, Carlos Velez-De Jesus, Angel Torres-Maymi, Brenda Mercado-Rodriguez, Marilyn Melendez-Prestol, Johanna Rivera-Benitez, Carlos Solis-Guzman, Jose Luis Negron-Molina, Alexander Cifuentes-Ramos, Carlos Ortiz-Davila, Eduardo Cora-Colon, Gabriel Branda-Collazo, Ricardo Santiago-Verdecia, Marco Antonio Ambert-Torres, Jose Rafael Mora-Nazario, Angelica Alvarez-Castañeda, Sheila Benabe-Gonzalez, Adelinzy Grace-Vazquez and Awilda Diaz-Cabrera.

Prestol-Rodriguez, the leader of the fraudulent scheme, is also charged with conspiracy to commit money laundering. Prestol-Rodriguez and her co-defendants engaged in a series of financial and monetary transactions, some in excess of $10,000 in criminally derived property, to conceal bank fraud and false statements on loan applications in order to unjustly enrich themselves and eliminate existing debt obligations.

The defendants face up to 30 years in prison and fines up to $1 million.