Nsane Phanuel Ligate, 42, of Ashburn, Va., a real estate agent, and Cane Mwihava, 43, of Bowie, Md., pleaded guilty to providingfalse information about the properties' buyer and renovations.
The guilty pleas follow an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI); the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); the Housing and Urban Development Office of Inspector General (HUD) and the U.S. Secret Service, Baltimore Field Office.
According to their pleas, in 2008, Ligate and his co-conspirators – Gladyness Silaa, 35, of Bowie, and Larry Johnson, 57 – identified two properties for sale located at 424 and 444 North Patterson Park Avenue in Baltimore. Also at that time, Mwihava established a shell company called Xavier Engineering and Construction Company (XECC) to receive settlement disbursements for purported home renovations. With assistance from Ligate, Silaa acted as the real estate agent and Johnson acted as the buyer. Ligate, Silaa and Johnson included false statements in the loan applications for both properties regarding Johnson's employment, income, credit and assets. Mwihava and Ligate falsely inflated the purchase price of the properties by representing to lenders that repairs and renovations had been completed on each property by XECC, including installation of premium kitchen cabinets, granite countertops, stainless steel appliances and marble flooring. None of the purported renovations or repairs was in fact performed.
After the settlement of the properties, the settlement agent disbursed a total of $108,860 to XECC, the amount shown on false invoices submitted for the purported renovations. Mwihava then divided these funds between himself, Ligate, Silaa and Johnson.
On June 5 and 9, 2008, Ligate and Mwihava caused banks to wire transfer $181,159.65, and $179,866.93, respectively, to the title agent to complete the settlement transactions. These amounts were needed to fund the original loan amounts plus additional costs and fees associated with the closings.
As a result of the conspiracy, HUD, which insured the loan for 424 North Patterson Park Avenue suffered a loss of $164,090, and a bank which was the lender for the other property suffered a loss of $188,001.58.
The defendants face a maximum sentence of 30 years in prison and a $1 million fine before Chief U.S. District Judge Deborah K. Chasanow. Mwihava's sentencing is Oct. 14 and Ligate's is Oct. 16.
Silaa previously pleaded guilty to conspiracy to commit wire fraud and her sentencing is June 16. Johnson previously pleaded guilty to making false statements in a loan application and was sentenced Feb. 24 to eight months in prison consecutive to the current sentence he is serving on an unrelated case.
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 www.justice.gov/usao/md/Mortgage-Fraud/index.html.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
U.S. Attorney Rod J. Rosenstein commended the FHFA-OIG, HUD-OIG, Secret Service and HSI Baltimore for their work in the investigation.
The case is being prosecuted in the District of Maryland by Assistant U.S. Attorney Kristi N. O'Malley and Special Assistant U.S. Attorney Kevin DiGregory from the Federal Housing Finance Agency, Office of Inspector General.