ALEXANDRIA, Va.– A Virginia man was indicted by a federal grand jury for defrauding Virginia banks of nearly $3.4 million in fraudulent loans following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in Washington, D.C. along with FBI's Washington Field Office and the FDIC Office of Inspector General.
Osvaldo A. Mercado, 53, of Gainesville, Va. was indicted on conspiracy, six counts of bank fraud, two counts of mail fraud and two counts of fraud in connection with identification documents. If convicted, he faces a maximum penalty of 30 years in prison on each bank fraud count, five years on each mail fraud count and 15 years on each identification document fraud count.
According to the indictment, Mercado operated a tax preparation business, Union Hispana, based in Northern Virginia. Beginning in 2004, Mercado allegedly began helping clients secure personal mortgage loans by creating fraudulent tax letters stating that the borrowers had self-employment income and owned their own businesses. In fact, the borrowers often had low-wage jobs and could not afford the homes or qualify for the loans. As part of the scheme, Mercado's company also prepared fraudulent tax returns knowing that they were never intended to be filed with the IRS.
The indictment states that, based in part upon the fraudulent tax letters prepared by Union Hispana, Virginia banks approved more than a dozen personal mortgage loans to clients who were unemployed and lacked the ability to repay the loans. During the three-year scheme, these lenders were allegedly cheated out of $3.4 million in fraudulent loans.
Assistant United States Attorney James P. Gillis and Special Assistant U.S. Attorney Jessica R.C. Malloy are prosecuting the case.