Connecticut Postings

Stamford Accountant Jose I. Flores, 50 of Fairfield Avenue, admitted Wednesday in federal court to participating in a four-year-long mortgage fraud scheme.
According to U.S. Attorney Nora R. Dannehy, Flores submitted “accountant letters” containing false information related to borrowers incomes and other financial data to mortage lenders in order to secure residential real estate mortgages.
Dannehy’s office did not reveal the names of the lenders who were defrauded or the real estate agent and mortgage broker who was also involved with this scheme.
According to the U.S. Attorney, Flores was paid $100 a letter. Flores was working for Harvard Financial Services at the time. He has pleaded guilty to one count of conspiracy to commit wire fraud.
He faces up to five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. He is to be sentenced on April 9.
Between 2004 and leading into 2008, some lenders were providing loans that required only this letter to confirm a borrower’s income rather than the actual W2s or other financial documents.
These types of loans were created for the self-employed or people who worked on commission, who might otherwise not appear to qualify on paper for a loan. But druing the excesses of the recent real estate boom, some unethical brokers and lenders were using these loans for more people than they should because it was easier to get the loans.
The terms of these loans, including pre-payment penalties, interest rates that reset at a very high rate after one or two years, have pushed thousands of Connecticut residents into foreclosure, including those that still have jobs. Bridgeport has been particularly hard hit.
The U.S. Attorney’s Office did not release information on what area Flores and his alleged co-conspirators operated.
The scheme is still under investigation.