Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced today that Scott F. Smith, 48, of Patchogue, New York, Paula N. Smith, 43, of Patchogue, New York, and Jonathon “David” Sanders, 50, of Santa Rosa Beach, Florida, were convicted by a federal jury of bank fraud and conspiracy to commit money laundering as part of a mortgage fraud scheme on Friday, April 20, 2012. This case was investigated by the Florida Department of Law Enforcement and the State of Florida Office of Financial Regulation-Bureau of Financial Investigations.
…In late 2007, Sanders was in default by more than $35,000. Facing foreclosure, Sanders entered into a contract to sell his home to Scott Smith for a sales price of $1.862 million. A mortgage loan for $1.3 million was fraudulently obtained from WAMU for Scott Smith to purchase the May Drive home from Sanders. However, instead of paying off his loan, Sanders caused the money to be diverted to entities and individuals other than his mortgage lender. Thereafter, a series of financial transactions occurred, which resulted in Scott Smith, Paula Smith and Sanders profiting. As a result of the conspiracy, Scott and Paula Smith made at least approximately $85,657, in six months.
…The operation was organized by the Mortgage Fraud Working Group of President’s Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated effort to investigate and prosecute financial crimes.
Justice.gov press release link: here