Semiannual Report to Congress - HUD

gage Capital Resources. He also provided
borrowers with false documents in order
to obtain conventional loans while he was
employed at National City Mortgage.
In the same case, defendants Beth
Lanza, Gary Stephens, and Zina Sagona,
all loan officers, were sentenced. Lanza
received 27 months incarceration and 5
years supervised release and was ordered
to pay $333,375 in restitution. Stephens
received 10 months incarceration and 5
years supervised release and was ordered
to pay $148,249 in restitution. Sagona
received 2 years probation and was
ordered to pay $197,594 in restitution.
Lanza had previously pled guilty to count
7 of a second superseding indictment
charging her with wire fraud in the
furtherance of loan fraud. Stephens pled
guilty to count 2, charging him with
making false statements to HUD. Sagona
pled guilty to counts 1 and 14 of the
original indictment, charging her with
conspiracy to commit loan fraud and
making false statements to HUD. The
three defendants originated fraudulent
FHA-insured loans while employed at
Mortgage Capital Resources. Lanza
continued to originate fraudulent conventional
loans at National City Mortgage
after leaving Mortgage Capital Resources.
The defendants falsified income
and employment information for borrowers
including tax returns, pay stubs, IRS
W-2 forms, gift letters, and alternate
credit documents.
Thirty-two fraudulent FHA-insured
loans originated by the defendants have
been identified. Eighteen FHA loans
valued at $1.9 million have gone into
default, while all 18 of the conventional
loans have gone into default.
In Los Angeles, CA, in Federal
Court for the Central District of California,
defendant Carla Piza, owner of
Quality Home Investments, was sentenced
to 12 months incarceration and 36 months
supervised release for false statements
and wire fraud. Piza was also ordered to
pay $103,699 in restitution. As part of a
loan origination fraud scheme, Piza
located and recruited unqualified buyers to
purchase residential properties using
FHA-insured mortgages. In furtherance of
the scheme, Piza purchased cashiers’
checks, which were used to provide the
funds for the buyers’ downpayments, and
fraudulent loan documents such as IRS W-
2 forms, pay stubs, and credit letters. The
fraudulent loan documents were given to
other coconspirators and submitted in loan
packages for FHA insurance. In total, the
scheme caused $425,809 in fraudulent
loans to be funded with a resulting
$250,000 loss to HUD.
In Cleveland, OH, in Federal Court
for the Northern District of Ohio, defendant
Otis C. Bevel, Jr., was sentenced to 1
year and 1 day in prison and 5 years
supervised release and was ordered to pay
$121,325 in restitution, $23,500 to Wells
Fargo and $97,825 to Second National
Bank. Bevel pled guilty in June 2004 to one
count of mail fraud and three counts of
bank fraud for executing a scheme to
defraud Second National Bank and other
mortgage lenders through his two residential
real estate companies, Capital Realty
Group and Midwest Venture Realty, Inc.
Bevel provided false and fraudulent
financial documents to lenders in support
of loan applications for both conventional
and FHA-insured loans. Several of the
applications were in fictitious names.
False and fictitious Social Security
numbers, pay stubs, and tax forms were
also used, in addition to nominee or
Chapter 2: HUD’s Single Family Housing Programs 28