New York builder, sons standing trial
By SAM GARCIA
1/27/2003

A group of mortgage brokers have been accused of using fraudulent loan packages to help a New York builder sell properties at artificially inflated prices.

According to court documents provided by the U.S. Department of Justice, the case involves $67 million in homes built by entities owned and operated by Robert A. Amico and sons Robert J. Amico and Richard N. Amico. Mortgages against the properties total more than $57 million. Prices paid for some of the individual properties exceeded $600,000.

Beginning around July 1994 and continuing to about January 2000, the Amicos built at least 170 residential homes in the Rochester, N.Y., area. The Amicos allegedly used no-down-payment schemes to attract buyers, with purchasers not being required to pay closing costs or attorney fees.

Many of the loans were run through Patrick McNamara, a mortgage broker and star witness for the government in the case against the Amicos. Using state-of-the-art computer technology and scanners, McNamara and the Amicos allegedly altered income and asset documents, created fake leases, and presented fraudulent loan applications to wholesale lenders.

Among the defrauded lenders were Bank of America FSB, Chase Manhattan Mortgage Corporation, Citicorp Mortgage Inc., Countrywide Home Loans, Inc., Flagstar Bank, FSB, GE Capital, Indy/Mac Mortgage Holdings Inc., Option One Mortgage Corporation, Standard Federal Bank, The CIT Group/Consumer Finance Inc., and Washington Mutual Bank.

McNamara, along with closing attorney Joseph Shramek and others, allegedly misled lenders by presenting documentation indicating down payments of up to 25% when, in fact, no down payments were being made -- and some of the purchasers were receiving cash back. Shramek represented both the Amico entities and the purchasers at most of the closings, and also represented the lenders at many of the closings. Shramek allegedly deceived the purchasers into signing the fraudulent closing documents.

McNamara and Shramek were officers of many of the entities owned by the Amicos. McNamara was the purchaser of more than one Amico home.

McNamara also used other mortgage brokers to obtain the approvals. Although required, the brokers did not interview the applicants and obtain supporting documentation directly from them. They included Capital Mortgage Network, Inc. (owned by defendant Debra Gilliatt), MFC Mortgage Company (managed by defendant Allan Peters), Lenders Choice Funding, Inc. (employer of defendant John DiNuzzo), Ambassador Group, Mitchell George & Associates, and Citi Mortgage Services, Inc.

The government said Gilliatt, Peters, and DiNuzzo knew the documentation they received from McNamara and the Amicos was false. According to case documents, the three earned extraordinarily large commissions from wholesale lenders by charging the buyers excessively high rates and collecting yield spread premiums.

McNamara and the Amicos allegedly duped appraisers by providing fake blue prints that inflated the square footage of the homes, purchase agreements which falsely stated that the purchasers had agreed to pay the inflated sale prices for the homes, and information regarding comparable sales of other Amico homes where property values had been inflated.

They also are accused of altering legitimate appraisals and creating fake appraisals using the fictitious appraiser names Kyle Rapke and Charles Carey.

In testimony against the Amicos, McNamara -- who pleaded guilty in the scheme -- said Robert A. Amico talked about fleeing the country when the massive mortgage fraud scheme began to unravel. The Rochester Democrat and Chronicle reported that McNamara testified the two visited cemeteries in Atlanta during March 2000 to obtain the names of people who had died young, which would help them obtain fake identification.

The Democrat and Chronicle also reported that McNamara has lied five times testifying against the Amicos.

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