Convicted Criminal Charged in $1 Million Mortgage Fraud Scheme
Eight co-defendants accused of helping defraud numerous financial institutions in South Florida
TALLAHASSEE, FL – October 8, 2008 – Attorney General Bill McCollum today announced that his office has filed criminal charges against an active mortgage fraud ring in South Florida. Nine individuals, including the previously convicted Boca Raton ringleader, are charged with criminal racketeering, conspiracy to commit racketeering and multiple counts of grand theft. The criminal ring allegedly used straw buyers and shell companies to defraud various lenders out of at least $1 million.
The criminal charges, filed in the 17th Judicial Circuit by the Attorney General’s Office of Statewide Prosecution, name ringleader Johnson Cuffy and co-defendants Lillia Cuffy, Cliff Johnson, Joy Williams, Frumence Paul, Hans Jeanty, Lloyd Gelu, Paula Augustus and Charles Reynolds. Authorities believe the targets of the scheme were numerous financial institutions including SunTrust Bank, Wachovia Bank, Bank of America and General Motors Acceptance Corp. (GMAC).
Using his co-defendants as straw buyers, Johnson Cuffy would apply for mortgages from the various lenders, thereby obtaining properties by fraudulent means. Once the mortgage loans were secure, the co-defendants would pose as the property owners and request additional home equity lines of credit from the lenders. The participants kept portions of the proceeds and laundered the remaining funds through non-existent companies to Johnson Cuffy, who used his companies – BlueKap Financial and Capitol Investment Group – to disguise his financial dealings.
The case will be prosecuted by the Attorney General’s Office of Statewide Prosecution and was investigated by the Department of Financial Services’ Division of Insurance Fraud. Cuffy, who was serving probation in Broward County for second-degree grand theft related to mortgage fraud, has been taken into custody along with Lillia Cuffy, Paula Augustus and Charles Reynolds. The other co-defendants are being sought on active criminal warrants. If convicted, they could face sentences ranging from 24 to 420 years in prison.
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