Copyright 2002 The Buffalo News
Buffalo News (New York)
May 16, 2002 Thursday, FINAL EDITION
SECTION: LOCAL, Pg.B1
LENGTH: 827 words
HEADLINE: COUPLE SOUGHT IN $2 MILLION REAL ESTATE SCAM
BYLINE: SANDRA TAN; News Staff Reporter
BODY:
Venere Hutchinson and his wife, Dana Upcher, previously identified by The Buffalo News as the second-worst Housing Court offenders in Buffalo, have been linked to a complicated, $2 million real estate scam that defrauded at least five major lending institutions.
The Buffalo couple, who owned dozens of vacant and neglected East Side properties, is now believed to be in hiding. They are being pursued as fugitives on multiple felony charges of grand larceny and one count of "scheme to defraud" following a yearlong investigation by the state attorney general's office.
Four other people also have been indicted or made court pleas over the last week for their alleged role in the mortgage scam, including real estate appraisers and a mortgage originator charged with scheming to defraud and falsifying business records.
A "scheme to defraud" charge refers to a pattern of fraud that results in multiple victims suffering losses.
"This is a significant case, both in terms of the number of properties involved and the number of individuals involved in the scheme," said attorney general spokesman Paul Larrabee. "It involved a substantial sum of money, in this case nearly $2 million, which the banks are unable to recover, and properties, which are essentially worthless."
Hutchinson, 26, and Upcher, 30, were highlighted in The Buffalo News in July for being hauled into Housing Court for their city properties nearly three dozen times between 1996 and early 2001.
Back then, the couple, along with partner Rahmel Wattley, were suspected of buying properties from the Department of Housing and Urban Development for a few thousand dollars each, then making money by leveraging them for second mortgages as much as $100,000 higher than each property's assessed value.
Most of these East Side and Lower West Side "investment" properties sat empty and unsecured, contributing to neighborhood blight and attracting drug abusers and illegal dumpers.
Attorney general's office investigators, working in conjunction with the State Police, are now pursuing a legal case asserting that Hutchinson, Upcher and Wattley bought 40 depressed Buffalo properties for a total cost of $119,000, then submitted fraudulent paperwork with the help of unscrupulous appraisers and mortgage originators to obtain bank mortgages totaling more than $1.9 million.
The lending institutions victimized by the scam include Associates Home Equity Services, Equity One Credit Corp., First Union Home Equity Bank, New Jersey Mortgage and Investment Corp., and Provident Bank.
"A case like this is like building a brick wall, brick by brick by brick," said Assistant District Attorney James Morrissey, who worked the case from the Buffalo office. "There's no sudden revelation. It's just a concrete building process where you keep building the wall until a pattern starts to emerge."
Officials added that this case is fairly typical of a large-scale mortgage scam in which a buyer, property assessor and mortgage originator work together to rip off lenders. Originators typically work for licensed mortgage brokerages and file the initial loan application paperwork to submit to lenders.
"Each piece of this scheme required the other to support it," Larrabee said. "Without the appraiser and without the originator, the purchaser does not realize the benefits of the scheme."
Rahmel Wattley, 20, of Law-renceville, N.J., pleaded not guilty last week to the grand larceny and scheme to defraud charges.
Williamsville real estate appraiser Harry Sanders, owner of Sanders Appraisal Services and Select Appraisal Services, pleaded guilty Monday in State Supreme Court to a single scheme to defraud charge. He is scheduled for sentencing July 19.
Sanders lost his appraiser's license last year and was charged $6,000 in penalties and costs for providing overinflated appraisals for Robert Palano, a city landlord cited by The News as Buffalo's top slumlord a decade ago.
Sanders' employee, Dennis Walker, pleaded not guilty Tuesday to multiple charges of grand larceny and a single scheme to defraud charge.
Larrabee said Walker, 48, is accused of performing most of the questionable appraisals for the company, even though he is unlicensed to do appraisal work in New York State.
Walker could not be reached to comment Tuesday.
Mortgage originator David Myers, a 40-year-old Amherst resi dent, pleaded guilty Monday to a single count of falsifying business records, a misdemeanor. Myers was the originator of 29 of the mortgage loans for Hutchinson, Upcher and Wattley, Larrabee said.
Investigators said Myers knowingly provided false income informat ion to lenders to secure inflated mortgages for his clients.
As part of a plea agreement, Myers admitted in court Tuesday that he submitted a single falsified residential loan application to First Union Home Equity Bank on behalf of Wattley.
e-mail: stan@buffnews.com
GRAPHIC: Venere Hutchinson is wanted on felony grand larceny.
LOAD-DATE: May 18, 2002
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