Lucette Montane Surrenders for Wire Fraud

Former Fugitive from Operation Malicious Mortgage

December 20, 2009

CALIFORNIA NEWS -- Lucette Montane, a fugitive since June 2008, has been arraigned on an indictment in federal court on December 16, 2009, before Magistrate Judge Jan Adler. According to United States Attorney Karen P. Hewitt, Montane surrendered to Customs and Border Protection officials at the San Ysidro Port of Entry. Agents from the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation Division, arrested Montane based on a pending arrest warrant.

On July 18, 2008, a federal grand jury returned an indictment charging Montane and five others with devising a plan to defraud and to obtain money and property by false and fraudulent means, related to mortgage fraud. According to court documents, in 2005, Abner Betech, Said Betech and others started Creative Financial Solutions, Inc. ("CFS"), a mortgage brokering company located at 707 Broadway Avenue, Suite 1720, San Diego. CFS was in the business of sending loan application packages and other documents to lenders for review and funding. The court documents further allege that CFS did not fund loans, but instead received commissions from the lenders when the loans closed. The defendants were loan officers at CFS and in addition to the commissions, they received payments from lenders, sellers, and buyers when loans closed.

The documents also alleges that CFS obtained mortgage loans for unqualified borrowers by, among other things, concealing the true purchase price of the homes by submitting false purchase contracts; submitting false loan applications; intentionally concealing the fair market value of the home; using misleading appraisals; and submitting false bank statements and income documentation. In total, the victim lenders funded more than $16 million in loans on properties that have been foreclosed or are in the foreclosure process. The lenders have lost over $3.9 million, with potential losses in excess of $5.1 million, due to the fraudulent loans.

The criminal investigation of Creative Financial Solutions Incorporated is part of "Operation Malicious Mortgage," an ongoing nationwide law enforcement operation coordinated by the U.S. Department of Justice and the FBI to takedown mortgage fraud schemes. During the recent months of the operation, law enforcement has identified, arrested and begun prosecution of mortgage fraud violators throughout the United States. Moreover, from March 1,2008 to June 18, 2008, Operation Malicious Mortgage has resulted in 406 defendants charged in 144 mortgage fraud cases across the country in a nationwide sweep. Operation Malicious Mortgage is the most recent coordinated sweep in an ongoing law enforcement effort to combat mortgage fraud since Operation Continued Action in 2004 and Operation Quick Flip in 2005.

FBI Director Robert S. Mueller, III. said, "Operation Malicious Mortgage is a concerted, joint law enforcement and prosecutorial effort aimed at disrupting individuals and groups engaged in mortgage fraud. This operation is an example of our unified commitment to address this significant crime problem. The FBI will continue to direct investigative and analytic resources towards mortgage fraud and corporate securities fraud that threaten our nation's economy."

Operation Malicious Mortgage focuses on three types of mortgage fraud; lending fraud, foreclosure rescue schemes, and mortgage-related bankruptcy schemes. Lending fraud normally involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross misrepresentations about the borrower's financial status. Overstating the borrower's income or assets, using false or fictitious employment records or inflating property values are typical examples. Foreclosure rescue scams involve criminals who target legitimate homeowners in grave financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.

Finally, this case (08 CR 2387-W) is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division. Lucette Montane is charged with the following:

• Title 18, United States Code, Section 1349 (Conspiracy to Commit Wire Fraud) Maximum Penalties: 20 years incarceration, a fine of $250,000, three years of supervised release
• Title 18, United States Code, Section 1956(h) (Conspiracy to Launder Monetary Instruments) Maximum Penalties: 20 years incarceration, a fine of $250,000, three years of supervised release

An indictment itself is not evidence that Lucette Montane committed the crimes charged. She is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.

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