A federal grand jury
indicted mortgage broker Joshua S. Goldberg on Jan. 22, alleging he helped steal $2.5 million from various lenders through a mortgage-fraud scheme in Baltimore.
first outlined the scheme in 2008 ("Shell Game,"
, Oct. 1, 2008).
As the financial crisis worsened, Goldberg and his husband, Bayardo Alvarez, continued to get big mortgages and not pay them back ("Shells Hocked,"
, Jan. 13, 2010), applied for a federal loan modification ("Shelling Out,"
, July 7, 2010) and, in the summer of 2011, emigrated to Israel, where they made news when Israel's Interior Ministry declined to grant Alvarez citizenship under that country's "right of return" law, which promises citizenship to all Jews and their spouses. Alvarez's citizenship was eventually confirmed, though same-sex couples do not automatically get the same treatment.
According to the indictment, Goldberg, who controlled a "boutique" mortgage brokerage called Worthington Mortgage, conspired with neighbor Kenneth Koehler, appraiser David Christian (both of whom were charged last summer) ("Shells Shucked,"
, Aug. 15, 2012), and several others to obtain big loans that they would never pay back.
The indictment, which is a statement of charges and not of guilt, says Goldberg committed wire fraud by way of false and misleading appraisals, false HUD-1s (a key document in mortgage lending), "fictitious employment information, and false monthly income figures, which resulted in multiple loan defaults, foreclosures and loan losses to mortgage lending companies and financial institutions in excess of $2.5 million."
According to the indictment, Goldberg helped "co-conspirators A and B"-though unnamed in the indictment, these would be George and Emmanuel Agelakis, the brothers who sources indicate have since fled to their native Vancouver, Canada-scam the lenders by directing Christian to submit bogus appraisals, using interior photos of different homes, and claiming modestly appointed homes were opulently renovated.
The idea, allegedly, was to borrow much more than the houses were worth and divide the money among the co-conspirators. Christian's appraisals allegedly helped the group make lenders believe $100,000 houses were really worth $300,000.
The indictment also says Goldberg and Ken Koehler were partners in Voicebank, a tech outsource company that stopped operating around 2000 but was allegedly used to create false employment records for various borrowers so that lenders would think they were credit-worthy.
According to the indictment, Koehler sold three houses to George Agelakis and one to his brother, Emmanuel, and concealed "from the lenders the true purchase prices" by claiming to have received earnest money from the brothers that he never actually got. Koehler then kicked-back "a substantial part of the sales proceeds from each transaction back to [the] co-conspirators," the indictment alleges, "thereby further reducing the actual sales price of each property."
A press release from U.S. Attorney Rod Rosenstein's office says the prosecution is part of the Maryland Mortgage Fraud Task Force, which, in turn, is part of "President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes." The federal effort claims 10,000 cases against 15,000 individuals during the past three years, including 2,700 mortgage fraud defendants.
So far at least, no charges have been filed against any of the New York-based bank and hedge-fund CEOs, high-level traders, and others who made billions of dollars by bundling loans like those made by Goldberg into securities and selling them to unsuspecting buyers as AAA-rated bonds while simultaneously betting they would crater. As yet, the highest-level criminal prosecution has been of Lee Farkas, former CEO of Florida-based lender Taylor, Bean, and Whitaker, a lender Goldberg used in this scheme that collapsed in 2009, taking down Colonial Bank with it. Farkas, who bought a corporate jet and a fleet of exotic cars with the $38 million he allegedly stole from his company, was convicted of wire fraud and sentenced to 30 years in June of 2011. That was just about the time Goldberg and Alvarez moved to Israel.
"Goldberg faces a maximum sentence of 30 years in prison and a fine of $1 million for the conspiracy and for wire fraud affecting a financial institution," the release says, adding: "Goldberg is believed to be a fugitive."
If Goldberg and Alvarez are still in Israel, that may complicate his prosecution. Israel has not always allowed easy extradition of its citizens for trial in other nations-a fact that turned the murder prosecution of Samuel Sheinbein into an international incident in the late 1990s. Sheinbein eventually was tried and convicted in Israel, receiving a 24-year sentence. Asked what the next steps are in Goldberg's case, U.S. Attorney Office spokesperson Marcia Murphy emailed: "At this point we are continuing to investigate and will attempt to locate him."
Goldberg's father, Martin, a Florida mortgage broker, declined to talk to
Whereabouts of the Agelakis brothers, who have not been named in any of the cases, are unknown. Together, they briefly operated a diner downtown and face various civil and criminal bad-check charges.
"They fled the country, from what I know," says Nina Agelakis, George's ex-wife, adding that another relative said on Facebook that Emmanual was in Montana "or one of those northern states." She works at a hair salon and says the alleged scam and its fallout hurt her financially. "I lost my business, I lost everything," she says in a lilting Greek accent.
An internet search turns up a George Agelakis in Vancouver, British Columbia, who says he is the owner at "More Group," a company whose online profile says it is "a niche provider of finance and legal services specialising in the property sector."
If his LinkedIn account is to be believed, George Agelakis is now a mortgage broker.