BY LINDA BENTLEY | DECEMBER 26, 2012
Extradited Romanian fugitive facing mortgage fraud charges
PHOENIX – Upon being extradited from Romania, Daniel Morar, 42, of Suceava, Romania was arrested on Dec. 19, 2012.
Morar has been a fugitive since August 2009 when a federal grand jury returned a 25-count superseding indictment and an arrest warrant was issued.
With the assistance of a Romania translator, Morar was arraigned on Dec. 20, charged with six counts of wire fraud, one count of conspiracy to commit wire fraud, nine counts of money laundering, one count of conspiracy to commit money laundering and seven counts of false loan and credit applications.
Ten other defendants were also indicted as part of a mortgage fraud “cash back” scheme in which the investor or home buyer offered to purchase a property for more than the asking price and submitted contracts to the seller for the inflated price.
The sellers agreed to the sales because they were receiving their full asking price.
According to the August 2009 superseding indictment, real estate agents were often involved in the transaction and were aware of the inflated selling price.
Straw buyers, recruited by the investor to take out a mortgage and purchase a house in their name, were used to facilitate the cash back scheme. The straw buyers would not live in the house nor be responsible for the mortgage payments and were paid a fee in return for their services.
Morar, as the sole owner of D. Contractor Invest, Inc., a Nevada corporation formed in November 2006, along with the ten other defendants, devised the cash back scheme to purchase real properties with mortgage loan applications that falsely represented the buyer’s assets, income, mortgage debts, sources of intended down payment and intent to occupy the property as a primary residence.
Additionally, the parties concealed from the lending institutions payments to Morar, by intentionally withholding addenda or by omitting on the HUD-1 form that at the close of escrow a portion of the loan was paid to Morar.
According to the indictment, the purchase prices offered by Morar’s straw buyers exceeded the sellers’ asking prices by $55,086 to $180,000.
In order to purchase multiple owner-occupied properties, loan applications for each property were sent to different lenders at the same time so no single lender would be aware that any buyer was in the process of purchasing multiple homes.
The residences were represented to lenders as owner-occupied homes with fair market values ranging from $375,000 to $900,000, not investment properties.
The cash-back scheme was used by Morar to fraudulently purchase homes throughout the valley, including Phoenix, Scottsdale, Glendale, Peoria, Fountain Hills and Desert Hills.
In all, 26 homes went into foreclosure during the scheme, resulting in $6.5 million in losses.
U.S. Attorney John S. Leonardo said, “Morar’s arrest and extradition from Romania demonstrates we view crimes involving mortgage fraud seriously. Not only has mortgage fraud destroyed property values, lending institutions and entire neighborhoods in our communities, but it has also resulted in the loss of tax revenue and jobs. Those who engage in mortgage fraud for personal profit at the expense of the public should expect to be held accountable to the fullest extent of the law.”
The investigation was conducted by IRS-Criminal Investigations Division and the FBI, which worked with Romanian law enforcement officials to arrest and extradite Morar to the United States from Romania.
Morar is being detained without bond pending trial.
