Hey Tony, have you seen this one?

[Boris]

 Tuesday, June 24, 2008

Three OP men indicted for mortgage fraud
Feds allege ongoing fraud committed between 2001 and 2008

By BILL DWYER
Staff Reporter

Tuesday, June 24, 2008


Closed for good?: Donald Felton started this now shuttered business at 805 South Blvd. that housed his tax preparation service.
BILL DWYER/Staff


Samuel Shoshoo and Donald Felton Jr.
Felton's son, associate have had problems

Donald Felton Sr. isn't the only member of the family in the real estate business. Donald Felton Sr. recently deeded over operation of the printing business, and a North Side property, to his son, Donald Jr.

Donald Felton, Jr. and his business partner, Samuel Shoshoo, 35, operate a property management business, The Agency of Chicago, out of that house at 2013 Binghan St., Chicago.

State records show that both Felton and Shoshoo, "aka The Agency of Chicago," were fined $3,500 by the Illinois Department of Professional Regulation last August for unlicensed practice of real estate. "A pending application for a broker license shall be issued subject to a Reprimand," the fine notice stated.

On their website, the younger Felton states, "My experience stems from a home-based family business in Oak Park, my hometown, started by my family and I." Felton boasts he helped boost sales "from $50,000 to $200,000 in one year.

What Felton does not say is that he and the business his father founded seven years ago, Pro Print, located at 805 South Blvd., Oak Park, are being sued in Cook County Civil Court for $13,114 by Morlen Reality Corp. and Scoville Square Corp.

Ironically, the leasing agent for the building Pro Print operated out of is Keller Williams. That real estate office lists Donald Felton Jr.'s partner, Shoshoo, as an agent. Keller Williams responded to an inquiry about Shoshoo by giving his "direct line" to call.

Shoshoo has a history of legal problems and business failures. Between 1998 and 2001, Shoshoo operated at least one photography studio, Spotlight Studios, in Highland, Ind. According to news accounts in the Times of Northwest Indiana, Shoshoo's business was the subject of eight formal complaints with the Indiana Attorney General and 38 civil lawsuits filed by unhappy couples who allege Shoshoo bungled their wedding photos.

The Times said Shoshoo blamed his problems on the processing labs he used. He also blamed his financial problems on an employee who he said had passed a several of his company checks. However, the Times quoted a police investigator who stated that Shoshoo, who had filed a report, needed to submit copies of return fraudulently written checks and identify the person responsible, something he never did.

According to the Times, Shoshoo pleaded guilty in 1998 to a charge related to passing a bad check, received a 180 suspended jail sentence and was ordered to pay restitution. In 2001, the Times stated, the Lake County, IN prosecuter's office filed a misdemeanor count of check deception against Shoshoo.

In 2005, Shoshoo filed for Chapter 7 bankrupty protection, listing $3,800 in assets and over $90,000 in debts.

Two former and one current Oak Park businessmen were named in separate criminal indictments Thursday as part of a massive federal assault on widespread mortgage fraud.

The indictments, collectively referred to as Operation Malicious Mortgage, were part of a nationwide crackdown on mortgage fraud announced at a news conference, June 19, at the Dirksen Federal Building in Chicago. Locally, 67 individuals were charged and over 400 nationally.

All involved face prison sentences of up to 20 years per offense, as well as fines and asset seizure. The investigations, which officials stressed are ongoing, are being conducted by agents from the Department of Justice, the FBI, the IRS, the Postal Inspection Service, the Secret Service and the Department of Housing and Urban Development's Inspector General.

Accountant provided false documentation

Federal prosecutors contend in a 26-count indictment that Donald Felton Sr., 57, of 300 block of South Clinton Avenue, was one of 21 people who conspired to defraud numerous financial institutions and obtain property through fraudulent means between August 2004 and May 2008.

Felton, an accountant and tax preparer and proprietor of the Pro Print printing and T-shirt business at 805 South Blvd., was charged with one count of conspiracy and two counts of wire fraud for his alleged role in a widespread operation that fraudulently acquired $95 million in mortgages that cost banks $19 million in losses. Numerous homes were foreclosed on and resold for amounts less than the outstanding mortgage loan balance.

Prosecutors allege Felton and others aided the fraud scheme by providing a variety of false documents intended to support false statements made in loan applications regarding loan applicants' income and financial status. Among the documents Felton allegedly provided were bogus verifications of employment, accountant letters, verifications of rent, and leases and tax returns. The documents were created and submitted, the indictment alleges, "for the purpose of inducing the lenders to issue loans to individuals who were not always qualified for the loans."

Prosecutors, additionally, contend Felton engaged in wire fraud on two occasions, taking part in the transfer of $581,463 in funds for a fraudulent mortgage in May 2006, and arranging for the transmission of a fraudulent verification of deposit on another mortgage.

Wednesday Journal has not been able to contact Felton by phone, and his printing business remains closed. No one answered the door at his Clinton Avenue home late Monday afternoon.

A woman who called Wednesday Journal on Friday said Felton is her tax accountant, and that he still has copies of her 2007 income tax materials in his office. Upon hearing of his indictment online Thursday, the woman, who asked to remain anonymous, said she went to the Felton's business to retrieve her papers, but it was locked up.

She said she's unnerved to hear about mortgage fraud being committed with stolen social security numbers and other forms of personal identification. She said she confronted Felton at his home over the weekend, but he denied he was under indictment and refused to turn over her tax materials.

The woman, who said she works at Oak Park and River Forest High School and met Felton through his wife, said she had no inkling there might be a problem.

"He was very nice. He was professional," she said. "I never got any red flags from this guy," she said.

Hon family kept to themselves

In a separate federal indictment, a former Oak Park and River Forest resident was charged with 11 counts of defrauding several banks out of $2.5 million through the use of bogus buyers of houses, including a total of four in Oak Park and River Forest. In addition, he's charged with defrauding the U.S. Department of Housing and Urban Renewal out of $200,000 in rents paid on properties he had ceased to own.

Prosecutors say Jonathan Hon used straw purchasers to purchase a total of seven properties on the 200 block of Gale Street in River Forest, and three Oak Park houses on the 1000 block of South Kenilworth Avenue, and the 1150 blocks of South Wisconsin and Home avenues, as well as three Chicago properties.

Hon did so through Burnham Mortgage, Inc., of which he was the principal, officials say, "well knowing that these individuals were not the true purchasers and would not make the loan payments." Instead, Hon allegedly cashed checks totaling $570,000 in mortgage loans proceeds, and $1.9 million in title company checks intended to pay off lien holders, including various banks.

Burnham Mortgage was involuntarily dissolved in September 2002, according to the Illinois Secretary of State. Hon operated one of his companies, Lucid Muse Corp., on the 1000 block of South Kenilworth Avenue until its involuntary dissolution in 2005.

The Hons applied for village permits to do extensive interior and exterior renovations, then withdrew them. A large three-story oak staircase estimated to cost some $50,000 was all that Hons managed to finish prior to leaving town.

However Laura Maychruk, who bought the Gale Avenue home in 2005 with her husband Andrew, said the house was a mess as a result of the Hon's leaving literally in the middle of the night months prior. Pipes burst and food was left in refrigerators.

One police officer familiar with the case said the house "was a wreck," with dog feces everywhere. Maychruk said there continue to be echoes of the Hons' time in the house. She said Cook County Sheriff officers showed up at her door once looking for Jonathan Hon.

"I had to work to convince them we weren't them," said Maychruk with a nervous laugh, a task she said was made more difficult by the fact that, like the Hons, she and her husband also have four children.

"Jonathan Hon apparently got a speeding ticket in Ottawa, and they were sending the notices here when he didn't pay it," said Maychruk.

Creating condos out of empty basements

The third Oak Park businessman indicted Thursday, Jeff Trochowski, operated Lakeshore Financial Corporation out of offices at 503 S. Oak Park Ave. First U.S. Attorney Gary Shapiro singled out Trochowski and his alleged accomplice, Greg Sarwa, as being particularly audacious in scamming over $750,000 from various banks.

Shapiro said Trochowski and Sarwa used a variety of falsified documents, including bogus appraisals, to apply for loan applications on four supposed condominiums in the basement of a building on the 3200 block of West Polk Street on Chicago's West Side that didn't exist.

"It was an empty basement," said Shapiro. Prosecutors allege the two men also misrepresented improvements at a building on the 3100 block of West Lexington Street to obtain mortgage loans in a similar manner.

The first shoe dropped for Trochowski in August 2007, when the Illinois Department of Financial and Professional Regulation, which had been investigating Lakeshore Financial for some time, revoked the corporation's license after having found it "committed a violation of the Residential Mortgage License Act."

Last Thursday the other shoe fell.