Massachusetts mortgage company founder jailed for defrauding Ginnie Mae out of $2.5 million

Servicing

The founder and president of a defunct Massachusetts mortgage company will spend nearly three years in prison after admitting to defrauding Ginnie Mae out of approximately $2.5 million.

Robert Pena pleaded guilty in 2017 to one count of conspiracy and six counts of wire fraud. Pena was the founder and president of Mortgage Security, a shuttered mortgage company based in Falmouth, Massachusetts.

According to the U.S. Attorney’s Office for the District of Massachusetts, Pena was sentenced this week to serve 32 months in prison, two years of supervised release, and ordered to pay $2.5 million in restitution to Ginnie Mae.

Pena was charged back in 2016 with diverting funds that should have gone to Ginnie Mae into accounts he controlled.

According to court documents, Mortgage Security was contracted with Ginnie Mae to pool eligible mortgages and then sell Ginnie Mae-backed mortgage bonds to investors.

As part of its role in the bond process, MSI serviced the loans in question.

Court documents show that starting in 2011, Pena began diverting money borrowers sent to MSI into private bank accounts, which he then used to pay for personal and business expenses.

Specifically, Pena deposited “high-dollar, loan-payoff checks” into bank accounts he controlled. Pena also took borrowers’ escrow funds and mortgage-insurance premiums for his personal use.

As a Ginnie Mae servicer, MSI was also required to provide the agency with regular reports about the status of the mortgages in the pools, but Pena attempted to cover up the scheme by giving Ginnie Mae false reports about the mortgages in question. Those reports made it appear that the loans were still in repayment.

In all, Pena took approximately $2.5 million from borrowers, which Ginnie Mae then had to pay to investors in those mortgage bonds whose investments the agency guaranteed. 

According to the U.S. Attorney’s Office, Gilda Andrade, who worked for Pena at MSI and helped Pena file the false reports with Ginnie Mae, cooperated with the government’s investigation. Andrade pleaded guilty in December 2017 to a misdemeanor charge of making a false statement to HUD, and was previously sentenced to one year of probation and ordered to pay $108,240 in restitution to Ginnie Mae.

Pena was facing a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.

Instead, he’ll serve 32 months.

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