Developer pleads guilty to $64-million mortgage fraud

by Jordan Maxwell17 Jul 2015
A real estate developer in Miami is facing hard time after defrauding investors out of $64-million in a mortgage fraud scheme, according to the U.S. Attorney’s Office for the Southern District of Florida.

Hector Hernandez, 57, and Aleida Fontao, 62, and Olga Hernandez, 58, each pleaded guilty to conspiracy to commit wire fraud after the trio falsified loan documents that were made to look like the applications were valid.

Hector Hernandez owned Coral Gables-based mortgage company Great Country Mortgage Bankers, which specialized in Federal Housing Administration insured mortgage loans.

According to court reports, most of Great Country’s potential borrowers didn’t qualify for FHA loans, leading Hernandez and Fontao to instruct employees to falsify documents while the duo would also offer borrowers cash incentives to purchase condo units in Hector Hernandez’s properties.

A large portion of the borrowers defaulted on their loans, resulting in losses to the FHA of at least $64 million. Hector Hernandez agreed to relinquish $8 million as part of his plea, according to the U.S. Attorney’s Office.

Hernandez also owned and operated Great Country Title Services, a title company that closed mortgages loans, primarily for Great Country Mortgage Bankers, according to a court document.

Hernandez was an owner or member of corporations that owned and/or managed properties including Pompano by the Sea, a condo development on Northeast 12th Street in Miami; Dadeland Place, a condo development on Southwest 77th Avenue in Miami; San Marco at Fontainebleau, a condo development on Fontainebleau Boulevard in Miami, according to an article in the Biz Journal. 
 

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