Fannie Mae rep convicted in multimillion-dollar scam

by Ryan Smith20 Feb 2019

A former Fannie Mae employee has been found guilty of federal fraud charges for taking bribes and kickbacks.

Shirene Hernandez, 46, was convicted of two counts of wire fraud. Hernandez was a sales representative of Fannie Mae. As part of its operations, Fannie acquires properties through foreclosure and other methods, then manages and sells those properties. Since at least 2012, the profits of those sales, like all of Fannie Mae’s profits, have gone to the Treasury.

As a sales representative, Hernandez assigned Fannie-owned properties to real estate brokers and approved sales of the properties based on offers the brokers submitted. According to prosecutors, Hernandez approved sales of properties at discounted prices to brokers who paid her kickbacks. She also accepted bribes in return for listings and commissions that brokers earned on real estate sales.

Hernandez also assigned listings to family members, who received nearly $2 million in commissions in less than three years. The scheme netted Hernandez more than $1 million in benefits, including cash kickbacks and equity in property she obtained with kickback money, prosecutors said.

As part of the scheme, Hernandez purchased a Fannie-owned property in Sonoma, Calif., that she was responsible for selling. She rejected higher, market-price offers in favor of her own below-market offer. She purchased the property through intermediaries, selling it to a company affiliated with a broker who was bribing her, then having the broker transfer the property to her sister-in-law, who paid for it with a duffel bag stuffed with $286,450 in cash she had received from Hernandez. The property was rented out, with Hernandez pocketing the rental proceeds. The jury that convicted Hernandez also found that the Sonoma property – which is worth hundreds of thousands of dollars more than Hernandez paid for it – should be forfeited to the US government.

Hernandez will be sentenced in May. She faces up to 20 years in prison for each of the two felony counts.