Queens broker allegedly led a cash-out mortgage fraud using stolen identities and forged documents
A Queens real estate broker allegedly masterminded a scheme that used stolen identities and counterfeit government documents to extract a $688,403 cash-out mortgage on a Flushing home the defendants never owned.
Five individuals and three corporations now face grand jury charges following an indictment announced by Queens District Attorney Melinda Katz.
The alleged fraud unfolded in November 2024. Gui Li, 45, of Flushing, and an unidentified woman listed as Jane Doe allegedly impersonated the legitimate husband-and-wife homeowners at closing, presenting the title closer with fraudulent Pennsylvania driver's licenses and Social Security cards carrying the victims' personal information.
Tony Wanyiu Cheng, 56, a licensed real estate broker from Bayside, allegedly organized the scheme and was present at the closing alongside Chun Kong Lau, 46, of Staten Island.
"The defendants stole the identities of husband-and-wife homeowners, impersonated them at a closing and used fraudulent drivers' licenses and Social Security cards to take out a mortgage on the victims' home," DA Katz said.
"The scheme saddled the victims with a mortgage they did not authorize and allegedly cost a Queens lender more than $688,000."
How the money moved
The day after closing, Lau and Qiang Li, 59, of Flushing — using a fake Maryland driver's license bearing the male victim's date of birth — opened a joint account at the South Flushing branch of TD Bank.
More than $269,000 was subsequently routed into Cheng's personal and business accounts, which were held through three entities: CB Direct Store Inc., YW Capital LLC, and MTR Development Co. LLC.
The remaining proceeds moved into accounts with unknown connections to the defendants. The TD Bank account was closed in January 2025, and the legitimate homeowner reported the fraud to the Queens District Attorney's Office.
All five defendants face charges of residential mortgage fraud, identity theft in the first degree, forgery, and grand larceny.
Gui Li and Jane Doe remain at large, with a potential maximum sentence of 15 years on conviction.
What brokers should watch for
An estimated 0.86% of all mortgage applications showed fraud risk in Q2 2025, with cash-out refinances among the fastest-growing categories — up 22% year over year, according to Cotality's 2025 Annual Fraud Report.
The FBI's 2025 Internet Crime Complaint Center report recorded 12,368 real estate fraud complaints, with total losses of $275.1 million, from $173 million in 2024.
A similar broker-enabled identity fraud scheme in Southern California showed insider access at closings remains the most exploited vulnerability.
Matt Seguin, senior principal of fraud solutions at Cotality, previously told Mortgage Professional America: "Fraud for profit is only 20% of the time, but it's probably 80% of the losses."
For brokers, the warning signs surface early — if they know what to look for. Elise Kessler, counsel at Braverman Greenspun in New York City, advises professionals to treat unusual pressure to close quickly or out-of-state notarization as grounds for a hard stop.
Kessler told MPA: "Sometimes it's just a sense that there's something wrong. If the broker has that feeling, they should really look into it."
Michael Waldron, founding partner of Gate House Compliance, reinforced the value of judgment alongside technology.
"Trust your gut. It's the old smell test. Let's not let innovation take away common sense."
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