A St. Charles man has been indicted on four counts of mail fraud and eight counts of wire fraud after an investigation into an alleged fraud scheme to obtain more than 20 residential mortgage loans totaling roughly $8.5 million from various lenders.
Steven Klebosits, 40, of St. Charles, who owned SNAP Holdings LLC, was one of seven people indicted Tuesday. Klebosits, along with business partner Thomas Hyland, 40, of St. Charles, were both indicted on mail and wire fraud.
The FBI indictment says the mortgages were obtained to finance the purchase of properties primarily in Englewood and West Englewood in Chicago by buyers who were fraudulently qualified for loans while the defendants profited, according to a news release from the FBI. Lenders and their successors experienced losses because the mortgages were not fully recovered through sales or foreclosures.
According to the indictment:
Between March 2007 and November 2008, all seven defendants and others allegedly schemed to obtain the fraudulent mortgages by making false representations in loan applications, supporting documents, and HUD-1 settlement statements concerning the buyers’ income, employment, financial condition, source of down payments, and intention to occupy the property.
As part of the scheme, Klebosits and Hyland allegedly sold properties at inflated prices to buyers whom they knew were fraudulently qualified for mortgage loans. Klebosits, Hyland, Cardone, Strever, and Abate recruited buyers to purchase properties from entities, including SNAP Holdings, owned by Kelbosits and Hyland, knowing that the buyers would be qualified through false statements made to lenders, the indictment alleges.
Klebosits and Hyland allegedly provided funds to buyers, including through Strever, Allan, and Abate, knowing that the funds would be falsely represented to the lenders as the buyers’ down payments. Using false closing documents, Klebosits and Hyland concealed from lenders that they had provided the funds used for down payments and inflated the purchase prices, thus causing lenders to finance transactions for buyers who were actually contributing little or no equity, according to the indictment.
Each count of wire fraud and mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory, according to the FBI. If the defendants are convicted, the court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater.
In addition to Hyland and Klebostis, the FBI said others indicted in the scheme include:
- Joseph Natalizio, 39, of Bloomingdale, a licensed loan originator and the president and co-owner of JNC Mortgage Inc., which operated as United Mortgage Services in Addison. He was charged with two counts of mail fraud and five counts of wire fraud.
- Diomede Cardone, 32, of Addison, also a licensed loan originator who worked at United Mortgage Services, was charged with two counts of wire fraud.
- Jason Strever, 30, formerly of Sandwich, who owned JMS management Corp. He was charged with one count of mail fraud.
- Joseph Abate, 48, of Downers Grove, who owned APJ Consulting Inc. Abate was charged with two counts of mail fraud and one count of wire fraud.
- Yusef Allan, 31, of Chicago, a licensed loan originator who owned Silver Key lending and Investment Group LLC, in Orland Park, was charged with one count of mail fraud.
The defendants will be arraigned in U.S. District Court. Arraignment dates have not been set.