IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division UNITED STATES OF AMERICA ) Crim. No. 1:09mj 4 1 \ v. ) MARIA E. CONRAD, ) Defendant. ) AFFIDAVIT IN SUPPORT OF CRIMINAL COMPLAINT AND ARREST WARRANT I, Postal Inspector Joshua D. Mehall, being duly sworn, depose and state as follows: I. Introduction 1. I am employed as a Postal Inspector of the United States Postal Inspection Service and have been so employed since February 2007. Since May 2007,1 have been assigned to the fraud team at the Washington Division, Merrifield Domicile, Merrifield, Virginia. Through my training and experience, I am familiar with investigations involving mail and bank fraud and the criminal misuse of the mail in conducting mortgage fraud. I have received training and gained experience in interviewing and interrogation techniques, arrest procedures, search warrant applications, and the execution of searches and seizures. I have personally been the affiant for federal arrest and search warrants. 2. This affidavit is submitted in support of an criminal complaint and arrest warrant charging Maria E. Conrad with conspiracy to commit mail and wire fraud in violation of Title 18, United States Code, Section 1349. 3. The facts and information contained in this affidavit are based on your affiant's personal knowledge and observations made during the course of this investigation, information 1
conveyed to me by other law enforcement personnel, information provided by cooperating witnesses and a review of records and documents including business, governmental and other records. Your affiant has not included every fact known to him about this investigation, but rather only those facts which are sufficient to establish probable cause. II. Details of Probable Cause 4. Evidence gathered indicates that the owners and operators of a mortgage brokerage company E-Star Lending, located in the Eastern District of Virginia, knowingly conspired with each other and others to engage in a scheme to defraud mortgage lenders. The conspirators prepared false and fraudulent mortgage applications to assist buyers in qualifying for mortgages. Many of the properties purchased by the various buyers with the proceeds of these fraudulently obtained loans were sold by coconspirators. After purchasing the properties, the buyers frequently defaulted on the mortgages. The lender institutions lost substantial sums of money because the buyers purchased the properties with 100% financing and at inflated prices. 5. The defendant, Maria E. Conrad, was employed by a tax preparation company, Nicatax and Services, located in Alexandria, Virginia, within the Eastern District of Virginia. 6. At the request of loan officers of E-Star Lending, the defendant, Maria E. Conrad, prepared false and fraudulent letters stating that the company she worked for had prepared the tax returns of individuals whose mortgages were being brokered by E-Star. These letters claimed that the individuals had earned income through self employment. In actuality, these individuals were not so employed and their taxes had not been prepared by the defendant's company. 7. The letters were material to the conspiracy as CPA tax verification letters were capable of influencing the decisions of some mortgage lenders, including Greenpoint Mortgage, in determining whether or not to make a mortgage loan. I interviewed a former outside sales
representative and account executive with Greenpoint who stated that CPA letters for loan customers were required to indicate that the CPA had reviewed the customer's tax returns for the past two years, that loans for self-employed customers would not be approved without the CPA letter, and that the CPA letter would "make or break" loans for self-employed customers. 8. I obtained the loan files from Greenpoint Mortgage for two loans used to purchase a property located at Bluebonnet Lane, Woodbridge, Virginia. Among other items, the file included a mortgage application and a CP A/tax preparer letter from the defendant, both of which indicated the borrower was self-employed as a chef. The tax preparer letter was signed by the defendant, Maria Conrad, confirmed the borrower's self-employment, and stated that Conrad's company had completed the taxes for the borrower for the previous two years. 9. I interviewed the borrower who had applied for the mortgage and showed him the tax letter. The borrower had never heard of Nicatax and Services or Maria Conrad and never had the employment as claimed in the letter and the mortgage application. The property located at Bluebonnet Lane, Woodbridge, Virginia, was eventually foreclosed upon. 10. On May 29,2008, federal search warrants were executed by law enforcement simultaneously on the home of Gohar Mirza, a co-owner of E-Star Lending, and a branch of E- Star Lending. The Mirza residence contained more than 200 loan files brokered by E-Star Lending beginning in May 2005, and ending in April 2008. Preliminary indications are that more than eighty-percent (80%) of these files contain false statements. In excess of twenty of these files contain letters purportedly prepared by Maria Conrad on behalf of Nicatax and Services. 11. In addition to the borrower for the property on Bluebonnet Lane in Woodbridge, Virginia, identified above, I have interviewed several borrowers whose loan files were obtained from the search of the Mirza residence and which contained CP A/Tax Preparer letters prepared
by Conrad. To date, none of the borrowers interviewed whose files contained these letters actually had their taxes prepared by Conrad or Nicatax and Services. 12. Gohar Mirza has pleaded guilty to a conspiracy to engage in mortgage fraud. I have interviewed Gohar Mirza several times, including October 1,2008, and on November 4, 2008. I have also been advised of the results of an FBI interview of Gohar Mirza on November 12,2008. In summary, regarding Nicatax and Services, Mirza said Nicatax provided false CPA/self-employment tax letters to get loans for customers. Mirza explained that many banks require a two-year tax history letter for self-employed mortgage loan applicants. Mirza stated that Conrad charged $300 for the Nicatax self-employment letter and that the letters are completely false. 13. I interviewed Maria Conrad and she told me she worked as a tax preparer at Nicatax and Services, a business located in Alexandria, Virginia, within the Eastern District of Virginia, from approximately 2004 through 2007. I showed Conrad a copy of the letter prepared for the borrower for the Bluebonnet property. Conrad did not specifically remember the letter but confirmed her signature and tax preparer number were on the letter. Conrad indicated the letters she prepared were given to customers to prove that they were self-employed. 14. In a subsequent interview with Conrad, she admitted to preparing letters on behalf of employees of E-Star Lending. Conrad would get the information to be used in the letter from an employee of E-Star Lending. Conrad told me she knew the individuals whom the letter claimed had their taxes prepared at Nicatax and Services had, in fact, not had their taxes prepared at Nicatax and Services. 15. Conrad also told me she received between $100-S200 per letter from her coworker, and employees of E-Star Lending. Conrad told me she was paid by cash. Conrad also
told me sometimes the money was deposited directly into an account in her name at Bank of America. 16. I have reviewed Bank of America records for an account ending in #3178, held in the name of Maria E. Conrad, and have observed multiple deposit items from E-Star Lending or its owners or employees. These items, all payable to the defendant, include but are not limited to: One check for $400 dated May 11,2006, drawn on an E-Star Lending account with the memo line stating: "letters for Marquez and Narvaez" and a check for $500 dated November 6, 2006, drawn on an E-Star Lending account; Five checks, each for $200, dated June 2, June 8, June 13, August 3 and September 23,2006, drawn on an account of one of the owners of E-Star Lending; Two checks for $400 dated June 27 and August 8, 2006, drawn on an account held in the name of one of the owners of E-Star Lending; Two checks for $600 dated June 21, and July 5,2006, drawn on an account of one of the owners of E-Star Lending and one check for $800 from the same individual dated October 12, 2006; One check dated October 4, 2006, drawn on an account held by an employee of E- Star Lending for $400. The following handwritten note appeared on the memo line of the check: "CPA Accounting." 17. During the search of the E-Star Office in Annandale, Virginia, law enforcement seized a folder labeled "FedEx." Included in this folder are copies of over 150 FedEx labels indicating mailings from E-Star to various lenders. Based on my training and experience, I know that mortgage brokers typically send loan applications and supporting documentation to lenders using the U.S. mails or one of numerous private commercial carriers including FedEx. Based on my review of the FedEx labels found in the search, I believe E-Star lending sent loan applications and supporting documentation to letters using the U.S. mails or private commercial carriers.