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7 Florida residents charged in connection to North Carolina mortgage fraud scheme

Seven Florida residents have been arrested on multiple charges in a $49.6 million mortgage fraud scheme involving a remote mountain development near Cashiers, N.C.

Among those accused of conspiracy to commit bank fraud and wire fraud and multiple bank fraud offenses are Domenic Rabuffo, 77, of Miami and his former wife, Mae Rabuffo, 74, of Fort Lauderdale; Raymond E. Olivier, 52, of Land O'Lakes; and Curtis Allen Davis, 51, of Tampa. They are accused in a federal indictment with three others of using shell companies and straw buyers to purchase lots in a development called Hampton Springs. Each faces a maximum sentence of 30 years in prison and $1 million fine.

The land sits high atop a mountain at Big Ridge, about 10 miles north of Cashiers, a resort community that is a summer home for many Floridians.

The mysterious development was featured in a 2008 Tampa Bay Times story.

Together with SunTrust loan officer Victor Miguel Vidal, 48, of Miami, the defendants are accused of using fraudulent loan applications to get construction mortgages valued at almost $50 million between 2003 and 2008. The loans were made by Bank of America, Wachovia, SunTrust and Regions Bank. Most of the loans have been foreclosed by the banks.

Federal authorities are seeking forfeiture of land and buildings Rabuffo and the others own in Miami, Tampa, Land O'Lakes and North Carolina.

Rabuffo is a former resident of New York who served prison time and became a federal informant in a mortgage fraud case in New York in the 1990s. He bought the pristine mountain property and put most of it in his ex-wife's name. Residents of the area referred to Rabuffo as "the mobster,'' an allegation Rabuffo denied when interviewed by the Times in 2008.

U.S. Attorney Wifredo A. Ferrer released copies of the indictment late Friday after Rabuffo and others were arrested. Rabuffo and Vidal are being held in federal custody pending a hearing next week. All of the others were released on bond.

Olivier is a Land O'Lakes engineer who moved to North Carolina to manage the development. The federal indictment accuses Olivier and Davis of recruiting straw buyers to submit false loan applications to buy lots in the development. Vidal is accused of helping shepherd the loan applications through the various banks. He was fired by SunTrust after the scheme was discovered.

Others indicted were Diane M. Hayduk, 64, of Miami, an administrative assistant to Rabuffo, and Lazaro Jesus Perez, 43, of Miami Lakes, who is accused of furnishing bogus accountant letters to support mortgage applications.

Times researcher Caryn Baird contributed to this report.

7 Florida residents charged in connection to North Carolina mortgage fraud scheme 01/10/14 [Last modified: Friday, January 10, 2014 9:36pm]
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