The president and founder of a now-defunct Massachusetts-based mortgage company was charged with defrauding Ginnie Mae to the tune of $3 million.
Robert Pena, 67, was arrested Thursday and indicted in a U.S. district court on conspiracy and wire fraud charges. Each charge carries a maximum sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.
Pena's company, Mortgage Security Inc., was contracted with Ginnie Mae to pool residential mortgage loans and then to sell the Ginnie-backed bonds to investors, the U.S. Attorney's Office for the District of Massachusetts said, citing court documents. MSI also serviced the pooled loans and was intended to place the funds collected through servicing into accounts held in trust by Ginnie Mae.
The indictment alleges that Pena diverted the funds collected from borrowers by depositing large loan payoff checks into secret accounts that were hidden from Ginnie Mae. He then purportedly used those funds for personal and business use.
Similarly, the U.S. Attorney's office claims that he redirected borrower escrow funds and mortgage insurance premium for his own use.
Through his alleged actions, Pena gathered nearly $3 million, which Ginnie Mae had to pay itself to investors. Pena covered up his actions by allegedly providing false reports to Ginnie Mae about the loans in question.
Pena could not be reached for comment.
This is not the first time Pena's actions through his company have come into question. The Massachusetts Commission of Banks agreed to a consent order with MSI in 2011 and issued a temporary cease and desist order in 2013. Additionally, MSI's license was revoked in Rhode Island in 2009, and a settlement agreement with the New York Department of Financial Services over acting without a surety bond was also on the books.
