On November 22, 2013 the FBI reported that a 25-count superseding indictment was unsealed charging five (5) defendants–Rosita Vilchez, 39, of Lima, Peru; Armando Pino, 53 of Centreville, Virginia, currently in Peru; Edgar Vilchez, 38, of Manassas, Virginia; Lorene Chittenden, 57, of Centreville, Virginia; and Rico Benavides, 28, of Manassas, Virginia–with conspiracy to commit bank fraud and wire fraud affecting a financial institution and operating a continuing financial crimes enterprise.

The indictment, which is approximately 54 pages in length, details how all five defendants are implicated in the broader conspiracy to commit bank fraud and mail fraud (Count One, 18 U.S.C. 1349), and how the defendants are also alleged to have violated separate substantive offenses such as operating a continuing financial crimes enterprise (Count Two, 18 U.S.C. 225) and bank fraud (Counts Three through Twenty-Five, 18 U.S.C. 1344).

Specifically, Rosita Vilchez is alleged to have violated Counts 1 through 10; Armando Pino is alleged to have violated Counts 1 through 10; Edgar Vilchez is alleged to have violated Counts 1 and 3 through 10; Lorene Chittenden is alleged to have violated Counts 1, 3, and 5 through 25; and Rocio Benavides is alleged to have violated Counts 1 and 4.

The indictment alleges that Rosita Vilchez and her brother, Armando Pino, operated a real estate firm (Vilchez & Associates), a title insurance company (Pino Title), and the branch of a loan brokerage business (Mount Vernon Capital Corporation) in Manassas, Virginia, as a continuing financial crimes enterprise. According to the indictment, the defendants and their co-conspirators submitted fraudulent loan documents that falsified their real estate clients’ income, employment, and assets so that they could obtain loans to buy property through Vilchez & Associates, which received commissions of as much as six percent of the selling price of every home. Many of these transactions involved loans that allegedly were originated fraudulently by Lorene Chittenden, a loan officer who, according to the indictment, received thousands of dollars in loan commissions as a result of the fraud.

The indictment also alleges that the defendants targeted Hispanic clients who were not proficient in spoken or written English and who therefore often were unable to read and were unaware of the false statements made on the loan documents submitted to the lenders on their behalf. According to court filings, the fraudulent loan applications made it possible for the borrowers to qualify for loans they could not afford to repay. Most of these borrowers later lost their homes to foreclosure.

The indictment was filed by the Alexandria Office of the U.S. Attorney’s Office for the Eastern District of Virginia. According to the press release, at least two of the defendants are believed to be in Peru. The United States will likely seek the extradition, or formal transfer, of these two defendants from Peru with the assistance of the Peruvian government. This formal transfer will likely be pursuant to the Mutual Legal Assistance Treaty signed by both the United States and Peru. Defendants should engage defense counsel early to represent their rights during any extradition proceedings or otherwise attempt to negotiate favorable plea terms in exchange for a voluntary transfer.

Given the complexity, breadth, and scope of the alleged conspiracy, defendants may also benefit from legal arguments separating them from the broader conspiracy or arguments proving that the broad conspiracy, as alleged, does not actually include the activities of some of the defendants. Separating oneself from the conspiracy may (1) limit exposure for purposes of sentencing, (2) may limit exposure for purposes of forfeiture, which is alleged to be over $4 million, and (3) may limit legal liability for the actions of co-conspirators performed in furtherance of the conspiracy. And all defendants would benefit from hiring counsel with experience litigating complex frauds and handling cases with large amounts of documents, as this case will undoubtedly entail.

Defendants may also benefit by cooperating early by providing substantial assistance into the prosecution of other unindicted co-conspirators or assisting the government in its apprehension of fugitive defendants. However, pursuing such assistance is not without its legal consequences, which will include pleading guilty to a substantial fraud. Given that this alleged scheme to defraud involved over $7 million, victimized at least 10 people, and used sophisticated means, the U.S. Sentencing Guidelines recommends a sentencing range of 78-97 months for defendants who plead guilty early.

This post is authored by Ferrari & Associates, P.C., a law firm specializing in federal criminal defense matters. Feel free to contact us at (202) 280-6370 or info@ferrariassociatespc.com.

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