$2.5M Fraud Lands Falmouth Mortgage Company Founder In Prison

FALMOUTH, MA — The president and founder of a now-defunct mortgage company in Falmouth was sentenced to prison Tuesday for defrauding the government out of $2.5 million, according to the U.S. Attorney's office.

Robert Pena, 69, ran Mortgage Security, Inc. (MSI), which contracted with government-run corporation Ginnie Mae to pool eligible residential mortgage loans and sell Ginnie Mae-backed mortgage bonds to investors. MSI was responsible for servicing the loans in the pools it created, including collecting principal and interest payments from borrowers, as well as loan payoffs, and placing them into accounts held by Ginnie Mae, the USAO said.

Ginnie Mae would ultimately pass those funds along to investors. The corporation required issuers like MSI to provide regular reports concerning the status of the loans in the pools.

Starting in 2011, Pena began diverting money sent by borrowers to MSI, according to the USAO. He deposited high-dollar, loan-payoff checks into bank accounts unknown to Ginnie Mae and then used those funds for personal and business expenses. Pena also diverted borrowers’ escrow funds and mortgage-insurance premiums for his own use, the USAO said.

In total, Pena took approximately $2.5 million, which Ginnie Mae then had to pay to investors whose investments it had guaranteed.

Pena attempted to cover up his scheme by providing false reports to Ginnie Mae about the status of the loans MSI was servicing, the USAO said. These false reports made it appear that the loans were still in repayment.

Gilda Andrade, who worked for Pena at MSI and helped him file false reports with Ginnie Mae, cooperated with the government’s investigation and pleaded guilty to a misdemeanor charge of making a false statement to the U.S. Department of Housing and Urban Development. Andrade was previously sentenced to one year probation and ordered to pay $108,240 in restitution to Ginnie Mae.

Pena pleaded guilty to one count of conspiracy and six counts of wire fraud in October 2017. He was sentenced Tuesday to 32 months in prison, two years of supervised release and ordered to pay $2.5 million in restitution to Ginnie Mae.