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The South Florida house that became a fraud machine

Topic: Real Estate news

If South Florida was the capital of mortgage fraud, Victor Wolf's home was arguably the epicenter, churning out millions in ill-gotten loot.

For fugitives Victor and Natalia Wolf, the police poster tells the story: hundreds of victims from land fraud swindles across Florida totaling millions in losses.

But the couple's lasting legacy may be found in their most prized possession: their home.

In their final desperate days, the Wolfs managed to get a spate of sham mortgages slapped on their North Miami Beach house " creating 21 fake transactions " to squeeze millions from lenders before vanishing.

The wheeling and dealing " phony deeds, forged signatures and a straw buyer " has left investors fighting over who owns the stately waterfront house at the center of the couple's real-estate empire.

"It is mind boggling", said Fort Lauderdale attorney Roman Groysman, representing a burned lender in a battle over the home. "They did everything imaginable in the realm of fraud".

The legal drama in Miami-Dade circuit court offers a rare snapshot of one of the most egregious scams carried out on a single home in South Florida during the mortgage fraud crisis in a case that continues to confound even veteran real-estate lawyers.

In two instances, the Wolfs convinced lenders to give them loans against the home totaling $1 million even though they didn't own it anymore.

The case highlights the bevy of attorneys and agents who helped orchestrate the backroom deals without any resistance from regulators or law enforcement.

Two lawyers directly involved in the deals have since been criminally charged in other cases and disbarred, while a third is suspended from practice.

"A pit of vipers", said Brian Vodicka, a retired business professor who lost $915,000 in a Wolf deal in Texas. "They created so many dummy companies, they made it impossible for law enforcement to keep up".

Now fugitives, the Wolfs are accused of being part of an organized network of Russian nationals who carried out a string of land frauds in Florida and Texas that bilked 400 people, three banks and four other lenders of nearly $100 million.

LIONS AND STATUES

For years, the house surrounded by Roman statutes and two gilded lions served as the couple's residence when they launched their company, Sky Development Group, pledging to grow into one of the largest development firms in Florida.

For the Wolfs, the white, columned home in the 3200 block of 167th Street was a place to entertain and recruit investors.

There were cocktail parties at the home, and movies filmed in the backyard with young women showing up to be video taped, recalled a neighbor.

"There were big movie lights set up in the back", said William Dean, a former Miami-Dade assistant state attorney who lived two doors away. "There was a huge truck that was bringing all this movie-making equipment. I saw all these beautiful women walking to the front of the house. I can only guess what they were filming".

But two years after they launched a national advertising campaign to recruit investors, they began to run into trouble.

Initially, major loans were overdue to private lenders, and then the couple began bouncing checks.

By the time customers discovered deeds to their lots were fabricated, the Wolfs began to convert their house into an illegal cash machine.

First, Natalia Wolf received a $2.3 million loan from a Long Island, N.Y. company " G & G Property Investments LLC " securing the money by putting a mortgage on the house as well as other commercial properties the Wolfs owned.

Then two months later, she and Victor Wolf turned over ownership of the house to G & G "in lieu of foreclosure". But the scams didn't end.

Two weeks later, Natalia Wolf marched into a loan company and claimed she still owned the house, showing a bogus deed and title. In just days, she walked away with a $224,000 loan on the house from the lender, City First Mortgage.

Less than a month later, she did it again, going to her own lawyer, Hollywood attorney Ben Schulman, asking for a $725,000 loan.

Schulman agreed, turning over the money to her, and taking out another mortgage on the house to secure the money even though she didn't own it.

But it still wasn't over.

While the Wolfs were now launching a new development company in Texas, they continued to look for ways to make money from a house they didn't own.

This time, Natalia Wolf announced she was going to sell it " for $3.5 million " by concocting a phony deed and finding a 24-year-old straw buyer with a fake Michigan address.

The lawyer for the buyer: Richard Aronsky, 42, who has since been disbarred and was arrested last month on charges of stealing millions in home mortgages.

The loan broker arranging the deal: Globex Lending of Aventura, whose owners happened to be partners with Natalia Wolf in three Florida companies. But the bank rejected the deal because the price was grossly inflated.

With police on their trail, the Wolfs fled the country in late 2006 " leaving the ransacked house behind " but the flipping didn't end.

In the ensuing months, a new cast of characters would emerge in the home, adding even more confusion to the case.

Thirty-year-old Oleg Firer, a New Jersey resident who claimed to be CEO of a Wall Street bank, now moved into the house, saying he wanted to buy it. In addition, he said he had more than $1 million in his own bank.

But there was a problem: no such bank existed and when investigators called the bank number, they got an answering machine: "This is Joe", court records show.

Firer came back with another buyer, a 30-year-old Brooklyn resident who claimed he had $1.6 million in Firer's nonexistent Wall Street bank.

That deal, too, was thrown out.

By then, Miami-Dade prosecutors were tipped off to the home and launched an investigation that would lead to a bitter civil forfeiture fight between the prosecutor's office, Firer and G & G.

Not only did prosecutors charge Firer with grand theft, but they seized $950,000 given to Firer by a third party, Leon Goldstein, for the down payment on the home, court records state.

In the end, prosecutors reached a settlement that included dropping the charges with prosecutors agreeing to keep $37,000 of the money and returning the rest.

The legal fight didn't stop Firer from getting the home.

This time, instead of buying it from G & G " the owner " Firer reported on public records he was G & G's president. He then proceeded to flip the home to himself.

The lawyer on the deal: Stephen Goldstein, who has since been disbarred and convicted on grand theft charges for pocketing $93,000 from the sale of an elderly woman's house.

Last year, a circuit court judge ruled that prior liens on the house were erased, allowing Leon Goldstein and Firer to take control of the property. But one of the burned investors is fighting the decision.

THE BOOK ON FRAUD

Lawyers for AG Group Investments said the company has a stake in the house since it gave Natalia Wolf a loan six years ago for $450,000 and secured the money with a note on the house years before Firer came onto the scene.

Attorneys said Natalia Wolf buried the company's note on the house when she forged papers before fleeing the country showing her lawyer would be next in line for any equity in the home.

"She literally took out a book on fraud", said Groysman, who represents AG Group in the suit against Firer, G & G and others before Judge Spencer Eig.

Firer, who now lives in the house, could not be reached.

The Wolf's former attorney, Schulman, 50, who was suspended from the bar for his role in representing the couple, refuses to talk about the case. Samuel Cozzo, an attorney for G & G and other defendants, could not be reached

Five years after the Wolfs disappeared, Groysman says he wants to resolve the case for his client. "He's a victim, along with hundreds of others", said Groysman, a former Broward assistant state attorney who filed court papers last week charging the house has been a fraud mill for its owners.

"Real people were hurt. It's scary that millions of dollars can be stolen from a bank with a pen instead of a gun", he said, "and the taxpayer and legitimate lenders have to pay for it".

02/27/2012
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Joseph
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