MIAMI (CBSMiami) – Governor Rick Scott has suspended North Miami Mayor Lucie Tondreau after she surrendered to federal authorities as part of a mortgage fraud investigation.
Tondreau was released from federal custody late Tuesday afternoon on $50,000 bond.
As she walked out of the federal courthouse, she told CBS4, “”I would like to thank everybody for their support, today has been long day, my goodness, we have to look forward to end of this. I’m innocent and I’m sure my attorneys, my community will be with me. All I have to say is North Miami stand tall.”
Tondreau, who is charged with conspiracy to commit wire fraud affecting a financial institution, was ordered to surrender her passport and report to pre-trial services. Her bond was co-signed by her daughter. Her travel is restricted to the Southern District of Florida and she is not allowed to have contact with anyone in this case.
The federal judge also imposed an 11 p.m. to 6 a.m. curfew for her at her North Miami home. She will have an arraignment at 10 a.m. on May 30th.
Her attorney Ben Kuehne “We await the opportunity to demonstrate her innocence. There is a lot of work for our legal team.” He said Tondreau would be “vindicated.”
“Yes the charges in this case come from a long time ago and that raises questions and factual concerns. We will work diligently in this case,” he said. “Her first opportunity to hear about this case was yesterday. We are learning more and more about this case as it unfolds.. I’m confident she will be found innocent.”
Tondreau, along with Karl Oreste of Miramar, Okechukwu Josiah Odunna of Lauderdale Lakes and Kelly Augustin of North Miami are accused of fraudulently obtaining loans on 20 South Florida properties between 2005 and 2008.
According to the indictment Oreste, president of KMC Mortgage Corporation of Florida, identified residential properties in South Florida that were for sale. Oreste and Tondreau hosted several radio show programs in which they advertised the services offered by KMC Mortgage.
Federal prosecutors claim Oreste and Tondreau recruited and paid some of the listeners who answered those ads, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.
The indictment alleges that Oreste and Odunna, and other co-conspirators then prepared loan applications on behalf of straw borrowers. Odunna was president of O.J. Odunna, P.A. and Direct Title and Escrow Services.
These loan applications included false information relating to employment, wages, assets and intent to make the property being purchased a primary residence, according to the indictment. The loan applications were then submitted to various mortgage lenders throughout the United States.
Once the loan applications were approved, the lenders wired loan funds to O.J. Odunna, P.A., Direct Title or other title companies for closing.
The indictment alleges that in some instances Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-1 Settlement Statement Forms, which grossly inflated the true purchase price of the properties.
At closing, a portion of loan proceeds were disbursed to Oreste through his corporation, JR Investment and Mortgage Corporation, or other bank accounts controlled by him.
In some instances, a portion of the loan proceeds was diverted to accounts controlled by Odunna.
Investigators claim Oreste also used part of the loan proceeds to pay recruiters – such as Tondreau and Augustin – and the straw borrowers. Oreste also transferred a substantial portion of the funds to bank accounts of LTO Investment Corporation, a corporation controlled by Tondreau, according to the indictment.
Tondreau allegedly used those funds to make payments on the fraudulently obtained mortgages in order to maintain the loans, and to conceal the fraud. She also used a portion of the funds for her own personal use and benefit.
The indictment alleges that over the course of the conspiracy, the group took lenders for approximately $8,000,000.00. If convicted, each defendant faces a maximum term of 30 years in prison.
Former North Miami Mayor Kevin Burns, who lost the Mayoral election to Tondreau, said he was concerned.
“Anytime a elected official in South Florida gets indicted it heightens the mistrust of the residents against the politicians. We know the damage that mortgage fraud can do to the South Florida community.”
Vice Mayor Phillipe Ben-Aime will serve as interim mayor of North Miami. He sent a statement to CBS4 saying: “It’s a bad moment for our city, but she’s [Tondreau] been there for us, and the community stands by her. I trust the justice system.”
City officials are checking the charter to determine if a special election will be called.
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