CHICAGO (JGL) — Cook County Court Judge Jessica Arong O’Brien asked the Northern District Court of Illinois in Chicago last week to dismiss the charges of mail and bank fraud against her. She claims government prosecutors failed to preserve any evidence that shows she defrauded the Citibank, N.A., a financial institution, to fund a mortgage loan in the amount of $73,000 for a straw buyer A’s (Christopher Kwan) purchase of a property in Chicago’s south side.
In her supplement to her motion to dismiss based on statute of limitation and pre-indictment delay, filed by her lawyers, Ricardo Meza and Donald J. Angelini, Jr., last Dec. 27, it says the twin motions “involve key documents that either never existed or that did exist when the government began its investigation but have now been destroyed because of the government’s delay in indicting” her.
The motion said the failure of the government to preserve record or to prevent destruction had prejudiced O’Brien, a native of Cebu City, Philippines.
“If the tables were turned and Ms. O’Brien or O’Brien Realty destroyed highly pertinent documents, as did Citibank or CitiMortgage, the government would have grounds to prosecute her for obstruction of justice,” according to the motion.
“As such, the Court should impose sanctions against the government for its reckless or intentional actions of failing to preserve dispositive evidence.”
The Citibank or CitiMortgage have a ten-year policy of retaining their records.
Count I of the Indictment, says, “On or about April 16, 2007 at Chicago in the Northern District of Illinois, Eastern Division, and elsewhere, Jessica Arong O’Brien, defendant herein, knowingly executed and attempted to execute the scheme to defraud by causing Citibank, N.A., a financial institution, to fund a mortgage loan in the amount of $73,000 for Buyer A’s purchase of 625 West 46th St., Chicago, IL in violation of Title 18, U.S.C. Sec. 1344.”
Violators of 18 U.S.C. Sec. 1344 will be fined not more than $1-million or imprisoned not more than 30 years or both.
LOAN RECORDS AVAILABLE FOR GOVERNMENT FOR 18 MONTHS
The documents “to fund a mortgage loan in the amount of $73,000,” according to the motion, “are now missing due to the failure of the government prosecutors to notify the Citibank/CitiMortgage to put a ‘litigation/legal/regulatory hold’ on the documents when the institution received a federal grand jury subpoena on Sept. 1, 2015, seeking documents related to the April 16, 2007 transaction.” On that day Citibank/CitiMortgage would still be holding the records up to a year and a half before it would destroy the records.
In O’Brien’s prior renewed motion to compel motion non-parties Citibank, N.A. and CitiMortgage, Inc. to produce documents and/or strike testimony, it said if it is the case that CitiMortgage, Inc., a non-financial institution in 2007, “funded the $73,000 mortgage, instead of Citibank, N.A. as alleged in the Indictment, then the five-year statute of limitation applies to Count I Indictment rather than a ten-year limitations, and both Counts I and II are subject to dismissal.”
The majority of the lenders, including the CitiMortgage, Inc., involved in the transactions that led to O’Brien’s charges of two-count indictment and forfeiture were private corporate lenders and did not fall under the 2004-2007 definition of “financial institution” per Sec. 20 of Title 18 of U.S. Code and therefore the default five-year limitation applied, according to the motion.
It was not only May 20, 2009, when 18 U.S.C. Section 20 was amended to include private corporate lenders. The majority of the transactions involved in the case expired years before April 11, 2017, the date the government presented its indictment to the grand jury.
CITIMORTGAGE MUST HAVE FUNDED THE LOAN
Despite the government’s allegation in the indictment that “Citibank, N.A., a financial institution, funded a mortgage loan in the amount of $73,000 (per Indictment Count II), the documents produced in the Government rule 16 Production reveal that CitiMortgage, Inc., a non-financial in 2007, actually may have funded the $73,000 mortgage,” the motion added.
“Today, there is no doubt that CitiMortgage/Citibank’s failure to produce such records (despite repeated requests) coupled with the recently produced CitiMortgage/Citibank record retention policy, confirm that the funds transfer documents, if they existed at all, no longer exist,” according to the motion.
“These documents are vital to Ms. O’Brien’s defense that the government failed to timely indict her within the applicable five-year statute of limitations period.
“Again, the government Indictment is untimely and barred if CitiMortgage funded the loan.
“There is no more relevant, material, competent and consequential evidence than that which is now destroyed and missing from the government’s production.
“Pre-indictment delay is not a statute of limitations issue, per se. Over the critical 18-month period, the government was not only running against the expiration of the statute of limitations period, it was running against a record destruction policy which would effectively destroy documents critical to Ms. O’Brien’s defense.
“It makes sense that banks that receive protection of a ten-year statute of limitations would also have a ten-year records retention policy.
“Therefore, the Court should infer that any documents that are now unavailable because of the Government’s failure to preserve evidence would benefit Ms. O’Brien and support her arguments as set forth in her Motions to Dismiss.”
OTHER PRE-TRIAL MOTIONS
The motions on the statute of limitation and pre-indictment delay are just the latest pre-trial motions being resolved by the judge before the case goes on trial on Feb. 5, 2018.
Earlier, O’Brien’s lawyers filed a motion to dismiss based on purported perjured grand jury testimony by cooperating witness, O’Brien’s co-defendant Maria Bartko, which the defense views as “exculpatory, claiming that the government’s failure to present these documents to the grand jury amounts to ‘grand jury deceit’ that is akin to a Brady violation.”
The motion is pending resolution.
Earlier, Judge Durkin denied the motion to dismiss Counts I and II of the indictment on duplicity grounds as the “government has improperly joined four separate offenses into a single scheme to avoid the statute of limitations that would otherwise apply to bar the first three offenses.”
Durkin said since the “indictment fairly alleges a scheme and that potential prejudices can be effectively mitigated at trial,” the court denied O’Brien’s motion to dismiss.
The indictment alleges that the scheme was comprised of four transactions:
In 2004, O’Brien “fraudulently obtained mortgage loan proceeds ($204,000) to purchase an investment property at 625 W. 46th St. by submitting mortgage documents with false statement regarding her income and liabilities” (no loss, fully paid, statute of limitation passed);
In 2005, O’Brien, with Bartko as the loan originator, “fraudulently refinanced her mortgage loan ($295.200) on the 625 W. 46th St. property and on a second investment property at 823 W. 54th St. (at $189,000 loan amount) by submitting applications with false statements regarding O’Brien’s income and employment” (no loss, fully paid, statute of limitation passed);
“In 2006, O’Brien obtained “fraudulently a commercial line of credit ($25,000, no loss, fully paid, statute of limitation passed) by submitting applications with false statements about her realty company’s revenue and profit and used those loan proceeds to maintain the 46th St. and 54th St. properties”; and
“In 2007, O’Brien and Bartko “agreed that O’Brien would sell the 625 46th St. ($292,000) and 823 54th St. properties to Bartko using “a straw buyer (Christopher Kwan) whom O’Brien and Bartko knew would be fraudulently qualified for a mortgage loan ($73,000).”