Eduardo San Roman, owner of 24 Asset Management, a Housing and Urban Development (HUD) Management and Marketing (M&M) Field Service Manager (FSM) Awardee, was finally caught, literally, with his signature. And what are we referring to, here? Since the winding down of Assero without bankruptcy, a subsidiary in all but name of 24 Asset Management, nearly one million dollars owed to Labor failed to be paid. This, while Lee Mertins and Eduardo San Roman were paid by Fannie Mae and LoanCare for the services rendered by the victims. Were that all that had occurred, no party no foul, as that is the pattern and practice of the National Association of Mortgage Field Services (NAMFS) members going back before the turn of the century. It wasn’t, though. Those same monies never paid to the victims were recorded as paid and fraudulently entered upon IRS 1099’s and delivered to both the IRS and the victims in this matter. And were that the entirety of the case, it would simply be yet another failure of both HUD and the US government to properly investigate and perform due diligence upon HUD Awardees.
The predication of the refusal by Craig Karnes, HUD’s Acting Deputy Director of Procurement, to remove 24 Asset Management as a HUD M&M FSM Awardee has been that Eduardo San Roman has never actively engaged in the fraud at Assero. In fact, in rarely seen verbal gymnastics of Olympian level, the final opinions issued were that San Roman may, in fact, legally control Assero; however, he never engaged in the financial decisions. This is an outright lie and today we have the proof as seen below.
It is one thing to simply refuse to pay people because you are committing fraud, but it is a completely different matter to sign checks, cause them to be delivered and deposited, and
then stop payment on them. That is precisely what Eduardo San Roman did. Not just once, not just twice, but multiple times in a way last seen during the Buczek Enterprises fraud we reported upon heavily. Fact of the matter, though, is that Karnes has done everything in his power to protect Eduardo San Roman and Karnes’ personally vested interest in 24 Asset Management’s HUD M&M FSM 3.12 Award is beyond the pale. Karnes was notified about the latest fraud and remained radio silent, as we say. And it is this conceit and concealment on the part of Karnes and San Roman that allows the conflict of interest in the Awards made to 24 Asset Management to pose a conflict of interest against the welfare of US taxpayers. At minimum, this should demand the reprimanding of Karnes himself — if not outright firing — and the disqualification of 24 Asset Management as a HUD M&M FSM Awardee.
The bright lining of the horrific misconduct ongoing at HUD and the fraud perpetrated upon not only the victims, but the Internal Revenue Service, is egregious, at best, and constitutes a conspiracy that crosses state lines, using electronic means, in the furtherance of artifices and schemes — RICO. In fact, I submit that the last time we saw this type of behavior was in an FBI investigation into Defense Department Procurement fraud today known as Operation Illwind. In full disclosure, it should be noted that Karnes originated within Army Procurement prior to his HUD career, now in procurement.
On June 14, 1988, a major multi-agency investigation into defense procurement fraud — later codenamed Operation Illwind, a likely reference to an old English proverb — was announced to the world via a one-page press statement. By the time the dust had settled several years later, the case revealed that some Defense Department employees had taken bribes from businesses in exchange for inside information on procurement bids that helped some of the nation’s largest military contractors win lucrative weapons systems deals. More than 60 contractors, consultants, and government officials were ultimately prosecuted —including a high-ranking Pentagon assistant secretary and a deputy assistant secretary of the Navy. As a monetary measure of the significance of the crimes, the case resulted in a total of $622 million worth of fines, recoveries, restitutions, and forfeitures. Whether or not Karnes was there at the time is unknown.
This is simply the latest refusal of Karnes to actively engage in ongoing fraud under his watch. Originally, in the whistleblower lawsuit against Five Brothers and US Bank, and most recently in the multi-million dollar Involuntary Bankruptcy of National Field Network (NFN), Fannie Mae, under HUD conservatorship, has been involved. And in the latter case, Fannie Mae was ordered to pay back tens of thousands of dollars to victims for actions occurring under the ever watchful eye of HUD and Karnes. So heinous was the Involuntary Bankruptcy of NFN, which Karnes had full knowledge about, the US Bankruptcy Trustee Andrea Dobin put it it like this,
The Trustee recognizes that many of the creditors in this proceeding have suffered more than just a monetary loss at the hands of the Debtor as operated by [Shari] Nott — the are actual victims, which have had their business lives and personal affairs devastated by this Debtor and Nott. — Note that the emphasis on victims is that of the Trustee.
It is time for a special counsel be appointed to review the decades of fraud committed by Fannie Mae, Freddie Mac, and HUD pre and post conveyance Prime Vendors and their order mills. It is time to sterilize the HUD Atlanta offices with the cleansing effects of transparency not only with respect to the fraud, but allowing the US taxpayers to understand when and why firms are removed from the HUD M&M FSM. And it is time that the US government begin to actually prosecute the offenders much like the FBI did with Operation Illwind.
