A California real estate executive was sentenced today to one year and one day in prison, followed by two years of supervised release, and ordered to pay a fine of $200,000 for engaging in an extensive multi-year conspiracy to falsify financial statements.
According to court documents and evidence presented at sentencing, Tyler Ross, 38, of San Francisco and formerly of Michigan, served as co-chief executive officer of ROCO Real Estate LLC and ROCO Management LLC. Both companies were based in Bloomfield Hills, Michigan. The ROCO companies operated as a commercial real estate investment firm engaged in purchasing, managing, and selling multi-family residential properties located in Michigan and elsewhere.
Between 2015 and 2019, Ross and his co-conspirators caused false financial documents, including historical operating statements that deleted or reduced actual expenses, to be submitted to mortgage lending businesses for underperforming ROCO properties. This made the properties appear more profitable than they were in order to obtain refinancing or avoid certain contractual provisions by the lenders. Ross acknowledged that he personally falsified historical operating statements during the conspiracy and directed other members of the conspiracy to assist with creating and submitting falsified financial statements.
The court also found that Ross falsified financial documents connected with the 2019 sale of 43 ROCO properties to a privately held real estate investment company. He supplied false financial information to the buyer of the properties and ultimately to the financial institution that issued a $481 million loan for the transaction. Ross received over $2 million in proceeds from this sale.
Ross pleaded guilty in September 2023 to one count of conspiring to commit an offense against the United States.
Principal Deputy Assistant Attorney General Nicole M. Argentieri; U.S. Attorney Dawn N. Ison for the Eastern District of Michigan; Special Agent in Charge Korey Brinkman of the U.S. Federal Housing Finance Agency Office of Inspector General (FHFA OIG) Central Region; Special Agent in Charge Shawn Rice of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD OIG); and Acting Assistant Director James C. Barnacle Jr. of the FBI’s Criminal Investigative Division made the announcement.
The FHFA OIG, HUD OIG, and FBI investigated the case.
Trial Attorneys Andrew Tyler and Philip Trout from the Criminal Division’s Fraud Section along with Assistant U.S. Attorney Andrew J. Yahkind for the Eastern District of Michigan prosecuted it.
Anyone with information concerning similar fraud can report it by contacting the FHFA OIG Hotline at 800-793-7724 or via www.fhfaoig.gov/ReportFraud#hotlineform.