For years, Fannie Mae employee Shirene Hernandez would assign real estate brokers choice listings on foreclosed homes, and in return, they would pay her cash kickbacks stuffed into envelopes and delivered in parking lots, airports and coffee shops.
When the crime was finally exposed, Hernandez’s role amounted to more than $3 million in corrupt commissions to brokers.
On Monday, the former Fannie Mae employee was sentenced to more than 6 years in federal prison, after a jury convicted her last year of two counts of wire fraud. Hernandez, who worked out of the Orange County office, was also ordered to pay Fannie Mae close to $1 million in restitution, the U.S. Attorney’s Office said in a statement.
Hernandez, who had been a sales representative for the government-sponsored enterprise, was entrusted with buying foreclosed homes from banks then selling the parcels. She also got to hire the listings brokers she wanted on the deals.
Hernandez, prosecutors said, ended up selling scores of foreclosed homes for a total of $120 million — well below market rate — and collecting hundreds of thousands of dollars in kickbacks from the brokers.
One of them was Peter Michno. Between 2011 and 2015, Hernandez assigned Michno over 200 foreclosed properties to sell, which Michno sold for a total of $48.9 million, prosecutors said.
He earned $1.2 million in commissions, about a 2.5 percent cut from each sale, the government said. In exchange, he paid Hernandez 25 percent, about $300,000.
But Hernandez didn’t just illegally sell properties, she also bought one. The wire fraud conviction included charges she purchased a foreclosed home in Sonoma, then apparently sold it to a company affiliated with Michno in an attempt to hide the transaction.
He then transferred the property to Hernandez’s sister-in-law, “who paid for the property with a duffel bag filled with $286,450 in cash from Hernandez,” prosecutors said. Michno cooperated with the government and accepted a plea agreement just before Hernandez’s trial in February 2019. No other real estate agents were named.
A message left with a representative for Fannie Mae was not immediately returned.