Here is another example of a recent legal case involving mortgage fraud. I try to post case summaries in order to provide timely updates to real estate professionals on important issues.
On June 3, 2009, five people were arrested for their roles in a mortgage fraud scheme in the Washington State that bilked banks and property sellers out of more than $18 million. The arrests came as a result of an extensive investigation by United States Immigration and Customs Enforcement (“ICE”).
Humerto A. Reyes-Rodriguez, Alexis Ikilikyan, Micki S. Thompson, Mario Marroquin, and William S. Poff were indicted by a federal grand jury last month on charges of money laundering and conspiracy to commit bank and wire fraud (they were arrested on June 3, 2009). The indictment alleges that over a three-year period starting in 2004, they were responsible for 80 fraudulent loan transactions in communities throughout King County and Pierce County, Washington.
Mr. Reyes-Rodriguez and Ms. Ikilikyan were licensed real estate agents and mortgage loan originators. Mr. Poff is Ms. Ikilikyan's ex-husband and was a licensed notary and loan originator. Mr. Thompson was employed by Great American Escrow and acted as the closing officer for many of the fraudulent sales. Mr. Marroquin acted as a straw buyer and oversaw fictitious home repair companies.
According to court documents, the five defendants worked together to obtain financing from banks to purchase homes. At the same time, they convinced innocent home sellers to extend private loans to the buyer of the home to cover a portion of the purchase price.
The sellers did not know that the conspirators had already obtained financing from commercial lenders to cover the full cost of the home. When payments were not made, the properties fell into foreclosure. The homes were then sold for less than the total of all loans secured for the property. The sellers who had extended private loans to the buyers were left with nothing.
The conspirators also used straw buyers to purchase and resell properties and then submitted false information to the banks such as employment, income, citizenship status, assets and liabilities. They submitted bogus appraisals and hired fictitious home repair companies to do repair work on the properties. Proceeds from the home sales would go to the fake companies that had, in fact, done no work.
This case uncovered a group of real estate professionals who manipulated home sales for pure profit while some of the properties went into foreclosure and innocent private citizens were defrauded.
The conspiracy and money laundering charges are punishable by up to 20 years in prison and a $1 million fine. An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in court.
I will try to keep following this case and post an update when the case is ultimately resolved, hopefully with all of the defendants getting long prison sentences.
Source: U.S. Department of Justice press release (portions of press release used with permission)
To learn more about a variety of real estate topics, please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.
Copyright © 123 ConEd LLC 2009. All rights reserved.