Real Estate Professionals Arrested in Mortgage Fraud Scheme

By
Education & Training with 123 ConEd LLC -- Michigan real estate continuing education School Sponsor 373

scalesHere 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)

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Kristina Rosen-Hester 06/13/2009 01:14 PM
  2. Perky Hammer 06/14/2009 12:30 AM
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Tags:
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Rainmaker
657,615
Pat & Wayne Harriman
Harriman Real Estate, LLC (203) 672-4499 - Wallingford, CT
Broker/Owners, Wallingford CT Real Estate

Just out of curiousity, why were the comments by Karen Rice and Gary Coles deleted??

Jun 14, 2009 01:28 AM #66
Rainer
38,068
Sue Paige
ERA Today Realty, Windham, ME 04062 - Windham, ME

Wow. The b_ _ _s!!!! It is sad to see people are still out there taking advantage of others. ANd with all that has happened, why did it take so long to close these folks up from practicing this sort of fraud. I am glad to see they have been stopped. The poor people who have lost their homes, retirement, equity, etc.

Thanks for keeping up informed.

Jun 14, 2009 01:47 AM #67
Anonymous
Mike Rosenthal (Concise Investments LLC)

The pathetic irony of stories like this is that most of these scams and frauds require tons of thought, creativity, and effort. If these reprehensible people would put the time and effort into legitimate enterprise, they'd make just as much money!! ..And not be in prison either...

Jun 14, 2009 01:49 AM #68
Ambassador
787,506
Kat DeLong
LakeView Realty Enterprises, Inc - Lake Arrowhead, CA
Realtor DRE#01235311, Lake Arrowhead Real Estate (

I'm only afraid we'll be hearing about more of these "acts." 

Jun 18, 2009 08:35 AM #69
Ambassador
665,958
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Jason: Unfortunately it's probably just the tip of the iceberg. I heard about another one that might be even bigger here. I believe the FBI is still investigating. As they say, people get what they so richly deserve! Thanks!

Jun 18, 2009 08:48 AM #70
Rainer
43,172
Darin Osenberg
Funky Quail Vintage - Nashville, TN

I think if we are going to post a blog of this nature, as well as FEATURE It, the blog artist needs to be responding to these comments.  Additionally, there are spam comments on here, solicitations and haters!  This is NOT a positive!  OF COURSE THIS IS BAD FOLKS!~  This was a TEAM of Criminals, and represent such a SMALL percentage of the people in the mortgage industry.  While I think it is important information, it is also spreading negative situation with no possible gain.....>Just look at some of the CONSUMER comments on here!

I DO AGREE, this is terrible, and they WILL be, or should be in prison...or are headed that way...or are there ALREADY!  No matter what, it is bad!  Let's dwell on positives folks!  Let's FINALLY get past this!  Let's quick dwelling on the past and focus on the future!  Get involved..!!  Read Jeff Belongers Blog, read Gerry Suarez's REBLOG of Jeff's blog, Read Matt Stigliano's blog...

Im sorry, but I dont see a reason ANYMORE to blog about this stuff, let alone feature it!

NO OFFENSE AT ALL INTENDED Jason...That is NOT my point!  -  I understand what you were trying to accomplish, and by the comments left, it is CLEAR TO ME that it is an important topic amongst Rainers & Consumers....

 We should all be focusing on July 30th right now!!!  -  Darin   aka: Bucky

Pat & Wayne, I couldnt tell ya...all I know, is that Jason has alot of catching up to do!! :)  D

Jun 18, 2009 08:52 AM #71
Rainmaker
179,901
Jason Rose
123 ConEd LLC -- Michigan real estate continuing education - Farmington Hills, MI
www.123ConEd.com

I want to address two separate comments left on this blog that accused me of plagiarizing this posting.  Nothing could be further from the truth.  As explained in more detail below, I did not improperly use someone else's work and pass it along as my own.

Being relatively new to the blogging world, my first reaction after reading those slanderous comments was simply to remove them because they falsely accused me of something that I did not do.  Without giving it more thought, I removed the two comments, which is something I now regret doing.  I then sent each of those individuals separate messages to address the issue and explain to them why they were incorrect.  Surprisingly, I never heard back from either individual, apparently because, after reading my message, they realized their mistake and were too embarrassed to write me back.

A short time after removing the offensive comments, a long-time blogger on this site wrote me an email and suggested that a better way to approach these types of issues is not to remove the offensive comments from my blog.  Instead, he suggested that I should address them head-on in a reply comment.  He was right, so I decided to take his wise advice and write this comment.

One of the offensive comments accused me of stealing a newspaper article written by the Imperial Valley News. There were absolutely similarities in the blog I posed here and in the article written by the Imperial Valley News.  There is a good reason for that. My blog material and the article "written" by the Imperial Valley News were both strongly based on a press release issued by the United States Department of Justice about recent criminal case. The Department of Justice expressly allows anyone and everyone to freely use its press release material (in their entirety) in any way they want (without citation or reference) so that the information can be disseminated to the public. In fact, the Department of Justice hopes that the press releases will be published in blogs and newspapers as news stories. That way it gets free advertising about its activities and helps educated the public. Media organizations are encouraged to spread the word. In fact, many media outlets simply cut-and-paste the entire press release into their papers (removing only the words “press release”), which is exactly what the Imperial Valley News did in this case.  As a result, multiple unrelated newspapers around the country often times publish exactly the same article, word-for-word.  It is not plagiarism.  Here, I used a lot of the wording from the press release, but I made a changes.

So to address the implications in the two comments that I somehow stole someone else's work, those allegations are completely false. I stole nothing. I merely adopted the Department of Justice's press release, which is something that the Department of Justice encourages and hopes will happen. In fact, there are probably dozens or more similar stories out there in newspapers and blogs around the country that look very, very similar, and it's not due to plagiarism.

People leaving comments such as the two left here for me should make sure to check their facts before making slanderous and libelous comments on this (or any other) site.

Thank you for listening.  Please let me know if you have any questions,

Jason

Sep 25, 2009 08:38 AM #72
Rainmaker
153,300
Kathy Knight
Intracoastal Realty Corp - Wilmington, NC
BROKER, ABR, CRS, GRI, SFR, SRES

Jason :

Glad they got those lousy guys who tarnish the realtor name for the rest of us...

Sep 28, 2009 01:50 AM #73
Rainmaker
179,901
Jason Rose
123 ConEd LLC -- Michigan real estate continuing education - Farmington Hills, MI
www.123ConEd.com

Kathy:  Thanks for your comment!

Sep 28, 2009 01:57 AM #74
Rainmaker
347,278
Pat O'Reilly
RE/MAX..214-289-6176 Irving and all of Dallas Fort Worth - Irving, TX

Thanks for the information. It's hard to believe it is still happening. Hopefully the bad ones will be caught...

Sep 28, 2009 02:05 AM #75
Rainmaker
607,373
Jeana Cowie
RE/MAX Real Estate Limited - Paramus, NJ
Broker Associate, ABR, CRS, GRI, SRES

This is a truly sad story to read and makes my stomach turn. Luckily everyone was caught. In this poor economy, we may still see the absolute worst in people.....

Jeana Cowie, Broker Associate, Re/Max Real Estate Ltd. Bergen County, NJ

Sep 28, 2009 02:14 AM #76
Rainer
44,014
Lisa Matykiewicz
United Brokers Group - Gilbert, AZ

It always amazes me that sych creative people chose crime over developing their business.  I hope they serve every bit of their sentence.  People need help right now not more heartache.

Sep 28, 2009 02:44 AM #77
Rainmaker
243,596
Lina Robertson
RE/MAX Solutions and RE/MAX House of Brokers - Springfield, MO
REALTORĀ® Serving Springfield, Nixa and Ozark, MO

Jason - I was recently contacted by a gentleman who found me on the internet and made promises of making lots of money together.  A short time into our first contract, I realized he was trying to pull a straw buyer scam.  Of course, I let the contract fall through and have not returned his phone calls since.  No amount of money is worth our license or our reputations.  Besides...prison simply doesn't offer any amenities that appeal to me.  :)

Sep 28, 2009 03:02 AM #78
Rainmaker
490,543
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Jason:

I like your rebuttal on the comments about the plagiarizing of your post.

Sep 28, 2009 03:03 AM #79
Ambassador
1,613,719
Harry F. D'Elia
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

I wish people would do it the honest way. You will always get caught down the road. How does one sleep at night?

Sep 28, 2009 05:07 AM #80
Rainmaker
559,831
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

20 years is too short of a sentence.  Scum like that need more punishment.  I have more respect for armed robbers.  They are at least are more direct and don't hide what they are doing. 

Sep 28, 2009 08:04 AM #81
Rainer
26,954
Crystal Ledbetter
Texas Home Group - Montgomery, TX

We have a couple of subdivisions that were hit with mortgage fraud a few years ago, the values in those area's are still reeling from the the dishonesty of a few bad apples, the pain of mortgage fraud goes on and on long after the original fraud happens

Sep 29, 2009 04:31 AM #82
Rainer
92,210
Joshua Schaubach
ERA Matt Fischer Realtor - Yuma, AZ
e-Pro Your Yuma, AZ - Realtor Only a Call or Click Away!

somebody didnt pay attention in ethics class.  great post. people need to be aware that this happens.

Sep 29, 2009 05:06 AM #83
Ambassador
1,893,139
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

We just had a group of agents and mortgage professionals indicted in our area as well.  They had a mortgage and straw buyer scheme in place.  They expect by the time the investigation is over that the value of the properties will top $100M.  The names of all of the people arrested were well known to us who also work in the area. 

Sep 29, 2009 02:19 PM #84
Rainmaker
179,901
Jason Rose
123 ConEd LLC -- Michigan real estate continuing education - Farmington Hills, MI
www.123ConEd.com

I wanted to thanks everyone for their great comments to this post.  I apologize that I cannot thank everyone individually by name, but there are so many comments and so little time.  :-)

Oct 01, 2009 01:00 AM #85
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