A self-employed tax preparer, banker, mortgage broker, interior designer , owner of a property management company and others called have been charged in participating in a mortgage fraud scheme to sell four high-end luxury properties to "straw buyers" were indicted. An indictment is merely an accusation and all defendants are presumed innocent unless and until proven guilty in court.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Richard Cordray, Warren County Prosecuting Attorney Rachel Hutzel, and Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation (FBI) and other task force participants announced the indictment.
Stewart commended the investigation by the Greater Cincinnati Mortgage Fraud Task Force. The Greater Cincinnati Mortgage Fraud Task Force is a multi-agency, multi-jurisdictional initiative dedicated to combating the mortgage fraud problem in the Southern District of Ohio.
The charges stem from the sale of four residential properties in 2006 to 2007, three of which were sold for approximately $2 million each. The indictment alleges that each conspired to defraud lenders involved with the sales.
The scheme, as alleged in the indictment, involved locating two people willing to buy the properties in name only and let their names is used on loan applications. The indictment alleges that they worked with a mortgage broker who submitted fraudulent loan applications that contained false income and assets. According to the indictment, the banker gave a customer bank account statement to be used as a "go-by" to create fictitious account statements to support fraudulent assets on the loan applications.
The indictment also alleges that provided documentation to the lenders falsely stating that they had received down payments from the borrowers when they had not. The indictment alleges that the defendants conspired with to have the fraudulent loans approved in order to sell their properties.
The indictment alleges that the defendants benefited from the scheme because they were able to sell their expensive properties, get out from under substantial mortgages, and receive additional loan proceeds.
The indictment charges all four defendants with conspiracy are charged with conspiracy to commit wire fraud and wire fraud, both crimes punishable by up to 20 years' imprisonment.
Two of them are charged with conspiracy to commit loan fraud, punishable by up to five years' imprisonment, and two counts of loan fraud. Each count of loan fraud is punishable by up to 30 years' imprisonment.
The indictment also seeks forfeiture of any property or assets derived as a result of the crimes. Loan proceeds from the alleged fraud totaled approximately $6.7 million. Charges have been filed separately against the straw buyers, one has been charged with conspiracy to commit wire fraud punishable by up to 30 years' imprisonment, the other has been charged with loan fraud, punishable by up to 30 years' imprisonment.
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We must be vigilant against fraud, recognizing its signs and taking proactive, definite, and realistic steps to not only prevent it but also punish it.
It starts with me.
It starts with you.
It starts with us...
Michael S. Richardson
Director/Mortgage Fraud Services
Author of "An American Epidemic, Mortgage Fraud a Serious Business"