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Mortgage Fraud & Foreclosure Scams: Be Aware, Be Informed and be empowered Pt 4

By
Real Estate Broker/Owner with HHMC Hollywood Homes by MC

 Detect and Combat Mortgage Fraud and Foreclosure scams.

Be in the Know!

Part IV

III.  Recent Mortgage Fraud and Foreclosure Scam News Stories:  Be Informed! Be aware!

(a) Los Angeles: Jeff McGrue, owner of a Los Angeles-area foreclosure relief business, was sentenced to 25 years in prison for defrauding people who were at the end of their rope. Even the federal judge who sentenced him called him “heartless.”

How the scam worked. McGrue and associates told the homeowners that “bonded promissory notes” drawn on a U.S. Treasury Department account would be sent to lenders to pay off mortgage loans and stop foreclosure proceedings; that lenders were required by law to accept the notes; and that homeowners could buy their homes back from Gateway and receive $25,000, regardless of whether they decided to re-purchase.

The payback for McGrue? The homeowners had to fork over an upfront fee ranging from $1,500 to $2,000…sign over the titles of their homes to Gateway…and pay Gateway half of their previous mortgage amount as rent for as long as they lived in the house.

(b) MINNEAPOLIS: In federal court, a 52-year-old man was charged for his role in a $20 million mortgage fraud scheme that involved 57 properties. Douglas Rex Butler was charged via information with one count of conspiracy to commit wire fraud.

Allegedly, between 2004 and 2007, Butler conspired with others, including Roger Bill Hanks and Derrick Ivan Lance, to obtain mortgage loan proceeds based on fraudulent documentation. Butler’s unnamed co conspirators identified residential properties available for purchase and recruited buyers for those properties. Two of the co-conspirators allegedly told buyers they would receive payments (i.e., kickbacks) after the property transactions closed, and that they could put those payments toward the mortgages or use them to improve the properties. Butler was one of those buyers.

The scheme involved submitting false mortgage loan applications, which misrepresented the buyers’ true financial situation. Based on those fraudulent documents, however, loans were approved, and loan proceeds were disbursed by wire transfer into the accounts of various title companies. Butler and his co-conspirators then allegedly caused those title companies to disburse a portion of the proceeds from each transaction into bank accounts not associated with the property buyers, the purpose being to conceal the undisclosed kickbacks. Butler received approximately $580,000 in concealed payments from the mortgage loan proceeds for the six residential properties he purchased.

© MINNEAPOLIS—In federal court, the second of two brothers was sentenced for orchestrating a $4 million mortgage fraud scheme that defrauded 24 area lenders. United States District Court Judge Ann D. Montgomery sentenced Baretta Dean Bork, age 35, of Mound, to 60 months in prison on one count of conspiracy to commit mortgage fraud through the use of wires and income tax refund fraud. Bork, who was charged on January 31, 2011, along with his brother, Xavier Willis Bork, pleaded guilty on March 9, 2011.

On August 26, 2011, Xavier Bork, age 32, of Eden Prairie, was sentenced to 60 months on one count of conspiracy to commit mortgage fraud through the use of wires and income tax refund fraud. He also pleaded guilty on March 9, 2011.

To prompt lenders to grant loans to the straw buyers, the Borks exaggerated income figures and lied about the employment status of those straw buyers. They also omitted from the loan applications information regarding other loan obligations the straw buyers already had incurred. As part of the scheme, the properties were purchased at inflated prices, and upon receipt of the mortgage loans, the loan proceeds were distributed to the straw buyers and the defendants.

In addition, the Borks admittedly recruited 26 people to file false U.S. Individual Income Tax Returns, claiming refunds totaling more than $154,000. The defendants provided those filers with false W-2 forms that indicated they worked for the Borks. To facilitate their tax scheme, the Borks also established two shell companies.

(d) OKLAHOMA CITY—DERRICK REUBEN SMITH, 47, of Midwest City, was sentenced by United States District Judge Timothy D. DeGiusti to serve 40 months in federal prison for his role in a conspiracy to commit wire fraud in connection with mortgage loans, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Judge DeGiusti ordered that Smith serve two years of supervised release following his imprisonment and pay restitution of $369,355.54.

Mr. Smith was convicted after a jury trial in April. The evidence showed that he recruited two individuals to buy two new homes in the Raintree Acres Addition in Edmond in mid-2006 and early 2007. The homes sold for $425,000 and $435,000. The builder of both homes—Dodson Custom Homes, LLC—agreed that T&T Realty, a real estate brokerage operated by Trina Tahir, would receive large commissions and bonuses totaling $51,950 and $77,950. After the closings, T&T Realty wrote checks to Michael Gipson, an agent at T&T Realty, for $27,059.86 and $58,000. Gipson then wrote checks in those same amounts to “MP Service,” a business that Smith operated. In short, Smith induced lenders to fund mortgages based on inflated real estate prices and misrepresented the distribution of excessive loan proceeds to himself as commissions and bonuses paid to T&T Realty. The houses ultimately went into foreclosure. Each sold for over $100,000 less than the inflated loans that Smith had the buyers receive.

(e) PHILADELPHIA—A 15-count indictment was filed against five defendants charged in a $14.6 million mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans, announced United States Attorney Michael L. Levy, Special Agent-in-Charge of the FBI Janice K. Fedarcyk, and Pennsylvania Secretary of Banking Steven Kaplan. Charged are Edward G. McCusker and John Alford Bariana, owners of Axxium Mortgage, Inc., McCusker’s wife, Jacqueline, and Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C.

(f) SAN JOSE, CA—Tara Denise Bonelli, 31, of Santa Cruz, Calif., was arrested today by agents from the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation. United States Attorney Melinda Haag announced. Yesterday, a federal grand jury in San Jose indicted Bonelli, charging her with 18 counts of wire fraud, one count of mail fraud, and three counts of money laundering.

According to the indictment, Bonelli was the founder and owner of Vista Holding Company (Vista Holding) and Vista Funding, Inc. (Vista). Vista Holding owned and operated eight different entities: Vista, Independent Financial, Equity Advisors, Bonelli Properties, Lost Dollar Services, Equity Inquiries, Outlook Enterprises, and Sovereign Property Management. Vista was a California corporation that claimed to offer a variety of real estate and financial services, including foreclosure assistance, the purchase of distressed properties, and the subdividing and development of properties.

 

Note: These stories could be teachable moments for us

What say you?  Do you have any stories or ideas combating and detecting Mortgage and Foreclosure?  Your feedback is appreciated.

 

Ref. FBI: http://www.fbi.gov/

·        U.S. Attorney’s Office August 31, 2011, Western District of Oklahoma

                     (DERRICK REUBEN SMITH)

·        U.S. Attorney’s Office, U.S. Attorney’s Office, District of Minnesota

                        (Xavier Bork & Eden Prairie)

·        U.S. Attorney’s Office September 07, 2011, District of Minnesota (Douglas Butler)

·        United States Attorney Michael L. Levy, June, 2011  (Edward G. And Jacqueline McCusker)

·        United States Attorney Melinda Haag (Tara Denise Bonelli), March, 2011

·        FBI: Los Angeles: McGrue: Gateway International

 

Hollywood Homes by MC

MC Griffin Campbell, Broker/Owner: Broker License #: 01819507

Short Sales and Foreclosure Resource (SFR) Certification

Seniors Real Estate Specialist Designation (SRES); MFT, M.Div.

323-382-4364: 323-464-5431  

www.hollywoodhomesbymcampbell.com

email: hollywoodhomesmc@aol.com