US Department of Justice announce...
Las Vegas Real Estate broker and her husband arrested and charged by the Federal Grand Jury with defrauding federally-insured financial institutions of million of dollars through a schemes that involved inflated housing values, straw purchasers and limited liability companies.
The 2 were arrested March 12 and charged with 6 counts of Bank Fraud and one count of Money Laundering.
The crime involved making false statements regarding income, assets, debt, or matters of identification. It seems they willfully overvalued property in loan and credit applications.
Operating numerous limited liability companies registered in Nevada and conducting business in Las Vegas they recruited individuals ( straw buyers) to make offers to purchase at inflated prices and above sellers asking price. Once they had an accepted offer they would apply for loan using false information regarding employment, income and assets in order to qualify buyers.
They then would require straw buyers to transfer property to limited liability company controlled by the couple. At that time the buyer would be compensated for their involvement.
At closing they would instruct Escrow to disperse a portion of funds to different liability companies. They would then sell the same property to a different straw buyer at inflated prices.
They would then default on loans causing them to go into foreclosure.
The Department of Justice reports at least 118 of 227 properties purchased have been sold in foreclosure causing losses in banks of more than $15 million dollars. It is estimated they were involved in approximately 432 transactions.
The article states it is an on going investigation and I think there will be more arrested in this scheme such as appraisers, Escrow agents, possible listing agents and maybe mortgage agents
This should be a warning to us to find out who we are doing business with and to speak up if we see or smell something that stinks.
PROCEED WITH CAUTION.
Ralph
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