Two Defendants Arrested and Charged in Alleged Mortgage Fraud Scheme Involving Federal Undercover Investigation
|U.S. Attorney’s Office May 14, 2014|
CHICAGO—A West suburban man and a Chicago woman were arrested on federal charges for allegedly engaging in a bank fraud scheme purporting to involve the fraudulent sale of two two-flat apartment buildings in Chicago, federal law enforcement officials announced today. The charges followed a federal undercover investigation of fraudulent mortgage loan transactions.
George Dravilas, 36, of Medinah, and Bridget Hutcherson, 40, of Chicago, were each charged with bank fraud in a criminal complaint filed yesterday and unsealed following their arrests yesterday. Hutcherson was released on her own recognizance, while Dravilas remains in federal custody pending a detention hearing at 3:00 p.m. Friday before U.S. Magistrate Judge Maria Valdez in U.S. District Court.
According to the complaint affidavit by an agent with the U.S. Department of Housing and Urban Development’s Office of Inspector General, a cooperating individual (CI-1) who was arrested in January 2013 identified Dravilas as someone he had worked with to conduct fraudulent mortgage transactions. The FBI initiated an undercover investigation in which CI-1 posed as a mortgage broker who was engaged in fraud and was seeking assistance in structuring fraudulent mortgage loan transactions. Two additional cooperating individuals, including a licensed real estate appraiser, two undercover law enforcement agents who posed as straw buyers of the two properties, and a bank also participated in the investigation.
The complaint alleges that Dravilas agreed to prepare underlying documents to be submitted as part of the fraudulent mortgage loan applications to the bank for the purchase of two residential properties by straw buyers who would receive a share of the seller’s loan proceeds. The two-flats were located in the 6300 block of South Parnell Avenue and the 6600 block of South Sangamon Street in Chicago. Although Dravilas claimed not to own the properties, he allegedly supplied real estate purchase contracts, title commitments, fraudulent and inflated lease rental agreements, money to obtain fraudulently inflated appraisals, and letters extending and renewing the real estate purchase contracts, the charges allege.
Dravilas allegedly schemed to sell both apartment buildings for a fraudulently inflated sales price of $275,000 each, while purporting to kickback $100,000 on each transaction to each of the undercover straw buyers, while keeping a fee for himself and the cooperating individuals.
Hutcherson allegedly received $600 to supply one of the cooperating individuals with fraudulent W-2s, check stubs, and earnings statements in the names of the straw buyers to be used in support of the mortgage loan applications.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Barry McLaughlin, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago. HUD-OIG and FBI agents conducted the investigation through the South Suburban Financial Crimes Task Force, which includes the Cook County Sheriff’s Police Department, the Internal Revenue Service-Criminal Investigation Division, the U.S. Postal Inspection Service, and the U.S. Postal Service Office of Inspector General.
The government is being represented by Assistant U.S. Attorney Andrew S. Boutros.
Bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.