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Eight arrests made for mortgage fraud

Posted on June 21, 2012 7:00 AM EST

Local residents were indicted and arrested for their involvement in a multi-million dollar mortgage fraud scheme that lasted almost 5 years. The focus of the investigation involved a condominium located in the Miami-Brickell area. According to the indictment, the individuals charged in federal court were part of a scheme that bilked lending institutions out of $5.7 million. The case will be prosecuted in Miami, Florida with the defendants represented by privately retained criminal attorneys or lawyers from the federal public defender's office. While mortgage fraud is difficult to perpetrate under the current banking standards, federal and state prosecutors are trying to clean up the mess that occurred at the end of the last decade.

The defendants charged in the case are facing charges of mail fraud, conspiracy to commit mail fraud and money laundering. Strawbuyers, a real estate attorney, a real estate broker and a mortgage broker were among those arrested. A title agent allegedly was also involved in the scheme and was charged separately by information. Like her co-defendants she is also charged with mail fraud, conspiracy to commit mail fraud and money laundering. Some would ask why she is charged separately by information rather than being included in the indictment with the rest of her alleged co-conspirators. Often times, cooperating witnesses will not be included in the indictment as they are expected to enter a guilty plea down the road. This is especially the case, when the cooperation began prior to the indictment being handed down by the grand jury.

Another defendant has already entered a guilty plea to charges including conspiracy to commit money laundering and wire fraud. The allegations suggest that this defendant provided false information to banks to acquire loans and received kickbacks for his involvement in the criminal enterprise. He received 46 months in prison at his sentencing hearing. Based on the loss alleged in the indictment, this sentence indicates that this defendant has agreed to cooperate with federal investigations and prosecutors with other investigations and with the offenses for which he was charged.

According to court records, the mortgage fraud scheme used straw buyers to purchase condominium units in the downtown Brickell area. Straw buyer's names were used to secure loans supported by falsified financial documents. The false information was used to secure loans that exceeded the sales price of the units. Two sets of loan documents we used. The first set of documents that reflected the corrects sales price were submitted to the sellers, while a second set of inflated loan documents with the inflated price were presented to the lending institutions. The difference in the monies were taken and divided among the co-conspirators. This scheme is commonly referred to as "double hudding" and is one of the more commonplace types of mortgage fraud. While mortgage fraud is difficult to achieve under the current security standards of the banks, arrests are still being made for mortgage fraud that contributed to the housing collapse in 2008 and 2009.

Eight Miami-Dade Residents Charged in Multi-Million Dollar Mortgage Fraud Scheme, Palm Beach Post.com, June 20, 2012.
Categories: Fraud