One Of The Largest Alleged Mortgage Fraud Cases In Country Reportedly Involves 453 Homes

 

"Mortgage fraud has cost this country billions of dollars and has caused much of the nation's current economic hardship," said Attorney General Cordray. "This case clearly demonstrates the value of teamwork and sends the message that if you are engaged in mortgage fraud, we will come after you and prosecute you to the fullest extent of the law."

 

According to the government, the defendants are alleged to have orchestrated one of the nation's largest mortgage fraud cases by enlisting family, friends and others to invest in a real estate company with promises of profit. The enterprise allegedly began with seed money from an investor who transferred funds from a bank account in Latvia. The scheme allegedly involved using straw buyers to purchase homes, falsely claiming home improvements were performed on houses in order to refinance them, and then selling houses to unqualified buyers with the assistance of real estate agents, mortgage brokers and title companies.

 

Lenders allegedly were tricked into believing that the buyers were making at least a 10% down payment when they were not, that the buyers had assets when they did not, and that the properties were worth more than they actually were. According to the indictment, the defendants defrauded lenders through loan application fraud, down payment fraud and loan distribution fraud. The defendants allegedly siphoned off more than $31 million in profits from their criminal enterprise. According to the government, eventually 358 of the homes fell into foreclosure.