The US Attorney's office for the Northern District of New York announced in May that Matthew J. Kupic and Francis Thomas Disonell were both sentenced to 24 months in federal prison, payment of $887,312 of restitution and forfeiture of $600,000 representing fraudulent mortgage proceeds received by the pair. Between 2000 and 2003 Kupic and Disonell operated a company called Team Title Abstractors Real Estate Consultants, which they used to seek out properties "for sale by owner" (FSBO), then recruit straw borrowers and arrange for false information to be provided for their mortgage loan applications.
The US Attorney's office in Newark announced in January the indictment of thirteen individuals associated with an allegedly fraudulent home equity line of credit (HELOC) scheme carried out at a brokerage firm in Palisades Park, New Jersey called American Macro Growth. Between 2004 and 2005 the scheme allegedly generated about $20 million of fraudulent loan proceeds from sixteen major mortgage lenders.
Four of the individuals charged were mortgage brokers at American Macro Growth, including the company's principal, Jacob Kim. The other nine defendants were individuals who obtained fraudulent credit lines through the company, whose brokers are accused of helping customers obtain multiple home equity credit lines with the same colalteral with loan amounts in excess of the collateral property's value. One of the tactics used by American Macro Growth was said to have been scheduling of transactions such that existing lenders' security interests in the property wouldn't be recorded when new lenders ran a check.
According to the US Attorney's statement, American Macro Growth also helped some customers obtain business credit lines, with the plan to use these to buy houses and pay off existing mortgages, then apply for additional HELOC financing.
The US Attorney's office in Raleigh announced in June that Kelley Anne Spaulding of Durham, North Carolina and Elizabeth Whitaker Clement of Raleigh both pleaded guilty to a charge of conspiracy to commit wire fraud. Spaulding and Clement had been accused of submitting fraudulent documents for mortgage loan applications to internet lender E-Loan of Pleasanton, California. According to the US Attorney's statement, some of the fraudulent loans obtained through their scheme, allegedly carried out with the help of a co-defendant, involved the use of stolen identities.
The US Attorney's office for the Southern District of Ohio announced in April that Randall L. Webb of Springboro, Ohio was sentenced to fifteen months in federal prison, a sentence that would run concurrent with a sentence imposed on Webb by the Montgomery County (Ohio) Court of Common Pleas for his role in a foreclosure rescue scheme in the Dayton and Cincinnati areas.
Webb used an entity called American Foreclosure Group LLC to solicit advance fees of $600 to $700 from homeowners facing foreclosure with a scheme to help save their homes, then rather than contacting the lenders as promised, allegedly filed bankruptcy petitions for the homeowners without their knowledge.
The US Attorney's office in Cincinnati announced in May that Steven C. Gittinger, the owner of Classic Title Agency, pleaded guilty to one count of conspiracy to commit bank fraud and one count of bank fraud for his role in preparing false closing documents for real estate transactions that were tainted by mortgage fraud. According to the US Attorney's statement on the case, lenders lost between $400,000 and $1 million for funding loans generated by the activities of Cincinnati ring served by Gittinger's agency.
The US Attorney's office for the Southern District of Ohio announced in May that former Columbus, Ohio real estate investor Aryeh Schottenstein pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering in connection with a mortgage fraud scheme operated in the Columbus area between 2003 and 2005. Schottenstein and co-defendant Jeffrey Lieberman (who pleaded guilty in April) were accused of using an entity called Parkview Bank to obtain financing from a New York-based hedge fund for a scheme to buy and flip dilapidated houses in the Columbus area.
Co-defendants Shawn A. Griffin and Donald F. Green also entered guilty pleas to conspiracy and other charges for their roles in the scheme. According to local press reports, Griffin and Green were involved in the purchase and flipping to straw buyers of hundreds of Columbus area homes, many of which have since gone into foreclosure. In some cases, said an August 2007 report in the "Columbus Dispatch," appraisals on the homes used in the schemes involving Griffin and Green had been inflated by 200% to 300% over their likely market values. Griffin, Green, Schottenstein, and six co-defendants were charged in a 2007 federal grand jury indictment.
The US Attorney's office in Maryland announced in June that four individuals who used television ads to solicit homeowners facing foreclosure for a purported lease/buyback program have been indicted by a federal grand jury on charges of wire fraud and conspiracy to commit wire fraud. Michael K. Lewis of Upper Marlboro, Cheryl Brooke of Upper Marlboro, Earnest Lewis of Takoma Park and Winston Thomas of New Carrolton are accused of offering a fraudulent foreclosure rescue scheme that involved a transfer of title to defendant Earnest Lewis, followed by a bankruptcy filing for the homeowner, and a program for the homeowner to pay rents in amounts higher than their original mortgage payments to an entity called In the House Technologies while defendants arranged for new mortgages on the properties. After allegedly receiving a portion of loan proceeds in the form of contrived fees and expenses, the mortgage loans were allowed to go to default.
The US Attorney's office for the Southern District of Ohio announced in June the indictment of six individuals in connection with an alleged mortgage fraud scheme involving over 200 houses, 63 straw-borrower "investors" and over a dozen real estate and mortgage companies operated by the defendants. About 90% of the properties in the alleged scheme were foreclosed on by lenders.
Julian M. Hickman of East Cleveland, Ohio; Jessica A. Zbacnik of Monroe, Ohio; Kamal J. Gregory of Centerville, Ohio; Robert Mitchell of Vandalia, Ohio, Edward Mcgee of Dayton, Ohio and Kenneth O. Mcgee of Dayton, Ohio have been charged by a federal grand jury with one count of conspiracy to commit mail fraud and wire fraud, six counts of mail fraud, two counts of wire fraud and one count of money laundering conspiracy. Hickman was also charged with three counts of wilful failure to file a tax return.
The defendants are accused of recruiting inexperienced people to act as real estate investors, then flipping properties to them at inflated prices. Straw buyers allegedly received kickbacks from loan proceeds for their participation in the scheme. The ring is accused of diverting $7 million of the $15 million of loan proceeds generated by thirty-three banks.
According to the US Attorney's statement, the indictment claims that defendants used the following entities to carry out the mortgage scheme: Commercial Property Advisor Group, Diamond Vision Capital Group, First Union Appraisals, Gem City Professional Services, Option One Appraisal, JMH Real Estate, River City Appraisers, Alliance Mortgage, Gregory Investments Inc., KG Enterprises, Mad River Properties, Premier Mortgage Funding of Ohio, Star Point Mortgage, Ohio Financial Group, Mortgages Unlimited, Allied Mortgage, E&A Investments, and KM Investments.
The US Attorney's office for the Western District of Pennsylvania announced in January the sentencing in Pittsburgh federal court of Monroeville, Pennsylvania mortgage broker William D. Edgar, who received a sentence of 37 months in federal prison and five years of supervised release for his conviction on charges of conspiracy, bank fraud, and wire fraud.
Edgar had been accused of using his mortgage brokerage firm called America's Mortgage Outlet in collusion with associates to generate over $3 million of fraudulent mortgage loans on some seventy properties. According to the US Attorney's statement, the scheme involved submitting applications for refinancing at inflated home values to lenders for what were really real estate purchase loans.
The US Attorney's office for the Western District of Oklahoma announced in March that Terry Hugh Mahon of Broken Arrow, Oklahoma was convicted by a federal jury on charges of conspiracy, mail fraud and money laundering. Mahon used a company called Rebates International based in Hollister, Missouri to market so-called "cashback rebate coupons" that he had claimed would enable homeowners to pay off their mortgages in five years by paying about 17% of their home's value to Mahon's company, which would invest the money in a high-yield investment program (HYIP) boasting 60% annual returns.
Witnesses at Mahon's trial reportedly testified that some victims refinanced or took out additional mortgages on their homes to come up with the funds to pay over the 17% of their home's market value to Mahon. About $50,000 of the funds received by the Mahon company was sent to a fraudulent international HYIP scheme called OsGold which peddled accounts in a bogus online gold-backed currency.
Mahon's co-defendants - Grover Harold Phillips of Stillwater, Oklahoma and Emzie Huletty of Oklahoma City both previously pleaded guilty to related charges in the case. Huletty operated companies called EASE Corporation, Vision Services Inc. and Sunset Financial Group that were reportedly used in the scheme.
A federal-state joint action group called the Western Pennsylvania Mortgage Fraud Task Force announced in March that three new federal mortgage fraud cases had resulted from its recent investigations.
One case centered on entities called Pope Financial Services and Sprouts Mortgage. Principal Michael McFerron Pope and associate James Andrew Spike were charged with conspiracy while co-defendants Marlin Sprouts and Tiffany Sprouts entered guilty pleas for their roles in a scheme to recruit straw buyers for properties in Peters Township and Upper Saint Claire, Pennsylvania betwen 2002 and 2006.
A second case involves a mortgage brokerage called Precision Mortgage which allegedly submitted false loan applications and other information which allowed some individuals in the alleged twelve-member mortgage fraud ring to receive cash back at closing for bogus construction work invoices. Several of the defendants have entered guilty pleas in this case.
In a third case, six defendants associated with the activities of a mortgage brokerage called Peoples Home Mortgage were charged with conspiracy and other offenses for their alleged participation in a scheme to submit false loan applications and inflated appraisals to lenders