Builder Convicted of Inflating Home Values

Allison Tussey —  October 16, 2012 — Leave a comment

Paul Wagner, 56, Las Vegas, Nevada, was convicted, following a 12-day trial, of conspiracy and fraud charges for selling houses at inflated prices in order to fraudulently obtain mortgage loans and to defraud federally insured banks and lenders of more than $8 million.

The defendant was convicted of one count of conspiracy to commit bank fraud and wire fraud, six counts of bank fraud, and three count of wire fraud. Wagner is scheduled to be sentenced on Jan. 14, 2013, and faces up to 30 years in prison and a $1 million fine on each count.

Wagner was a home builder in Las Vegas for about 20 years, the last 10 of which he spent building tract homes in the northwest part of the Las Vegas, Nevada, valley. From about 2007 to 2009, Wagner created a scheme to provide large cash incentives to buyers, real estate agents and others to sell his homes. The incentives included Wagner paying buyers’ mortgage payments for several months, making large cash payments to real estate agents and others to find buyers for his homes, and paying buyers’ down payments.

To pay the incentives, Wagner inflated the value of the homes by causing appraisers to create false appraisals. Wagner concealed the incentives from the lenders, who would not have made the loans had they known about his methods. Using this fraudulent scheme, Wagner sold about 78 houses from March 2007 to mid-2009. Many of the homes went into foreclosure after Wagner stopped making the mortgage payments.

Daniel G. Bogden, United States Attorney for the District of Nevada, announced the verdict.

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Daniel R. Schiess.

“Over 140 persons have been convicted of mortgage fraud offenses in Nevada since 2008,” said U.S. Attorney Bogden. “Most of those persons are now serving time in federal prison. Mr. Wagner is the first home builder to be prosecuted and convicted.”

The announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit

Allison Tussey

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