Charles Patrick Gahan, Grand Rapids, Michigan, a real estate developer, was indicted on August 26, 2014, on charges of conspiracy to commit wire fraud affecting financial institutions for his role in a mortgage stacking scheme wherein he failed to disclose the existence of prior recorded liens and mortgages.
According to the indictment, Gahan conspired with Scott D. Hoeft to devise a scheme and artifice to defraud financial institutions, private mortgage lenders, and real estate title insurance companies of money and property by means of false and fraudulent pretenses, representations and promises, and for the purpose of executing such scheme, and
attempting to do so, did cause to be transmitted, by means of wire communication, mortgage loan funds and other electronic communications in interstate commerce.
Specifically, in conjunction with the sale of real estate owned by his real estate development business, GBW Development, or the purchase and refinance of his own personal residences, defendant defrauded these financial institutions, private mortgage lenders, and real estate title insurance companies, through various means, including: (1) intentionally failing to disclose on title commitments prior recorded liens and mortgages; (2) disclosing on the title commitments the existence of prior recorded liens and mortgages against such properties but intentionally failing to payoff such liens and mortgages as part of the closing transactions; and (3) failing to record lenders’ mortgages with the appropriate Register of Deeds Offices after such closings, all of which affected financial institutions in violation of Title 18, United States Code, Sections 1349 and 1343.
Gahan plead guilty to the charges on August 28, 2014.
