Friday, June 20, 2008

6 Indicted For Fraud In Operation Malicious Mortgage

Six people were indicted by a Federal Grand Jury in Seattle, Washington for Conspiracy and Wire Fraud in connection with an estimated $8.5 million mortgage fraud scheme conducted in 2004 and 2005. Those indicted include a lawyer (since disbarred), a former bank loan officer and a mortgage broker, as well as the owner of shell companies involved in flipping dozens of properties as part of the fraud. Some of the defendants will make their initial appearances in U.S. District Court in Seattle, including Robert Ernest Brandt, 40, the attorney who funneled money in the scheme through his client trust account.

According to the Indictment returned in the Western District of Washington, Brandt and William Anderson, 47, Bellevue, Washington, conspired with Mustafa “Marc” Khosraw, 46, Sammamish, Washington, Isaac Palmer, 42, North Bend, Washington, Kristyn Jupiter Moss, 38, Tacoma, Washington, and Zachary Joseph Namie, 30, Seattle, Washington, to defraud banks and other financial institutions using a mortgage fraud scheme. The conspirators would identify houses and would use shell companies or third parties to purchase the homes. At the same time they recruited straw buyers who would enter into a purchase agreement to buy the same home from the conspirators at an inflated price. The conspirators assisted the straw buyers with phony paperwork for the home loans, making it appear that they were qualified for the mortgage loans and planned to occupy the houses. Members of the conspiracy allegedly falsified numerous documents including appraisals, verifications of deposits, employment verification and closing documents. In fact, the conspirators simply split the proceeds from the fraudulent mortgages, and the straw buyers defaulted on the loans after pocketing as much as $20,000 for their fee. The homes were foreclosed and financial institutions and mortgage lenders suffered substantial losses.

The properties involved in the scheme as set forth in the indictment are:

7133 45th Avenue South, Seattle;

13039 6th Place South, Burien;

3513 SW Webster, Seattle;

2616 15th Street, Tacoma; and

8501 71st Street, Mercer Island, all of Washington.

The defendants served various roles in the scheme. Anderson operated SFN, LLC, and Sterling Investments—shell companies that initially purchased numerous properties. Anderson and Moss, then a loan officer for Viking Bank, allegedly created many of the false documents. Brandt and Anderson jointly ran a company called Escrow Authority, that closed the sales of the properties. Khosraw, a mortgage broker, and Namie, a loan officer with a mortgage company, allegedly created and submitted some of the false documents. Palmer operated a construction company called GMI Construction, and allegedly recruited straw buyers and falsely claimed that some of them worked for him.

The indictment was unsealed in conjunction with a nationwide emphasis on mortgage fraud as part of Operation “Malicious Mortgage.” From March 1 to June 18, 2008, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged, convicted or sentenced. The national takedown of mortgage fraud schemes, is the culmination of substantial coordinated efforts during the last three and a half months to identify, arrest and prosecute mortgage fraud violators through the United States. Operation Malicious Mortgage highlights the strong enforcement response undertaken by the Department of Justice and its law enforcement partners to combat the threat mortgage fraud poses to the U.S. housing industry and worldwide credit markets.

Wire Fraud is punishable by up to 20 years in prison and a $250,000 fine.

The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the FBI, King County Prosecuting Attorney’s Office and the Washington State Department of Financial Institutions (DFI). The case is being prosecuted by Assistant United States Attorneys Vincent T. Lombardi and Nick Brown.

mortgage fraud

1. I would like to know if Popular Mortgage Company 856-396-2600 is listed as a fruad company.  I have a relative that was mislead by them and is in the process of lousing his home.  He has lung cancer and cannot work, the house is not worth what they allowed (gave him a loan for).

   Posted by  on  06/20  at  12:04 PM

2. Does anyone know when this will go to trial?  This is so wrong and I hope they find EVERYONE involved… which so far they have not charged EVERYONE involved!!!!!

   Posted by  on  05/13  at  09:48 AM

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Today's News

Some Sources require Registration.   Marco Island Man Arrested in Ohio on Grand Theft Charge Naples News A man who claimed he was a broker is accused of bilking a long-time family friend out of more than $130,000. Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc. Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010. Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area. Lend America, VP Ashley Banned from FHA Housing Wire Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week. Countrywide Tries to Pin Blame on Insurer Court House News Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse. Investors Say They Were Swindled in Property Scheme Fox 13 Now Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches. Greenfield Man Accused of Housing Scam The Republic A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said. Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes. Ownership Rights to Get Another Look TBO.Com State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County. Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty. Follow Anne on Twitter. Thursday, February 18, 2010 F. Jeffrey Miller Trial - 1 Convicted, 3 Acquitted The jury deliberated for approximately 3 days after receiving their jury instructions. They asked one question: Does ‘common sense' allow us to deduce what the banks may or may not been influenced by in order to make a loan? Judge Julie Robinson responded by admonishing the jurors to read all of the instructions. The jury presented its' verdict... Read More... Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony As reported by Anne Mitchell, who viewed the trial: Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the... Read More... Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony Steve Middleton Testimony - Coverage Provided by Anne Mitchell The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's... Read More... Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination According to Anne Mitchell, who is present in court for the trial: Next Witness: Kelly Sanford Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in... Read More... Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued According to Anne Mitchell, who is viewing the trial: January 13, 2010 Witness: Rick Hayes Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John... Read More... More Trial Coverage

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All Foreclosure Information and Resources Housing Storm Calculated Risk Mortgage Lender Implode-O-Meter Home Gain Blog Rain City Guide Real Estate Tomato Blood Hound Blog Appraiser Active Fraud, Phishing and Financial Misdeeds The Collar - US News and World Report Georgia Bankruptcy Blog Fighting Fraud Newsday Real LI Matrix