Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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6 Indicted In Scheme Involving 210 Ohio Properties
Julian M. Hickman, 30, East Cleveland, Ohio, and formerly of Centerville, Ohio, Kamal J. Gregory, 34, Centerville, Ohio, Jessica A. Zbacnik, 41, Monroe, Ohio, Robert Mitchell, 42, Vandalia, Ohio, Edward Mcgee, 74, Dayton, Ohio, and Kenneth O. Mcgee, 49, Dayton, Ohio, were indicted on charges of operating an extensive mortgage fraud scheme affecting 210 residential properties, including 205 in Montgomery County, Ohio, along with 63 investors, and leading to foreclosure of more than 90 percent of the properties.
The indictment alleges that the six operated a scheme in which they actively recruited unsuspecting individuals to buy residential properties, the majority of which were low income, dilapidated and otherwise depressed residential properties, at prices artificially inflated above legitimate fair-market values. The alleged scheme involved financing the purchases with $15 million in mortgage loans obtained through fraud committed against 33 lending institutions. The indictment also alleges that the defendants paid kickbacks to the buyers they recruited, promised to pay for all repair costs to the properties and promised to make the mortgage payments until they located suitable renters. The indictment further alleges that the defendants kept $7 million from the loans for their personal benefit.
In addition, the indictment shows that these six defendants operated and controlled various real estate, mortgage and title insurance-related businesses and corporations throughout the Greater Dayton area including Commercial Property Advisor Group (CPAG), Diamond Vision Capital Group, First Union Appraisals, Gem City Professional Services (GCPS), Option One Appraisals, 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.
“These charges grew from other successful investigations conducted by the Dayton Mortgage Fraud Task Force,” said U.S. Attorney Lockhart. “The Task Force will continue to unravel the web of deceit that strangles the neighborhoods where mortgage fraud occurs.”
The 13-count indictment charges all six defendants with one count of conspiracy to commit mail fraud, wire fraud and money laundering. The indictment also contains six counts of mail fraud, two counts of wire fraud involving a financial institution and one count of money laundering conspiracy. Each count carries a maximum punishment of 20 years in prison. The indictment also charges Hickman with three counts of willful failure to file an income tax return, each punishable by up to one year in prison. The indictment includes forfeiture allegations that would require the defendants to forfeit their interests in any property traceable to the fraud.
Agencies participating in the Greater Dayton Mortgage Fraud Task Force, in addition to the FBI and IRS, include the Ohio Department of Commerce Division of Financial Institutions, the Ohio Attorney General’s Office, the U.S. Postal Inspection Service, the U.S. Department of Housing and Urban Development Office of Inspector General, and the Perry Township Police Department.
I am glad that people are getting caught and sentenced for fraud. I know people who have used people for their good credit and that way the investors had no responsibility or tie. That way if something wrong happens the investors don’t get pulled down. I am glad they got caught.
Posted by on 06/27 at 12:18 PM
I am one of the people who were prayed due to my credit score - my question is, Are the banks holding everybody responsible for the balances on the mortgages - Or is everybody filing for chapter 13? I’m guessing that my next step cuz the bank is coming after me for the loan amount and of course I can’t pay for it - I would really love to turn in the person responsible for all this......or is it too late
Posted by on 06/27 at 12:54 PM
LG: You should repay the loan in full if you signed the loan documents. If you don’t, your lender will probably file criminal charges against you. By the way, no need to file BK as loans obtained fruadulently like yours where you falsly certified you made more money than you do, falsly stated you had down payment funds and falsely stated you were making a down payment, and probably falsely stated you were going to occupy the property, can be excluded from the BK at the victim lender’s request. I suspect you will be going to jail for many, many years.
Posted by on 06/27 at 01:31 PM
lg: Don’t listen to SP. He/She is probably a crook him/herself. I suggest you speak to a good lawyer. Fraud has 5 elements: False representation, Scienter, An intention to induce one to act or to refrain from acting, justifiable reliance, and damages. LG if you did not knowingly, with complete understanding that what you were doing was wrong, then you can not be prosecuted for Mortgage Fraud. These INDUSTRY INSIDERS pray on innocent people who know little if nothing about the mortgage industry. You may have had justifiable reliance that the CLOSING ATTORNEY, BROKERS, APPRAISERS, AND AGENTS were not doing something illegal. Talk to a lawyer.
Posted by on 06/28 at 12:30 PM
Believe: Ignorance of the law is rarely a successful defense in the US. This said, telling LG that he can’t be proscecuted because he didn’t know what he was doing was wrong is misleading at best. But I do agree with you, he should talk to a lawyer.
Posted by on 06/28 at 07:44 PM
What I saw in the article:
“unsuspecting individuals to buy”
followed by “the defendents paid
kickbacks to the buyers”
Is it just me, but wouldn’t using
“unsuspecting” and “kickbacks” in
the same paragraph make this somewhat
of an oxymoron?
Oh, and by the way, isn’t it interesting that “now” LG is willling
to tattle tale?
Sadly, many of these “unsuspecting” individuals chose to go along with something that sounded to good to be true and had the deal paid them as
promised w/ no repercussions, they would be happy as clams and STILL
WOULD HAVE COMITTED MORTGAGW FRAUD!
Posted by on 06/30 at 05:30 AM
Well put Schocked! The way I see it, tens of thousands of americans have lost tens of millions in their retirement savings due to rampant mortgage fraud. Moreover, tens of thousands of mortgage industry employees have lost their jobs due to rampant mortgage fraud. If it was up to me, fraudsters like LG would get 20+ years behind bars.
Posted by on 06/30 at 08:33 AM
Just another example of no one wants to take responsibility for their actions. All is well and crystal clear when the money flows into the open hand. Now the hand closes and it’s everyone else’s fault. No sympathy on this end, deal with your mistake!
Posted by on 07/02 at 03:37 AM
I have a question, Why would a lender give an 82 year old, ill women, a 30 yr conventional loan on a home that was completely paid for already? She passed away a year later after signing that loan, after signing a mortgage loan for the full equity of her home? No insurance on loan to cover the loan; in the event of her death, home was paid in full. I think lenders, are just as guilty for this mortgage mess , they act like, they are so innocennt in this crisis.
Posted by on 07/02 at 04:58 AM
LL, Age discrimination is against the law. I don’t mean to sound harsh but where is the personal responsibility? We research what movie to see but we just take someones word on the most important purchase in our life time....that my friend is absurd!!!!
Posted by on 07/02 at 05:29 AM
RL, Did the lender really think, a 82 yr old, ill woman would be around for the next 30 yrs, to repay that loan?
Posted by on 07/02 at 05:34 AM
Luann, lenders used to be able to take into account a borower’s age when considering an application for mortgage. Anti-age discrimination laws prohibited that practice which then prompted lenders to get around the law by requiring all borrowers to carry credit life insurance. Because credit life insurance was either not available to older applicants or was prohibitively expensive, this credit life insurance requirement effectively shut out older applicants from obtaining mortgage loans. Congress quickly got wise to this practice and then passed additional law prohibiting lenders from requiring a borrower to carry credit life insurance.
Posted by on 07/02 at 07:05 AM
So it is, the insurance companies and Congress, that is a fault with these mortgages? So, it ends up in forclosure?
Posted by on 07/02 at 08:11 AM
LL, it’s rare that for a deceased person’s home to go to foreclosure. Typically their heirs will mantain the payments till the property can be sold and the remainining equity be divided per the deceased person’s will. What’s even more rare though is for an elderly person to mortgage a free and clear residence. In the case you describe, I suspect one of the deceased lady’s children, grandchildren, or neice/nephew forged her name to the loan or if she was not completely lucid, they make have tricked her into signing for the loan. This is a common form of elder abuse.
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.
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...
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...
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...
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...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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