Friday, June 27, 2008

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.

mortgage fraud

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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.

    Posted by  on  07/09  at  06:57 PM