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imageRachel 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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Monday, July 21, 2008

Denver Realtor Convicted Of Mortgage Fraud And Witness Tampering

Arvin Weiss, 58, Englewood, Colorado, was found guilty of mortgage fraud and witness tampering. The guilty verdict came after a 13-day trial before Senior U.S. District Court Judge Lewis T. Babcock, where the jury deliberated for one day.  Weiss is free on bond.  A status conference is scheduled for October 22, 2008, at which time Judge Babcock will set a sentencing date.  Weiss was found guilty of 16 counts, including 8 counts of mail fraud, 5 counts of wire fraud, and 3 counts of witness tampering.  Other counts had been dismissed earlier in the case.

Arvin Weiss was indicted by a federal grand jury in Denver, Colorado, on April 20, 2005.  The indictment was superseded on September 27, 2008.  The trial began on June 23, 2008.

According to the indictment, as well as facts presented during trial, from June 1998 through January 2002, Weiss devised a scheme to fraudulently obtain money and property from mortgage companies which funded federally insured loans.  Weiss was a licensed real estate broker buying and selling properties as Reserve Capital Funds, Inc.  He acquired numerous single-family residences in the Denver, Colorado area at low prices.  Within a few months, and after some improvements had been made, Weiss resold the properties at substantially higher prices to unsophisticated low-income buyers.  The buyers Weiss targeted were Hispanics who knew little or no English, many of whom were living in the United States illegally.

Many of Weiss‘ buyers did not understand the mortgage loan process, but wanted to purchase their own homes even though they could not legitimately qualify for mortgages.  Weiss arranged for buyers to acquire mortgages insured by the Federal Housing Administration (FHA), so they could purchase homes his company owned.  Knowing that the buyers he targeted could not afford to buy houses or legitimately qualify for home loans, Weiss allegedly arranged for false information about the buyers’ qualifications and the sources of their down payments to be provided to various mortgage companies and HUD, making it appear that the buyers were qualified to receive FHA insured loans when they were not.

Operating under the name of Fairfax Homes, Ltd., Fairfax Express Corporation, or Fairfax, all entities controlled by Weiss, the defendant would represent to prospective buyers that he had houses or could find houses the buyers could purchase, and that he and an assistant would take care of all the necessary paperwork.  The defendant also told buyers that they would not have to make the down payments from their own funds, despite a requirement by HUD to do so. 

The buyers would provide their personal information directly to him or an assistant.  Weiss would then provide information about the borrowers, some of which was true, but material portions of which were false, to the mortgage companies and HUD, injecting false information about the borrowers’ qualifications when necessary to enable them to qualify for the loans.

Weiss would secretly provide the funds for the down payments for the borrowers to be presented by the borrowers at closing.  Weiss signed numerous false certifications that he had not and would not pay or reimburse the borrowers for any part of their cash down payments.

Weiss usually sold his properties for two or three times what Reserve Capital had recently paid for them.  The buyers typically did not have the option of competitive pricing and did not contest his asking price, because they could not legitimately qualify for the loans.  In some cases, Weiss did not disclose the true purchase price to the buyers until closing.  In many cases, by encouraging the buyers to move into the properties rent free prior to closing, Weiss minimized the possibility that they would back out of their purchase agreements when they were informed of the properties’ true cost.

“Commit mortgage fraud and you may land in federal prison,” U.S. Attorney Troy Eid said.  “Enough is enough.”

Weiss faces not more than 5 years in federal prison and/or a $250,000 fine per count of mail fraud and wire fraud.  In addition, he faces not more than 10 years in federal prison, and/or a $250,000 fine per count for witness tampering.

The case was investigated by the Office of the Inspector General for Housing and Urban Development (HUD), the Federal Bureau of Investigation (FBI) and the U.S. Postal Inspection Service.  The case is being prosecuted by Assistant United States Attorneys Linda Kaufman and Tim Neff.

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Posted by Staff Reporter on 07/21/08 at 09:52 AM
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Today's News

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The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.

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In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.

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During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.

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Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.

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Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...

Mortgage Fraud Probe Nets 105 Across State
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At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.

Mortgage Fraud Increases
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The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.

Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty.

F. Jeffrey Miller Update - October 20, 2009

A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.

Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied

Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.

The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.

Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.

The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.

Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.



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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.

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