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  The indictment was superseded on September 27, 2008.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.

mortgage fraud

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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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