Thursday, October 30, 2008
Former Mortgage Broker Pleads Guilty To Fraud
James Mahoney, 57, Mason, Ohio, pleaded guilty in United States District Court to one count of mail fraud affecting a financial institution in connection with his purchase of more than $2.3 million in real estate.
According to a statement of facts filed with Mahoney’s plea, he kept $730,000 from the sale of his house in Middletown, Ohio in 2001 instead of paying off his mortgage and concealed the fact with a fraudulent “Satisfaction of Mortgage” document. In 2006, Mahoney secured a loan for $1,625,000 to buy a house in Butler County, Ohio. He again created a fraudulent document when he refinanced the loan and kept the money instead of paying off his earlier loan.
For at least the last 15 years Mahoney has worked in various aspects of the residential real estate lending business, having been employed by lending institutions and operating his own business.
“Mahoney admitted using his knowledge of the real estate business and his employment position to commit fraud,” said Gregory G. Lockhart, United States Attorney for the Southern District of Ohio.
Mail fraud affecting a financial institution is punishable in by up to 30 years imprisonment and a fine of twice the amount of gain or loss, which in this case could be more than $4.6 million.
Judge Weber set a sentencing hearing for January 28, 2009.
Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division, Gerald A. O’Farrell, Assistant Inspector in Charge, U.S. Postal Inspection Service, and John Rymer, Inspector General, Federal Deposit Insurance Corporation, announced the plea entered today before Senior U.S. District Judge Herman Weber. Lockhart commended the cooperative investigation by FBI agents, postal inspectors and investigators with the FDIC, and Assistant U.S. Attorney J. Richard Chema, who is prosecuting the case.
mortgage fraud
What a stupid closing agent that would accept from an interested party (the borrower) proof of satisfaction document in lieu of verifying directly with the lender of record that the said loans were in fact satisfied. Hopefully this stupid closing agent had adequate E&O;insurance from which the lenders were able to recoup their losses.
Posted by on 10/30 at 07:59 AM
If the satisfaction is filed at the courthouse why would the closing agent call the paid off lender?
Posted by on 01/05 at 06:13 AM
I don’t know of any courthouses that authenticate the documents that are being filed.
In this case the existing 700K mortgage somehow mysteriously satisified without being replaced by a mortgage of equal or greater amount for a borrower who was now seeking a huge cash-out refinance.
Posted by on 01/05 at 07:41 AM
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Some Sources require Registration.
Erie Area Mortgage Broker Gets Prison in Fraud Case
GoErie.com - Erie, PA
Shortly before receiving a nearly three-year federal prison sentence, former mortgage office manager Francis R. Conti told the judge he never meant to defraud any of the homeowners caught up in a widespread local mortgage-fraud scheme.
Three Former Portland-Area Mortgage Brokers Face Fraud Charges
OregonLive.com - Portland, OR
Joel D. Surprenant, Michael Duc Han and Benjamin Lucian Lucescu all were charged with one count of obtaining mortgage loans through materially false and fraudulent pretenses.
Shaker Pair Pleads Guilty to Mortgage Fraud Charges
Cleveland.com - Cleveland, OH
Two Shaker Heights residents recently pleaded guilty to charges involving a mortgage scheme with seven area houses and $3 million in fraudulent loans.
Feds File Charges in Five Mortgage Fraud Cases
Chicago Breaking News - Tribune - Chicago, IL
Federal charges were filed today against 37 people and four companies in five separate mortgage fraud cases.
Feds Fighting Back
Contra Costa Times - Walnut Creek, CA
Mortgage fraud has increased so dramatically in the San Joaquin Valley that a task force of federal, state and local agencies has been formed to fight back.
Private Investigator Sees Rise in Mortgage Fraud Due to Economy
PR Web - Ferndale, WA
In the past 12 months his firm has been retained to conduct over 300 mortgage fraud investigations, a 100% increase from 2007.
Former UGA, NFL Football Player Arthur Marshall Charged With Mortgage Fraud Claims
WJBF-TV - Augusta, GA
He is also accused of defrauding three banks in obtaining loans for seven different properties in Columbia and Richmond Counties.
Cuomo Subpoenas Loan Modification Companies
New York Times - United States
“The entire industry is a scam, in my opinion,” Mr. Cuomo said Tuesday. “These are services that homeowners don’t need to pay for in the first place.”
Defendant Pleads Guilty to Wire Fraud Relating to Mortgage Fraud Scheme
Imperial Valley News - Holtville, CA
Scavitti admitted that between 2003 and August 2008 he unlawfully diverted mortgage funds that were wire transferred into his client office account to his own personal benefit, resulting in losses in excess of $2.5 million.
Fed Drug Report: Double Trouble for Metro Chicago
ABC7Chicago.com - IL
...Chicago street gang members run a network of legitimate businesses and have engineered mortgage fraud schemes, both to launder drug proceeds...
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
Update - US v. F. Jeffrey Miller, et al.
Miller II: Judge Julie Robinson has ruled in favor of the defense motion granting a continuance for sentencing of the 3 convicted defendants: F. Jeffrey Miller, Steve Vanatta and Hallie Irvin. The three will now be sentenced after ruling on post trial motions set for August 10, 2009.
Vanatta has been in custody for over 2 years. Vanetta filed a motion for his release pending sentencing. That motion was denied.
Miller remains free pending his sentencing. He has hired a new attorney who filed a motion to delay Miller's sentencing. In one post trial motion, the defense argues as to what assets are subject to seizure.
Defendant Todd Earnshaw is a Kansas City real estate Broker (and brother in law of Miller). Earnshaw has been indicted in what is commonly referred to as Miller I. A trial date for that matter has been set for January, 2010 in Topeka, Kansas.
The Government filed a motion to revoke Earnshaw's bond and remand him to custody while he awaits trial after learning that he allegedly committed the state crimes of Driving Under the Influence, Handicap Parking Violation and Failure to Control Speed to Avoid a Collision while on pretrial release. Notwithstanding finding that probable cause existed to believe that Earnshaw committed the aforementioned state crimes, Judge Robinson denied the motion, but ordered several strict conditions that Earnshaw must follow pending his trial.
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Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. 
