Friday, December 16, 2005

Four Indicted in Chicago Mortgage Fraud Scheme

An Illinois grand jury handed down a twelve-count indictment charging the following individuals in connection with an alleged Chicago mortgage fraud scheme that operated during 1999 and 2000:

Mark J. Helfand, attorney, indicted on 12 counts of bank fraud and aiding and abetting;

Maria Jackson, former loan officer for Aarhus & Associates, Ltd., indicted on one count of bank fraud and aiding and abetting;

Dawn Jackson aka Dawn Brantly, real estate appraiser, indicted on eleven counts of bank fraud and aiding and abetting;

Jacqueline Jackson aka Jackie Jackson, former loan officer for Aarhus, indicted on three counts of bank fraud and aiding and abetting.

According to the indictment:

The defendants would acquire residential properties in Chicago, Illinois that were typically in need of renovation and rehabilitation and were listed for sale at prices below $50,000 with the intent of flipping the properties. Helfand and another attorney supplied the funds to purchase the properties.  The Jacksons would seek individuals to whom they could immediately resell the properties.

Maria Jackson, her husband James J. Jackson, Jr. (not named as a defendant in the indictment), and Jacqueline Jackson solicited friends and relatives to buy properties, enticing potential buyers by promising to help pay for renovations and repairs and help them obtain mortgage loans.  Some of the people that they persuaded to buy properties cold not afford to purchase and were not financially qualified for mortgage loans.  They would gather background information from potential buyers and cause mortgage loan applications to be prepared.  At times, they prepared loan applications as loan officers for Aarhus.  Maria Jackson also referred potential buyers to Home Financial of America Corporation for preparation of loan applications.

Maria Jackson, James J. Jackson, Jr., and Jacqueline Jackson caused materially false information to be placed in mortgage applications, including false information regarding income, assets, employment, source of down payments and/or amount of case to be supplied by the applicants toward the property purchase. Helfand, Maria Jackson and others caused false documents to be created to support the loan applications – including false verifications of deposit, employment and rent.

Dawn Jackson prepared appraisals that misrepresented the current conditions and fair market values of the property.  She appraised properties as if they had been rehabbed and renovated when she knew that they needed rehab and renovation in order to meet the appraised values.  She also represented that the subject properties were comparable to properties that she knew had greater values. On at least one occasion, she prepared an appraisal of a property that she herself intended to sell. 

Maria Jackson, Jacqueline Jackson and others caused the fraudulent mortgage loan applications and supporting documents, including the inflated appraisals prepared by Dawn Jackson, to be submitted to Flagstar through Aarhus and Home Financial.

Helfand attended the closings of the sales in the capacity of attorney for the sellers.  He would write checks at the closings on behalf of the property buyers to cover the buyers’ down payments and closing costs so that they could buy the properties at the inflated values. He would cause the closing statements to falsely state that the funds came from the buyers.  Helfand further gave instructions to agents of the closing company as to how the loan proceeds should be disbursed.  At Helfand’s direction, a portion of the proceeds were distributed to him to reimburse him for any funds he had fronted to the buyers for their down payments.  Helfand also directed the closing agents to issue additional checks payable to him or Beam Financial, a company he controlled, to reimburse the amounts previously supplied to purchase the properties.  He caused the payments to be mischaracterized on the closing settlement statements and other closing documents as payoffs of first and second mortgages when no such mortgages existed.  At Helfand’s direction, the remaining loan proceeds were typically disbursed to him and to Maria Jackson, Jacqueline Jackson, James J. Jackson, Jr., and others.

Flagstar funded numerous mortgage loans in an amount totaling more that $774,000.  When borrowers defaulted, Flagstar was unable to recover the amounts due on the loan as the loans exceeded the property values.

The properties identified in the indictment:

6447 South Honore, Chicago, Illinois

9239 South Drexel, Chicago, Illinois

11641 South Lowe, Chicago, Illinois

8735 Couth Saginaw, Chicago, Illinois

6838 South Elizabeth, Chicago, Illinois

2039 West 70th Street, Chicago, Illinois

8024 South Muskegon, Chicago, Illinois

6829 South Carpenter, Chicago, Illinois

7950 South Marquette, Chicago, Illinois

10259 South Commercial, Chicago, Illinois

24 West 109th Place, Chicago, Illinois

8543 South Escanaba, Chicago, Illinois

In 2002, Flagstar Bank, FSB filed a federal civil lawsuit against Mark J. Helfand, Adrienne Helfand (Mark Helfand’s wife), Beam Financial Corporation, NuAge Benefits Group, Inc., Jacqueline Jackson, James Jackson, Jr., Maria Jackson, Paul Glick, Eduardo Allen, Upright Realty, Inc. and Dabeer Kazmi alleging a scheme to defraud Flagstar by way of mortgage flipping.  The judgment in that case was against NuAge Benefits Group, Inc., Jacqueline Jackson, James Jackson, Jr., and Maria Jackson for $2,979,241.94.  The judgments included a dismissal of claims against Dabeer Kazmi with prejudice.  According to an article in the Chicago Tribune, the claims against Helfand were resolved by way of confidential settlement and Flagstar has not managed to collect the judgment against the Jacksons.

Also according to the Chicago Tribune Article, Maria Jackson and Dawn Jackson once operated the TNT Comedy Club in Lansing, Illinois and were indicted, in 2001, on charges of dealing kilogram quantities of cocaine. They told one government informant that they could launder drug profits through real estate deals, prosecutors said in court papers.  Maria Jackson and Dawn Jackson were convicted of cocaine dealing in 2003 and were each sentenced to 30 months in prison.

mortgage fraud

1. I think that Helfand should have to spend 1 year living in each of the properties involved in this unconscionable miscarriage of justice.  Northbrook these properties ain’t

   Posted by  on  12/12  at  11:48 AM