Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
Rachel 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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In a metro Atlanta case taken down with arrests, the alleged mortgage fraud scheme resulted in the financial gutting of a $3 million condo complex in DeKalb County, Georgia.
As previously reported by Mortgage Fraud Blog, Dossey Richards, 36, Atlanta, Georgia, Lovie Hobbs, a/k/a Lovie Hobbs Hagwood, 47, Lithonia, Georgia, Montra McKenzie, 29, Atlanta, Georgia, Cyrus Davis, 42, Atlanta, Georgia, Marcus Vickers, 35, Ellenwood, Georgia, Rayshuan Harmon, 27, East Point, Georgia, and Michelle Davila, 35, Atlanta, Georgia, were charged in a federal criminal complaint related to a mortgage fraud scheme involving the ”Blue Sky” Condominium complex.
The scheme allegedly included Richards, the owner of Red Hair Investment Group, LLC;
Marcus Vickers, d/b/a Title Depot of America, a closing attorney in the Atlanta area;
Montra McKenzie and Cyrus Davis, both mortgage brokers in the Atlanta area;
Michelle Davila, an employee of Wachovia Bank;
Rahsuan Harmon, who provided fraudulent appraisals as a part of the scheme; and
Lovie Hobbs, an employee with the Internal Revenue Service (IRS) in Atlanta accused of being a straw buyer. The ”Blue Sky” condominium complex is located at 3106 Memorial Drive, Atlanta, Georgia. The defendants allegedly conspired to defraud lenders by inflating the value of units at Blue Sky between March and May of 2008. The complaint alleges that the current listings of 25 units in the complex range in price of between $2,000 and $28,750; however, the inflated sales prices used to fraudulently obtain inflated loans were between $135,000 and $155,000.
FBI Atlanta Special Agent in Charge Greg Jones told the Atlanta news conference, “Today a joint announcement was made in Washington, D.C., that discussed ‘Operation Malicious Mortgage’ and the efforts of law enforcement to jointly address this growing crime problem. Since the spring of 2007, the mortgage industry in the U.S. has suffered severe problems, to include late payment defaults and an increased rate of foreclosures. Contributing to this is the pervasive crime of mortgage fraud throughout the country, and certainly here in Atlanta as well. This overall trend has threatened the stability of the economic markets. The arrest yesterday at Atlanta of a group of individuals, working together, to defraud a lending institution involved an entire residential complex. In recognizing the severe impact of mortgage fraud, efforts are underway to redirect investigative resources to the named cities most dramatically impacted by this and to secure additional such resources in the upcoming budgets. Atlanta is one of the cities noted by DOJ as having a significant mortgage fraud problem.”
“Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation’s housing market and to the peace of mind of millions of American homeowners,” said Deputy Attorney General Mark R. Filip said earlier in Washington, D.C. “Operation Malicious Mortgage and our other mortgagerelated enforcement actions demonstrate the Justice Department’s commitment and determination to combat these criminal schemes, hold their perpetrators accountable and help restore stability and confidence in our housing and credit markets.”
Operation Malicious Mortgage represents the joint collaborative efforts of the FBI, U.S. Postal Inspection Service, Internal Revenue Service-Criminal Investigation Division, U.S. Immigration and Customs Enforcement (ICE), U.S. Secret Service, U.S. Trustee Program, Department of Housing and Urban Development Office of the Inspector General, Department of Veterans Affairs Office of the Inspector General, and Federal Deposit Insurance Corporation Office of the Inspector General. Operation Malicious Mortgage is the most recent coordinated sweep in an ongoing law enforcement effort to combat mortgage fraud, which also included “Operation Continued Action” in 2004 and
“Operation Quick Flip” in 2005.
Mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans. Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower’s financial status, such as overstating the borrower’s income or assets, using false or fictitious employment records or inflating property values. Foreclosure rescue
scams involve criminals who target legitimate homeowners in dire financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.
The President’s Corporate Fraud Task Force, chaired by Deputy Attorney General Filip, is also responding to issues raised by mortgage fraud in the corporate sector. Created in 2002 to investigate and prosecute significant financial crimes, the Task Force includes representatives from ten federal departments, commissions and agencies, in addition to seven U.S. Attorney’s Offices and two Divisions within the Department of Justice, combining the experience of thousands of investigators, attorneys, accountants and regulatory experts. Since July 2002, the Department of Justice has obtained nearly 1,300 corporate fraud convictions, including the convictions of more than 200 chief executive officers and corporate presidents, more than 120 corporate vice presidents and more than 50 chief financial officers.
United States Attorney David E. Nahmias said, “For several years Georgia, and metro Atlanta in particular, stood at the top of the national list in a very bad category: the incidence of mortgage fraud. The coordinated efforts of federal, state, and local law enforcement, improved regulatory oversight and reforms within the real estate industry, and hard work by community groups have moved Georgia down the list over the past three years, but mortgage fraud remains a very serious problem and a major focus of federal law enforcement efforts. We repeat today the warning we have issued many times before, and have carried through on when it was not heeded: If you get involved in a mortgage fraud scheme, and particularly if you are a closing attorney, appraiser, broker, or other person licensed and trusted to protect the honesty and integrity of the real estate market, you will face federal investigation, prosecution, and the potential for spending many years in federal prison.”
Members of the public are reminded that the indictment contains only allegations.
A defendant is presumed innocent of the charges and it will be the government’s burden
to prove a defendant’s guilt beyond a reasonable doubt at trial.
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.
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...
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...
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...
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...
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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.
Rachel 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 
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