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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Georgia Lawyer Pleads Guilty in Mortgage Fraud Scheme
Michael M. Hipe, 42, Snellville, Georgia, pleaded guilty in federal district court to conspiracy to commit mortgage fraud. In May 2006, Hipe was indicted along with co-defendants Eric Friedman, Brianne Friedman and Timothy Bauer on two counts of conspiracy to commit mail fraud and money laundering, two counts of mail fraud, and eight counts of money laundering.
According to authorities the information presented in court: In 2000, Hipe and co-defendant Eric Friedman became partners in an used car sales business called “Hipe Motors” in the metro Atlanta area. Hipe invested in the business and Eric Friedman ran the business. In order to raise money to operate the business, in the summer of 2000, Hipe purchased four new condominiums in the metropolitan Atlanta area. Eric Friedman prepared false loan applications and supporting documentation, including tax returns, which misrepresented Hipe ’s income.
At the real estate closings, Hipe signed the false loan applications, certifying them as accurate and true.
In order to pull money out from the closings, Eric Friedman and Hipe misrepresented to the lenders that a portion of the loan proceeds would be used for the renovation and construction of the properties, even though the condominiums were new or otherwise did not need renovation or upgrade. Further, Eric Friedman and Hipe misrepresented to the lenders that the construction work was to be performed by “The Fabricators, Inc.,” which in fact was a name of a shell company, not incorporated in the State of Georgia. Eric Friedman and Hipe used the monies to finance Hipe Motors and for Eric Friedman’s personal expenses. The funds obtained at closings were run through Hipe ’s bank accounts and then run through Eric Friedman’s and Brianne Friedman’s bank accounts. Eric Friedman was supposed to obtain tenants for the condominiums and buy cars for the business, but failed to do so.
When Hipe was unable to obtain further financing to purchase condominiums, he introduced his mother and a family friend, both of whom live and work in Massachusetts, to Eric Friedman. Eric Friedman persuaded Hipe ’s mother to act as a “straw purchaser” on the purchase of three condominiums in Atlanta to provide funds to operate Hipe Motors. Eric Friedman prepared loan applications containing false information and supporting documentation, including tax returns which misrepresented Hipe ’s mother’s employment and income. At two of the three real estate closings for his mother, Hipe , along with Eric Friedman, acted as her attorneys, and executed the documents, including the loan applications.
Eric Friedman also persuaded Hipe ’s family friend to provide him with his credit information. Once Eric Friedman obtained that information, he opened a checking account at Wachovia Bank in the name of the family friend “d/b/a The Fabricators, Inc.,” .
In June 2002, at Eric Friedman’s behest, the family friend purchased 104 Chablis Court, Braselton, Georgia, as a home for Eric Friedman and Brianne Friedman and for the purpose of pulling money out of the transaction to further finance Hipe Motors . The transaction was also financed through the submission of a false loan application prepared by Eric Friedman. At Eric Friedman’s behest, in February 2004, the family friend sold that property to straw purchaser/borrower Timothy Bauer to obtain more money. At that real estate closing, Bauer signed an Eric Friedman-prepared false loan application, which misrepresented his income and his intentions to reside at that address.
The lenders have foreclosed on all seven condominiums that Hipe and his mother purchased, because Eric Friedman, Hipe , and Hipe ’s mother have failed to make the monthly mortgage payments. The lenders’ loss amount on the condominiums exceeds $500,000. Hipe pleaded guilty to one count of conspiracy to commit mail fraud. He could receive a maximum sentence of five years in prison and a fine of up to $250,000.
Sentencing for Hipe has not yet been scheduled. On August 23, 2006, co-defendant Eric Friedman pleaded guilty to conspiracy to commit mail fraud, attempt to evade the payment of income taxes, credit card fraud, and interstate transportation of cars obtained by fraud. He could receive a maximum sentence of forty years in prison and a fine of up to $1,250,000. No sentencing date is scheduled. Trial for Brianne Friedman and Timothy Bauer is scheduled for December 11, 2006.
“Mortgage fraud destroys neighborhoods and increases borrowing costs for all home buyers,” said Georgia United States Attorney David E. Nahmias. “We will continue in our efforts to stamp out mortgage fraud, which has become a plague on Georgia’s real estate industry. We will continue in particular to focus on lawyers and other professionals who are involved in mortgage fraud. They know the rules, and when they break them, they should expect one day to end up in prison.”
James Byers, Special Agent in Charge of the Atlanta field office of the United States Secret Service, said of the case, “I am very proud of the successful completion of this investigation by the agents of this office and our partners at the Internal Revenue Service. The Secret Service will continue to aggressively investigate cases like this, which have significant impact on our community’s economy.”
Wells Fargo is the king of Mortage Fraud...but not the way you usually think of it. How they keep their products in line is by stealing from the rich and giving to the poor (which is a smaller # of individuals using that shady bank).
Be careful with Wells Fargo Home Mortgage and their mortgage tactics.
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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