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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Frederic I. Bowles, Jr., 44, McCordsville, Indiana, was arrested on a 12-count indictment returned by a federal grand jury for crimes related to mortgage fraud activities in which he participated during 2003 and 2004. Bowles is charged with six counts of wire fraud and six counts of money laundering relating to the obtaining of fraudulent mortgage loans from an Illinois lending institution. This case was the result of an investigation by the Internal Revenue Service, and the investigation is continuing.
Bowles assisted investors in obtaining fraudulent loans by submitting false loan applications, fraudulent financial documents, and falsely inflated appraisals. These investors obtained the fraudulent loans to purchase properties which Bowles in fact owned and had purchased at a much lower price. Bowles profited by obtaining the fraudulent loan proceeds.
The charges in the Indictment relate to six specific properties which Bowles bought and sold. The total of the loans on these six properties is approximately half a million dollars. As to a property at 2958-60 Broadway, Indianapolis, the Indictment charges that Bowles purchased it for $38,000, and sold it to an investor a couple of months later for $115,000.00. After the loan went into foreclosure, the property was re-purchased by Bowles Group LLP (a company controlled by Bowles) for $38,000, the exact amount he had paid for it the first time.
As to a property at 3668 Birchwood, Indianapolis, the Indictment charges that Bowles purchased it for $27,000, and sold it to an investor two months later for $92,000. After Bowles received a check for his sales proceeds, he made a payment of over $40,000.00 on his personal mortgage for his home in McCordsville.
According to the charges in the Indictment, Bowles purchased distressed properties in the Indianapolis area at a low fair market value price. With the assistance of individuals working with him, Bowles then found investors to purchase the properties from him at a much higher price than the properties were worth. Bowles was president of Aarmor Mortgage Company, a mortgage brokerage business in Indianapolis. The investors in the properties were directed by Bowles’ associates to obtain loans thru Aarmor Mortgage. The loan originators at Aarmor (who were friends and relatives of Bowles) prepared loan applications for the investors which contained false statements as to the down payment source for the loans as well as false statements and documents regarding the investors’ income and assets. Aarmor Mortgage then submitted those loan applications, along with falsely inflated appraisals, to the Illinois lender who agreed to issue the mortgage loans. The lender agreed to issue the loans in large part because the documents provided by Aarmor Mortgage indicated that the investors were making a down payment of approximately 20% of the purchase price of the properties. In fact, the investors made no down payment, rather, they were usually paid money by Bowles to be investors. The 20% down payment (which induced the lender to make the loan) was provided by Bowles, either from his own funds or funds he borrowed from another individual, and then paid back out of the fraudulent loan proceeds.
Bowles profited from the scheme by receiving most of the fraudulent loan proceeds. He then used that money for his own personal use, to further invest in other fraudulent transactions, or to pay individuals who assisted him in his scheme. The investors failed to pay the mortgage loans, the properties went into foreclosure, and the properties were subsequently resold at the approximate price for which Bowles originally purchased them.
According to Assistant U. S. Attorney Susan Heckard Dowd, who is prosecuting the cases for the government, Bowles faces a maximum possible prison sentence of 180 years and a maximum possible fine of $6,000,000.00. Bowles appeared in court following his arrest, for an initial hearing before United States Magistrate Judge Kennard Foster in Indianapolis. Bowles is scheduled to go on trial on these charges before United States District Court Judge Sarah Evans Barker on November 3, 2008.
The Indictment is an allegation only, and the defendant is presumed innocent unless and until proven guilty at trial or by guilty plea.
I find it hard to believe that the lenders would approve these types of loans. Within two months, a home value increases over 300 percent! Bowles is the wrong person that the government should be charging, how about the underwriters of lenders? It is impossible, very impossible as a matter of fact, for any real estate or mortgage broker to close on a deal without the help of the lenders!!! Shame on the Feds for missing the REAL crooks in this scam. They just don’t get it----Wall Street GREED at it’s worst. The Feds announced today that they are investigating the “Big Boys”, they can get enough info here to indict.
Posted by on 09/23 at 09:30 PM
I WONDER IF THINGS WOULD HAVE GONE THIS FAR IF THE INVESTIVEGATING AGENCIES PAID ATTENTION TO THE REPORTS BY THE PUBLIC ABOUT FRAUD??? TOO MANY D A s WANT TO MAKE THE NEWS AND THEY WANT THE BIG ONE.DON"T PAY ANY ATTENTION TO THE PUBLIC.REMBER THIS, THE MORE LITTLE MICE GET AWAY WITH IT THEN THE BIG RATS MOVE IN.DON’T GIVE UP!!! FIND OUT WHERE KING RAT LIVES AND LET HIS COMUNITY KNOW HIM.IF AN OLD PERSON OF 80 YEARS WITH NO COMPUTER CAN DIG UP RECORDS BY DRIVING TO COUNTY OFFICES,THAN YOU CAN TO. I HOPE THAT IF MRS DOLLAR READS THIS SHE COULD INSTRUCT PEOPLE HOW TO GATHER EVIDENCE. NOW LETS GO OUT AND SET RAT TRAPS. G.U. IN TEXAS
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Ownership Rights to Get Another Look TBO.Com
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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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