imageRachel 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. Email Ms. Dollar

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Feds Get Tough on Mortgage Fraud

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Recent Posts

- Mortgage Fraud Scheme Leads to 83 Count Indictment
- Beazer Homes Settles Accusations of Mortgage and Accounting Fraud
- Closing Agent Indicted for Misappropriating Funds
- Falsified Loan Apps Lead to Criminal Charges
- 4 Indicted For Using Stolen Identities to Obtain Loans
- New Jersey Man Indicted for Mortgage Loan Misreps
- Florida Man Sentenced for Role in $30 Million Mortgage Fraud Scheme
- Ohio Man Charged in Straw Borrower Scam
- Loan Mod Company Ordered to Cease & Desist
- Former Mortgage Broker Pleads Guilty in $1.6 Million Mortgage Fraud Scheme

Tuesday, September 23, 2008

Indiana Man Indicted For Flipping

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.

   

Posted by Staff Reporter on 09/23/08 at 04:42 AM
Mortgage FraudIndiana • Total comments: (2) (0) Trackbacks
  1. 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
  2. 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

    Posted by  on  09/25  at  01:58 AM

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mortgage fraud news



Today's News

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...

Previous Articles

TRIAL COVERAGE

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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Legal Disclaimer.
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.

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