Thursday, August 28, 2008
Lawyer Indicted In Connection With Mortgage Stacking Scheme
Kevin Carey, 48, Middleboro, Massachusetts, a former Somerville real estate attorney, was indicted in connection with allegedly making false statements on mortgage applications and associated documents and using the funds secured from the loans for his own purposes, rather than paying off existing loans as directed by the new lenders. Carey is charged with Larceny over $250 (8 counts) and Willfully Making a False Statement Regarding Financial Condition or Assets (7 counts).
Authorities allege that, while practicing as a real estate lawyer in Somerville and Medford, Carey engaged in a scheme called “mortgage stacking” on four residential properties he or his family members owned. The scheme allegedly involved serially refinancing the loans on these properties, without paying off the existing loans. Carey was also the agent for a New England title insurance company which allowed him to issue title insurance policies on mortgage transactions he processed. Title insurance policies protect lenders in the event that there are defects in the title of the property.
Authorities allege that on various occasions between April 2002 through September 2004, Carey performed the functions of closing attorney on mortgage loans on each of the properties involved. Authorities allege that Carey “stacked” three mortgages on a home in Medford, Massachusetts, two mortgages each on two different properties in Everett, Massachusetts, and one mortgage on his personal residence in Medford. Carey also allegedly falsified information on mortgage loan applications by omitting certain mortgages on the various properties, and also signed a family member’s name on false mortgage applications and closing documents he created. Authorities also allege that when he received the proceeds of the loans, Carey did not pay off the existing mortgages on these properties, but rather used the funds for his own benefit. Authorities further allege that Carey issued title insurance policies or commitments in connection with the transactions, and the lenders were therefore protected. However, ultimately the title insurance company suffered the financial loss. Authorities believe that Carey stole over $2 million dollars in this manner.
Investigators believe that the lenders remained unaware of the problem because Carey continued to make monthly payments on all of the loans. In November 2005, a database search by Fannie Mae flagged the multiple mortgages on one of the properties, triggering a notification to one of the lenders. The lender then notified the title insurance company of the problem. Lawyers for the title insurance company then referred the matter to the Attorney General’s Office in March 2006.
Following an investigation by the Attorney General’s Office, a Middlesex Grand Jury returned indictments against Carey. His arraignment in Middlesex Superior Court has not yet been scheduled.
The case is being prosecuted by Assistant Attorney General Margaret Parks of Attorney General Martha Coakley’s Corruption and Fraud Division, and was investigated by State Police assigned to the Attorney General’s Office and Investigator Carl Mullen of Attorney General Martha Coakley’s Financial Investigations Division. The United States Postal Inspection Service also assisted in the case.
mortgage fraud
I have never heard of mortgage stacking. This was actually very clever in that he used the title insurance to protect the lenders. However, in the case of fraud like this someone always ends up having to pay. In this case it was the title insurance company.
Posted by
somerville movers on 05/27 at 10:32 AM
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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...
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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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