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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Leader Of Foreclosure Scheme And Mortgage Broker Plead Guilty
Maurice McDowall, 49, and Aleksander Lipkin, a/k/a ”Alex," 29, pleaded guiltyin Manhattan federal court to participating in a wide-ranging home foreclosure rescue scheme, which defrauded homeowners who were facing foreclosure and banks and other lenders who made mortgage and home equity loans. Lipkin also pleaded guilty to participating in another scheme to defraud numerous subprime mortgage lenders. As previously reported by Mortgage Fraud Blog and according to the Indictment to which both McDowall and Lipkin pleaded guilty (United States v. Maurice McDowall, et al., 07 Cr. 1054), and the superseding Indictment to which Lipkin also pleaded guilty (United States v. Aleksander Lipkin, et al., S2 06 Cr. 1179), other documents filed in the cases, and statements made during the guilty plea proceedings:
Regarding the foreclosure rescue scheme, from November 2003 through April 2005, McDowall and Lipkin engaged in a fraud scheme targeting homeowners whose homes, primarily in Brooklyn and Bronx, New York, were in foreclosure or facing foreclosure, by offering them a plan to “save” their homes. The proposed plan included the refinancing of the homeowners’ debt with new, larger mortgages. Because the distressed homeowners typically had poor credit and were not eligible to refinance their debt at favorable terms, the defendants induced them to “sell” their homes to third parties, or straw buyers, who would apply for loans to be used to “save” the home. The defendants promised that once the straw buyer obtained the mortgage, the proceeds would be used to pay off the homeowners’ old debt and make one year’s worth of payments on the new loans. The homeowners were told that, during that year, they could continue to live in their homes and work on improving their finances and credit. Finally, the defendants explained to the homeowners that, at the end of the year, the title to their homes would be returned to them by the straw buyers, with their credit repaired and their homes saved. There were also cases in which the defendants did not explain to homeowners that the plan to “save” their home required them to deed their house to a third party and did not obtain permission to deed the homes to others. In such cases, the defendants effectively stole the property of the homeowners by forging the homeowners’ signatures on various documents that transferred the homes to straw buyers without the homeowners’ knowledge.
In furtherance of the scheme, McDowall and Lipkin submitted loan applications to various banks and lending institutions on the straw buyer’s behalf. In submitting these applications, the defendants regularly used documents containing false or misleading information, including information concerning the straw buyer’s income, assets, and existing debt, to improve the straw buyer’s credit-worthiness. In addition to false statements concerning the straw buyers’ financial profile, the defendants misrepresented to lenders that the straw buyers intended to reside in the property that would secure each mortgage or loan, when, in fact, the properties were already occupied by the distressed homeowners.
McDowall, who directed the daily operations of the scheme, and Lipkin, a mortgage broker who coordinated the submission of fraudulent information to lenders on behalf of straw buyers, obtained more than eighty home mortgages and/or equity loans valued at over $20 million. In some instances, the defendants failed to make even one payment on the loans, causing the loans to default immediately; in nearly every other case, they eventually failed to make the payments and defaulted on the loans, thereby “cashing out” on the properties. As a result, the distressed homeowners lost the titles to their homes and faced eviction, the straw buyers owed the lenders hundreds of thousands of dollars that they were unable to repay, and the lenders suffered losses from the defaulted loans.
The defendants’ profit consisted of the difference between the value of the new and old loans; they also earned at least $1.4 million in fees.
Regarding the subprime scheme, from 2004 through January 2007, Lipkin participated in a scheme to defraud various subprime banks and lending institutions. Lipkin conspired with other mortgage brokers and processors who worked at the mortgage brokerages AGA Capital NY, Inc. (”AGA Capital”) and Northside Capital NY, Inc. (”Northside Capital”), in Brooklyn, as well as with real estate appraisers, loan account executives, a paralegal, a lawyer, straw buyers, and others. Lipkin and his co-defendants submitted loan applications and supporting documents with false information and material omissions, as well as other false documentation such as bank statements, to subprime lenders in order to induce the lenders to make loans that otherwise would not have been funded. In some instances, the conspirators obtained mortgages in the names of persons whose identities had been stolen. During the course of this scheme, AGA Capital, its successor, Lending Universe Corporation, and Northside Capital brokered over one thousand home mortgages and home equity loans with a total face value of at least $200 million dollars. AGA Capital, Lending Universe and Northside Capital earned a total of at least $4 million in commission fees on the loans. The subprime lenders that issued the mortgages and loans brokered by Northside Capital, AGA Capital and Lending Universe have suffered actual losses of at least $4.5 million as a result of the fraud scheme.
McDowall pleaded guilty before United States District Judge Rpbert P. Patterson, and Lipkin pleaded guilty before United States District Judge Richard J. Holwell.
McDowall pleaded guilty to one count of conspiracy to commit bank and wire fraud. He faces a maximum prison term of thirty years and a maximum fine of the greater of $1 million or twice the gross pecuniary gain or loss resulting from the crime, and he must pay restitution to the victims of his crime. In addition, McDowall also agreed to forfeit a total of $2.5 million. He is scheduled to be sentenced by Judge Patterson on September 9, 2008.
Lipkin pleaded guilty to one count of conspiracy to commit mail, wire and bank fraud. He faces a maximum prison term of thirty years and a maximum fine of the greater of $1 million or twice the gross pecuniary gain or loss resulting from the crime, and he must pay restitution to the victims of his crime. Lipkin also agreed to forfeit a total of $7 million. He is scheduled to be sentenced by Judge HOLWELL on October 10, 2008.
Of the four other defendants charged in United States v. Maurice McDowall, et al., one has pleaded guilty and the rest await trial, which is scheduled for June 23, 2008. As to the defendants awaiting trial, the charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty. Of the 26 other defendants charged in United States v. Aleksander Lipkin, et al., four have pleaded guilty and the rest await trial, which is scheduled for November 17, 2008. As to the latter group, the charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Mr. Garcia praised the efforts of the Federal Bureau of Investigation, New York City Police Department, and U.S. Immigration and Customs Enforcement. He also thanked the New York State Attorney General’s Office for its outstanding work in the investigation.
Assistant United States Attorneys Katherine R. Goldstein and Jonathan B. New are in charge of the prosecution.
No, they can’t, because your other home is not collateral to the loan that was foreclosed on.What they can do is get a court order to garnish your wages.
Posted by on 06/08 at 07:15 PM
i know someone who does a lot of mortgage and real estate fraud. How can i report them. i have evidence of fake bank statements and pay studs. i found out exactly how they do everything. please help me do the right thing
Posted by on 06/09 at 01:36 AM
It is guys like this that give the good mortgage lenders a bad rap. I say, throw the key away!
Posted by on 06/09 at 03:14 PM
May of 2006, we sold our home to a man who was a Real estate broker and also a managing member of E&M;Investment group LLC. He told us because our home was in Forclosure we would have to place it in a land trust,so that no other leins or judgements could be placed against it till closeing, and we needed give him a limited power of attorney, plus sign a warranty deed....Now 2 years later we get Forclosure papers and He owns our house! Remax has it up for sale with this mans business partner as owner...We have contacted the Attorney Generals office...and the mortage company....I went threw public records and seen where they have done this to quite a few people in this county and the county their investment group is in....Can anyone else help us?? Thank you
Posted by on 06/17 at 10:58 AM
The Mortgage Broker industry is cleaning out the bad apples. California and everyone else will be much better off.
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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