Rachel 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

Mortgage Fraud Blog is co-sponsored by Interthinx the leading provider of fraud services and solutions for the mortgage industry.



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Recent Posts

- Ohio Mortgage Fraudster Sentenced To 20 Months
- Missouri Man Pleads Guilty To Loan And Appraisal Misreps
- Lawyer Pleads Guilty to Stealing $4M From Real Estate Closings
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- Arizona Man Indicted for Mortgage Loan Assistance Scam
- Leader Of $10M Mortgage Fraud Scheme Gets 8 Years

Thursday, October 09, 2008

Leader Of Foreclosure Rescue Scheme Sentenced To 10 Years In Prison

Maurice McDowall, 50, was sentenced to ten years in prison for his participation 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. According to the Indictment to which McDowall pleaded guilty in June 2008, other documents filed in this and related cases, and statements made in Manhattan federal court:

As previously reported by Mortgage Fraud Blog, from November 2003 through April 2005, McDowall 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 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 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, 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 thousand 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.

McDowall was sentenced to 120 months in prison and three years of supervised release, with 100 hours of community service to be performed in the first year after release. In addition, McDowall was also ordered to forfeit $2.5 million and indicated that restitution would be determined at a later date.

Of the five other defendants charged in United States v. Maurice McDowall, et al .: Aleksander Lipkin, Marina Dubin, and Kerri Clarke have pleaded guilty and await sentencing; and ANDREA MOORE and Michael Irving await trial, which is scheduled for October 20, 2008. As to the defendants awaiting trial, the charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Mr. Garcia praised the work 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.

   

Posted by Staff Reporter on 10/09/08 at 04:29 AM
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Because she had title insurance, Kunda will probably get back her money from the 2007 purchase, but the incident highlights cracks in the real estate market and the risk from international scammers who are growing more sophisticated.

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The U.S. Justice Department has formed more than 40 mortgage fraud task forces nationwide as prosecutors and investigators struggle with a flood of mortgage-related criminal cases. The FBI reports that its mortgage-fraud caseload has more than doubled in three years to about 1,600 investigations that have cost lenders at least $4 billion. About 200 FBI agents are assigned to the cases, up from 120 a year ago.

Yanchek may take plea deal
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Sarasota attorney John Yanchek is expected to plead guilty to mortgage fraud next week, statements from a federal prosecutor and the judge presiding over the high-profile criminal case seem to indicate.

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Two former Bear Stearns hedge fund executives are slated to go to trial in September over charges that they lied to investors about two of the funds they managed

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Reported incidents of mortgage fraud grew by 45 percent in the second quarter compared with the year-ago period.

Report Finds Tampa No. 2 In Florida For Iffy Mortgages
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In a state that leads the nation in mortgage fraud, Tampa had the second most cases of suspicious loan activity of any Florida city, according to a report released this morning from the Reston, Va.-based Mortgage Asset Research Institute.

Mortgage Fraud Jumps by 45% on Fewer Loan Applications in U.S., Per... MARI
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Key findings from the MARI Quarterly Fraud Report include that fraud most often occurs at the beginning of the loan process. More than 65 percent of fraud incidents are attributed to "General Application Misrepresentation"

Seven Are Accused Of Identity Theft And Mortage Fraud
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Seven people have been arrested in connection with an international identity-theft scheme that targeted home equity lines of credit and siphoned at least $2.5 million away from dozens of banks, including more than 10 in New Jersey, according to documents unsealed today.

Suthers Cracks Down On Mortgage Fraud
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Suther’s office also indicted 10 individuals last March in an $11 million mortgage fraud ring involving 34 local properties...Several other investigations of mortgage fraud are ongoing.

Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty.

U.S. v. Miller, et al.

Thursday, December, 18, 2008

Verdict:

F. Jeffrey Miller Guilty of Conspiracy and Money Laundering

Steven Vanatta Guilty of Conspiracy , Money Laundering and Bank Fraud

Hallie Irvin Guilty of Conspiracy , Money Laundering and Bank Fraud

Sandra Jo Harris Not guilty- all counts



More Trial Coverage

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© Copyright 2004-2007 Rachel M. Dollar

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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