Sunday, June 22, 2008
Mortgage Fraud Background Information
The FBI and Department of Justice formulated Operation Malicious Mortgage (OMM) in response to the rapidly escalating mortgage fraud crime problem. This initiative was a multi-agency, coordinated national mortgage fraud effort. From March 1, to June 18, 2008, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged, convicted or sentenced On June 18, 2008, sixty (60) arrests, nationally, were conducted. The FBI estimates that approximately $1 Billion in losses were inflicted by the mortgage fraud schemes employed in these cases.
On June 18, 2008, as part of the Operation Malicious Mortgage initiative, the Dallas FBI executed arrest warrants on eight (8) of eleven (11) individuals sought in a mortgage fraud scheme. As reported yesterday, these individuals were Eric Rulack Farrington, Jr., Regis Lamont Williams, Kevin Ray Sanderson, Tony Earl Anderson, James Edward Jones, Edwin Terrence Bell, Robert John Mason and Christopher N. Williams. Today, a ninth individual, Michael Lewis Andrews, surrendered himself to federal authorities.
Data collected from the FBI, other law enforcement, and industry sources were compared to determine which states were most affected by mortgage fraud in 2007. The top 10 mortgage fraud states for 2007 were identified as follows: Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado and Minnesota.
Forty One (41) Mortgage Fraud Task Forces or Working Groups addressing Mortgage Fraud have been created. The North Texas Mortgage Fraud Working Group is one of the forty one (41).
The following agencies participate in the North Texas Mortgage Fraud Working Group:
- FBI Dallas
- Internal Revenue Service (IRS)
- Housing and Urban Development, OIG (HUD-OIG)
- U.S. Secret Service (USSS)
- U.S. Postal Inspection Service (USPIS)
- Federal Deposit Insurance Corporation (FDIC)
- Bureau of Immigration and Customs Enforcement (BICE)
- Texas Attorney General’s Office
- Dallas County District Attorney
- Tarrant County District Attorney
- Collin County District Attorney
- Rockwall County District Attorney
- Denton County District Attorney
- Kaufman County District Attorney
- Ellis County District Attorney
- Texas Department of Insurance
- Texas Appraisal and Licensing Board
- Texas Real Estate Commission
Each mortgage fraud scheme contains some type of material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. The most common form of mortgage fraud involves illegal property flipping which entails false appraisals and other fraudulent loan documents. Many mortgage fraud schemes are based upon or incorporate some form of illegal property flipping. Emerging and re-emerging schemes in 2007 included builder-bailouts, seller assistance, short sales, foreclosure rescue and identity thefts exploiting home equity lines of credit.
What should homeowners do to avoid these schemes?
- Get referrals for real estate and mortgage professionals. Check the license of the industry professional with state, county or city regulatory agencies.
- If it sounds too good to be true, it probably is. An outrageous promise of extraordinary profit in a short period of time signals a problem.
- Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.
- Look for written information to include recent comparable sales in the area, and other documents such as tax assessments to verify the value of the property.
- Understand what you are signing and agreeing to. If you do not understand, re-read the documents, or seek assistance from an attorney.
- Make sure the name on your application matches the name on your identification.
- Review the title history to determine if the property has been sold multiple times within a short period. It could mean that this property has been “flipped” and the value falsely inflated.
- Know and understand the terms of your mortgage. Check your information against information in the loan documents to ensure they are accurate and complete.
- Never sign any loan document that contains blanks. This leaves you vulnerable to fraud.
Robert E. Casey Jr., Special Agent In Charge, Dallas, FBI, provided the above information for background purposes.
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Mortgage Scam Ends with Prison
The Morning Call
A judge didn't hold back when Shirley Matthews appeared before him Tuesday to be sentenced for stealing from a Monroe County man instead of helping him save his home from foreclosure, as she was hired to do.
Woman Gets Prison Time After Mortgage Scam Conviction
Pocono Record
A New Jersey woman will be spending two to five years in state prison after she was sentenced on Tuesday for promising to help homeowners avoid foreclosure and then keeping the money she was given for their mortgages.
2 Indicted in Mortgage Scam Face New Charges
Newsday.Com
Prosecutors add extra charges to two who are charged in LI mortgage fraud with county legislator, dominatrix and her husband
Untangling Mortgage Fraud in Chicago Condo Buildings
Chicago Public Radio
Why did so many units go into foreclosure all at once? In some cases, the reason can be traced to mortgage fraud.
No Contest Plea Entered in Real Estate Fraud Case
Northbay Business Journal
Juan Carlos Alcala of Windsor pleaded no contest to nineteen felony counts and admitted three special allegations for defrauding real estate investors, money laundering and elder fraud.
Bedford Woman Sentenced to a Year in Prison for Mortgage Fraud
Plain Dealer
Sharon Cox, 49, of Bedford, was sentenced today to a year in prison for mortgage fraud involving money laundering, theft and receiving stolen property from August 2008 through March.
CITIZEN JOURNALISM: Mortgage Fraud High in Area
Washington Times
According to the FBI, Virginia, Maryland and the District are among the top 10 jurisdictions experiencing mortgage fraud.
Former Vegas Resident Charged with Mortgage Fraud in Nevada
National Mortgage Professional Magazine
A former Las Vegas resident has been charged with federal conspiracy and fraud charges for his involvement in a Nevada mortgage fraud scheme involving straw buyers and falsified mortgage loan documents...
Missouri Man Sentenced for Mortgage Fraud
Belleville News Democrat
A suburban St. Louis mortgage company operator has been sentenced to more than 11 years in prison for a mortgage fraud scheme.
12-Year Prison Term in Mortgage Swindle
Washington Post
A Maryland woman who stole millions from Washington area homeowners trying to avoid foreclosure is a "vulture" whose case should serve as a warning to other con artists...
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
More Trial Coverage
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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 
