Friday, June 13, 2008
Mortgage Fraud Task Force Established In NH
U.S. Attorney Tom Colantuono and Attorney General Kelly Ayotte today announced the formation of the New Hampshire Mortgage Fraud Task Force. This multi-agency Task Force will investigate and prosecute all forms of mortgage fraud which may have occurred or are occurring in this state. It is part of a larger nationwide effort led by the United States Department of Justice to respond to the current crisis in the housing markets caused by rising rates of foreclosures and failure of financial institutions involved in sub-prime lending.
U.S. Attorney Colantuono stated, “Home ownership is one of the important foundations of our economy. American consumers need stable and honest mortgage markets to help achieve the American dream of home ownership. But when dishonest and unethical borrowers, lenders, appraisers, and brokers skew the system with crooked deals which end in failures and foreclosures, the potential ramifications can affect our entire economy.”
Attorney General Kelly Ayotte stated, “A home to keep one’s family healthy and safe is a basic element of the American Dream. Those who use fraud or deception to deprive people in New Hampshire of their fair chance at fulfilling that dream deserve to be vigorously prosecuted.”
The Task Force will include, in addition to the U.S. Attorney’s Office and the New Hampshire Department of Justice, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the U.S. Secret Service, the U.S. Department of Housing and Urban Development Office of Inspector General, and the Internal Revenue Service, Criminal Investigation Division.
FBI Special Agent in Charge Warren Bamford said, “Mortgage fraud is a serious concern and an escalating problem in the United States. Fraudulent mortgage schemes contribute to the current credit crisis in the real estate market and ultimately affect property values. This makes it more difficult for honest, hardworking people to purchase or finance homes. The FBI will continue to work closely with our law enforcement partners to combat this growing epidemic.”
Randy S. Miskanic, Inspector in Charge, U.S. Postal Inspection Service said, “The U.S. Postal Inspection Service is committed to protecting American consumers from misuse of the mails. Combating these frauds is a significant priority for our agency. The unscrupulous acts of these individuals have a devastating impact on consumers, lenders and the nation’s economy. We are pleased to join our law enforcement partners in pursuit of those individuals or groups who commit mortgage fraud.”
“The Secret Service has taken an aggressive stance in the prevention and investigation of mortgage fraud and other forms of identity theft,” said Steven D. Ricciardi, Special Agent in Charge of the United States Secret Service in New England. “The New Hampshire Mortgage Fraud Task Force demonstrates the importance of cooperation among law enforcement to focus resources and respond effectively to uncover and prevent this type of financial fraud.”
United States Department of Housing and Urban Development Office of Inspector General Special Agent in Charge Peter Emerzian said, “Mortgage fraud and white collar crime strikes at the economic heart of the American system. To uncover and prosecute these activities, it’s to everyone’s benefit. These frauds not only harm financial institutions and investors, but also impact homeowners and potential homeowners across the United States. Home ownership is part of the American dream; every instance of mortgage fraud detracts from that dream. Accordingly, the HUD office of Inspector Genral is proud to be part of this exceptional group of law enforcement agencies.”
Tyrone G. Barney, Special Agent in Charge, IRS Criminal Investigation stated that, “Individuals in the real estate and mortgage industries who commit mortgage fraud may be prosecuted on a variety of charges, including tax evasion and money laundering. IRS Criminal Investigation is committed to pursuing individuals who commit these types of crimes, which are typically motivated by greed. IRS Criminal Investigation welcomes the opportunity to work with our law enforcement partners by providing our financial expertise to the New Hampshire Mortgage Fraud Task Force.”
The Task Force has begun active investigations of cases of suspected mortgage fraud in New Hampshire. It will focus its attention primarily on large-scale institutional fraud, but it will consider allegations of any type of fraud relating to the business of granting, marketing, or servicing home mortgages. A mortgage fraud scheme generally contains some type of material misstatement, misrepresentation, or omission relating to the property or potential mortgage relied on by an underwriter or lender to purchase or insure a loan. Often, because initial loans are packaged and resold on secondary markets, the original fraud is concealed until the borrower defaults or some other problem with the loan arises.
Common types of mortgage fraud, uncovered by investigations nationwide can be broken into two groups; fraud for profit and fraud for housing. Fraud for housing generally involves illegal acts by the borrower, and can include misrepresentation of income or job history to qualify for a loan, undisclosed second mortgages, or phantom down payments. In some cases, the mortgage broker assists in or solicits these acts. Fraud for profit can include such practices as equity skimming, property flipping, and mortgage related identity theft.
According to the FBI website, common mortgage fraud indicators include:
• Inflated appraisals
• Exclusive use of one appraiser
• Increased commissions/bonuses paid to brokers or appraisers
• Bonuses paid for fee-based services
• Higher than customary fees
• Falsification on loan applications
• Buyers told how to falsify applications
• Buyers asked to sign blank applications or other forms
• Fake supporting loan documentation
• Purchase loans disguised as refinancing
• Short term investments with guaranteed re-purchase
• Investors used to flip property prices for fixed percentage
• Multiple “holding companies” used to increase property values
Federal law enforcement agencies have been actively investigating these practices even before the recent increase in foreclosures. Here in New Hampshire, authorities have seen an increase in reports of alleged fraudulent activity in the mortgage industry. From 2003 to 2007, the number of suspicious activity reports relating to mortgage fraud nationwide to the Treasury Department has increased dramatically from 6,936 to 46,717. During that same time period, 2003 to 2007, the number of FBI pending criminal investigations of suspected mortgage fraud has increased from 436 to 1,204.
For further information about mortgage fraud, access http://www.fbi.gov and click on “2007 Mortgage Fraud Report.” You can also visit http://www.irs.gov and enter the key words “Mortgage Fraud.”
To report suspected mortgage fraud, please call the Consumer Protection Bureau of the New Hampshire Attorney General’s Office at (603) 271-3641 or the Federal Bureau of Investigation’s Boston Field Office at (617) 742-5533.
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The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.
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A Wyoming woman is facing felony charges accusing her of stealing her sister's identity to obtain a mortgage...then defaulting on that mortgage, leaving taxpayers on the hook.
U.S. Attorney Targets White-Collar Crime
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In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.
Arrests Made in Orlando Mortgage Fraud Roundup
MyFoxOrlando.com
During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.
10 Accused of Mortgage Fraud at PR Coastal Resort
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A developer and nine other people, including a former salsa singer, have been charged in an alleged $14 million mortgage fraud in Puerto Rico...
Strodtman Jury Selected in Mortgage Fraud Trial
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Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.
FHA Digging Out After Loans Sour
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Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...
Mortgage Fraud Probe Nets 105 Across State
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At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.
Mortgage Fraud Increases
MortgageRates.co.nz
The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
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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.
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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 
