Fred Loewinger, 62, Strongsville, Ohio, pleaded guilty to 25 felony mortgage fraud related offenses on October 27, 2010, for his participation in financing the purchase of 20 houses with $1.4 million in fraudulent loans. Loewinger owned Fast Mortgage Services, Inc. and conducted his fraudulent activities as a licensed mortgage broker and loan officer.
Fred Loewinger was the main defendant in a criminal enterprise that involved thirteen (13) co-defendants who fraudulently engaged in financing these homes in Cleveland, Ohio. Loewinger pleaded guilty to one count of engaging in a pattern of corrupt activity, one count of money laundering, three counts of theft by deception, and 20 counts of tampering with records. Sentencing is scheduled for December 16, 2010 at 9 am. He faces a maximum of 128 years in prison.
This fraudulent enterprise utilized 3 schemes to deceive lenders: loan application fraud, down-payment scheme, and kickbacks to defendants upon closing the sale of the house. The defendants also engaged in a scheme called “double HUD,” where the title company submitted bogus settlement statements, called a “HUD-1,” to the lender showing a higher purchase price and then created another set to the seller with the lower and actual purchase price.
Fred Loewinger orchestrated this criminal enterprise while he was a licensed loan officer and owner of Fast Mortgage, and the owner of MJL Processing, Ltd., Inc. He submitted the fraudulent loans to the lenders, arranged for bogus down payments, and deposited kickback money into accounts with Fast Mortgage and MJL Processing. The money was then distributed to other defendants. Two other main defendants, Mitchell Petti, 38, and his brother Mark Petti, 43, both of Sagamore Hills, Ohio, were the owners and operators of Titles Etc. and fraudulently closed these loans. 85% of these houses fell into mortgage or tax foreclosure. The trial date for the Petti brothers is schedule for December 6, 2010, when Fred Loewinger and others who have pleaded guilty will be called as a witness to testify against the Petti brothers.
This case was investigated by the Cleveland office of the FBI in connection with their participation in the Mortgage Fraud Task Force.
County Prosecutor Bill Mason and the Cuyahoga County Mortgage Fraud Task Force operating under authorization of Ohio Attorney General Richard Cordray and Ohio’s Organized Crime Investigations Commission announced the guilty plea.
Prosecutor Mason said, “Mortgage broker and loan officer Fred Loewinger was a major player in the rampant mortgage fraud and related foreclosure epidemic in this county. This plea to 25 felony charges represents the collaborative work of the Cuyahoga County Mortgage Fraud Task Force including the FBI and Ohio Attorney General Richard Cordray’s Office.”
With funding from the Ohio Attorney General’s Office and the Organized Crime Investigations Commission, the Task Force was formed in December 2007. The Task Force is comprised of federal, state, and local enforcement agencies: Cuyahoga County Prosecutor, FBI, U.S. Attorney’s Office, HUD Inspector General’s Office, U.S. Postal Inspector, Ohio Bureau of Criminal Identification and Investigation (BCII), Beachwood Police Department, Cleveland Heights Police Department, Pepper Pike Police Department, Solon Police Department, Cuyahoga County Recorder, Cuyahoga County Treasurer, and Department of Commerce-Division of Financial Institutions. The director of the Task Force is a Cuyahoga County Sheriff Deputy.