Man Sentenced For Straw Buyer Scheme

admin —  February 26, 2010 — 1 Comment

Michael Hicks, 41, Quincy, Massachusetts, was sentenced in federal court for a mortgage fraud scheme in which he recruited straw buyers to purchase two properties in Dorchester, Massachusetts which ultimately went into foreclosure, causing a loss to the lenders of more than $1 million.

Hicks was sentenced to 42 months’ imprisonment to be followed by 3 years of supervised release. An order of restitution was deferred for up to 90 days because one unit of the foreclosed properties is scheduled to be sold at auction in March. Hicks pled guilty to one count of wire fraud and one count of money laundering on November 24, 2009.

At the earlier change of plea hearing and according to court documents, the prosecutor told the Court that had the case proceeded to trial, the evidence would have established that in August 2007, Michael Lee purchased a three-family dwelling at 162 Quincy StreetDorchester, Massachusetts, for $400,000. He immediately converted the dwelling to three condominiums, which allowed Lee to sell the units individually. At Lee’s request, Hicks, through a Pennsylvania associate, recruited a “straw buyer” to purchase all three units. The straw buyer provided his identifying information to the Pennsylvania associate who forwarded it to HicksHicks used this information, such as his name, address, date of birth and Social Security number, to apply for mortgages for the purchase of the three units at 162 Quincy Street. In the loan applications, Hicks falsely represented that the straw buyer intended to make each unit his primary residence, that he was self-employed as a contractor, and that he had an annual income ranging, in the various applications, from $156,241 to more than $379,152, all in an effort to secure mortgages for $370,000 for each of the three units. Hicks also created a fictitious business for the straw buyer, falsely verified the straw buyer’s employment status for the mortgage applications and arranged for false income tax returns to be submitted with the applications.

Hicks also arranged for a straw buyer for another multi-family dwelling at 3-5 Sexton Court in Dorchester, Massachusetts which was owned by Lee’s in-laws. For recruiting both buyers, Lee paid Hicks a total of $180,500 a sum which Hicks turned over to the United States prior to sentencing and which the Court ordered Hicks to forfeit.

Michael Lee also is under Indictment, charged with five counts of wire fraud, in connection with the scheme. His case is pending.

United States Attorney Carmen M. Ortiz, Steven Ricciardi, Special Agent in Charge of the U.S. Secret Service and Susan Dukes, Special Agent in Charge of the Internal Revenue Service – Criminal Investigations, Boston Field Office made the announcement.

The case was investigated by the United States Secret Service and the Internal Revenue Service. It was prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.

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One response to Man Sentenced For Straw Buyer Scheme

  1. Never need a loan for home again, stop predatory lenders, YES WE CAN!!!
    How you might ask? Tonight I finally got it, we are living the nightmare of predatory lending, and understanding that these mortgage lenders bought our mortgage for penny’s on the dollar, and are cooking the books in hopes we all end up in foreclosure, so they can make even more money! I’ve found the answer in how to stop it dead in its tracks… Forget short sells, forget foreclosures effecting the values of homes in the neighborhood… You want out from under your mortgage that was based in fraud? You need to sell yet, cant get what you need to pay off the loan?
    Sell your home via a lottery or a essay contest… Here’s why it will work, you get out from under your debit, yes the banks still get there pay off, however, then it stops there, because the next person is not having to get a loan for the mortgage, thus stopping the cycle dead in its tracks. I win, you win, and they are DONE! Let Freedom Ring..

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