Investor Sentenced for Cash Back Mortgage Scam

Allison Tussey —  April 19, 2012 — Leave a comment

Eitan Maximov, 40, a citizen of Israel and lawful permanent resident of the United States, was sentenced by U.S. District Judge David G. Campbell to nearly eight and half years in federal prison. A jury found Maximov guilty in November, following a six-day jury trial, on one Count of Conspiracy to Commit Wire and Bank Fraud and one count of Wire Fraud, as a result of his leadership role in a 2006-2008 cash back mortgage fraud scheme.

As previously reported by Mortgage Fraud Blog, evidence presented at trial showed that Maximov played a leadership role in the underlying conspiracy, which involved at least nine residential properties in the Scottsdale, Arizona, area.  According to the indictment, the objective of the conspiracy was to recruit unqualified borrowers as straw buyers, submit fraudulent loan applications on their behalf and on behalf of Maximov, obtain mortgage loans in excess of the selling price of the property, and then take the excess amount of the loans out through escrow in what is known as a “cash back” scheme.

Not only did Maximov recruit straw buyers and work with an escrow officer in to carry out the scheme, but he also financially benefitted from their involvement in the scheme. The purchase prices on many of the properties involved in the scheme exceeded a million dollars.

Evidence at trial showed that Maximov had no legitimate employment, income, or assets to afford the numerous million dollar properties. After a foreclosure on Maximov‘s primary residence, the home was stripped of its assets, further depreciating its value and the value of the homes in close proximity. Evidence at sentencing demonstrated that Maximov returned to purchase his foreclosed property using a false name. His last address before being arrested in 2008 was a luxury condominium in the Esplanade. All of the homes purchased through the conspiracy have been foreclosed or sold at a loss to the lending institutions.

Three other co-conspirators were also charged and have pleaded guilty for their involvement in the conspiracy. The conspiracy resulted in approximately $5,000,000 in loans obtained by fraud and an actual and intended loss to lending institutions of nearly $6,500,000.

“This is yet another reminder of the damage that mortgage fraud has caused to our community,” said Acting U.S. Attorney Ann Birmingham Scheel. “The mortgage crisis wasn’t just the result of an economic downturn. Its impact was enhanced, and it affected more lives, because criminals fraudulently purchased luxury homes when they didn’t have the financial means to do so. Mr. Maximov committed fraud at the expense of other homeowners and lenders all in the name of greed and in order to live an unsustainable lavish lifestyle.”

“Today’s sentence signifies the continued commitment by the FBI, the Arizona Mortgage Fraud Task Force, and the United States Attorney’s Office, in targeting mortgage fraud,” said James L. Turgal, Jr., FBI Special Agent in Charge, Phoenix Division. “The FBI and its law enforcement partners will continue to aggressively pursue those who are involved in these types of fraudulent schemes.  Mortgage fraud has greatly impacted the citizens of Arizona over the past few years and will continue to remain a top criminal priority of the FBI.”

The investigation in this case was conducted by the Federal Bureau of Investigation.  The prosecution was handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

Allison Tussey

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