Sentence Handed Down for Mortgage Scam Involving 100 Homes

Brett Depue, 38, Gilbert, Arizona, was sentenced to 262 months in prison for defrauding financial institutions of over $24 million in a Las Vegas, Nevada, mortgage fraud scheme that involved over 100 properties in Las Vegas and Henderson, Nevada.

The defendant is currently in federal custody. Depue was sentenced by U.S. District Judge Roger L. Hunt. Judge Hunt also ordered Depue to serve five years of supervised release and to pay restitution of approximately $1.5 million. Depue was convicted by a jury in March 2012 of conspiracy to commit bank fraud, mail fraud, and wire fraud, seven counts of wire fraud, and criminal forfeiture.

As previously reported by Mortgage Fraud Blog, during 2005 to 2007, Depue operated a number of Nevada businesses in Las Vegas, including, ABS Investments Group, LLC, and Liberty Group Investments, LLC. From about February 1, 2005, to May 31, 2007, Depue participated in a conspiracy with about 13 others to defraud federally insured banks. The conspiracy consisted of recruiting straw buyers, typically friends or family members with good credit, to purchase homes that they had no intent to occupy and which Depue would control. Depue paid the straw buyers about $5,000 to put houses in their name, sometimes up to five houses. Depue then directed co-conspirators to prepare mortgage applications containing false and fraudulent information, so that the straw buyers could qualify for the loans.

During the beginning of the scheme, Depue orchestrated simple straw buyer transactions in which the straw buyers purchased properties using 100 percent financing. The properties were purchased at a price above the asking price, and the difference was disbursed at closing to one of defendant’s entities. Later, Depue began using “double escrows” in which a buyer purchased a property and soon thereafter resold it to a straw buyer at an inflated price, often on the same day.

Using this scheme, Depue and his co-conspirators obtained mortgage loans for 110 homes in Las Vegas and Henderson between April 2005 and April 2007. It is estimated that financial institutions lost more $24 million as a result of Depue‘s fraud.

Ten co-conspirators were also convicted for their roles in the offense.

Daniel G. Bogden, United States Attorney for the District of Nevada, announced the sentence.

The investigation was conducted by the FBI. The case was prosecuted by Assistant United States Attorneys Brian Pugh and Sarah E. Griswold.

This law enforcement action is sponsored by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

“Since the inception of our mortgage fraud program in the spring of 2008, we have charged over 200 persons with mortgage fraud crimes,” said U.S. Attorney Bogden. “Most of them have been convicted, and the rest are pending trial. We are continuing to work with our federal, state and local law enforcement partners to investigate and bring to justice the persons who are taking advantage of the housing crisis in Nevada to defraud financial institutions, distressed homeowners, and homebuyers.”