Paul Wagner, 59, Las Vegas, Nevada, a homebuilder has been sentenced to 14 years in prison, five years of supervised release, and ordered to pay $4.4 million in restitution for selling houses at inflated prices in order to fraudulently obtain mortgage loans.
The defendant was sentenced on Monday, July 22, 2013, by U.S. District Judge Miranda M. Du. Wagner was convicted by a jury in October 2012 of one count of conspiracy to commit bank fraud and wire fraud, six counts of bank fraud, and three count of wire fraud.
Wagner was a home builder in Las Vegas for 20 years, building tract homes in the northwest part of the Las Vegas valley. From about 2007 to 2009, Wagner created a scheme to provide large cash incentives to buyers, real estate agents and others to sell his homes. The incentives included Wagner paying buyers’ mortgage payments, making large cash payments to real estate agents and others to find buyers, and paying buyers’ down payments.
To pay the incentives, Wagner inflated the value of the homes by causing appraisers to create false appraisals. Wagner concealed the incentives from the lenders, who would not have made the loans had they known about his methods. Using this fraudulent scheme, Wagner sold about 85 houses from March 2007 to mid-2009. Most of the homes went into foreclosure after Wagner stopped making the mortgage payments. According to the Indictment, the losses to the financial institutions were more than $18 million.
Daniel G. Bogden, United States Attorney for the District of Nevada, announced the sentence.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Daniel R. Schiess.
“Since the inception of our mortgage fraud program in the spring of 2008, over 200 persons have been charged with federal mortgage fraud crimes in Nevada,” said U.S. Attorney Bogden. “Most of those individuals were convicted and are in prison. Wagner is the first home builder to be charged and convicted.”
995 = 99.5 percent.
I love how some people cry out to get those “crooked appraisers”. In 995 of these cases the appraisers wanted no part of fraud and if they gave inflated appraisals it was because they were fed false info or pressured into it. FOLLOW THE MONEY. It is the builders, agents and loan officers who make most of the money in the real estate biz. We are practically monks in this industry. EVERYONE ELSE is paid on a sliding scale based on value and referrals. We appraisers get the same low fee no matter what the house is worth, and referrals don’t exist thanks to random appraisr selection. Imagine a loan officer or RE agent that could NOT get repeat business.
Aaron: read the article. It said that builder concealed the incentives from the lender, which in turn “caused the appraisers to make false appraisals.” Perhaps a better phrase should’ve been “caused the appraisers to make erroneous appraisals.” Appraisers are only as good as the data they have to analyze, and if furnished false data in a market like that, it might’ve been difficult to ferret out the truth.
What happened to the crooked appraisers? Did they get a free pass and get out of jail card as usual?