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Feds charge 20 south florida residents with mortgage fraud

October 21, 2011

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Federal authorities charged 20 individuals with mortgage fraud with losses alleged at $20 million. Of those indicted, many are professionals in the real estate industry. According to the indictment, the alleged fraud occurred between March 2006 and June 2008 when the defendants filed false loan applications and other documents to multiple banks to obtain $40 million in bank loans and lines of credit. The banks and lending institutions lost approximately $20 million as a result of the fraud. While the problem of mortgage fraud has been largely curtailed due to stricter banking policies, Miami criminal defense lawyers are still seeing indictments coming down the pike. Mortgage fraud investigations take months if not years, as well as, the subsequent arrests. This leads us to believe that more indictments will follow.

The 25 count indictment includes real estate professional such as mortgage brokers, title agents, realtors, and real estate property appraisers. The defendants are charged with federal crimes such as bank fraud, receiving gifts for procuring loans and providing gifts for procuring loans. The indictment also seeks the forfeiture of money and property derived from the transactions. The U.S. Attorney for the Southern District of Florida issued a statement saying that he had never seen an indictment involving so many real estate professionals. He claimed that his office will continue to vigorously stamp out mortgage fraud and prosecute straw buyers, sellers, corrupt mortgage brokers and bank officials. If the defendants are convicted they face up to 30 years in prison on each count and substantial monetary fines.

As in most mortgage fraud cases, some of the defendants submitted false mortgage and line of equity applications on behalf of unqualified real estate buyers and borrowers. Bank employees assisted in getting the fraudulent loans approved. To cover up the scheme, other defendants failed to record or falsely recorded mortgage deeds and documentation. To secure the loans many of the straw buyers claimed to be doctors, dentists, engineers or other high paid professionals. The investigation into this large scale mortgage fraud scheme was conducted by the Financial Fraud Enforcement Task Force. The task force was solely created to investigate and prosecute large scale organized scheme to defraud.

Mortgage fraud, although considered to be under control by the federal government, still subjects defendants charged with crime to serious terms of incarceration. The crime of bank fraud itself does not subject defendants to lengthy prison sentences, but the large amounts of losses suffered by the lending institution is what puts defendant behind bars for several years. In cases with numerous defendants, it is inevitable that some of the defendants will testify against others listed in the indictment. Cooperation with the federal government can allow for defendants facing lengthy periods of incarceration with significantly less time. The amount of the departure from the sentencing guidelines will depend on the quality and quantity of cooperation provided by the defendant turned government witness.

20 South Florida Residents Charged in $40 Million Mortgage Fraud Crime,, September 30, 2011.
Categories: Fraud
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