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Ten people charged in multi-million dollar miami mortgage fraud scheme

February 03, 2010

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Ten Miami-Dade residents were formally charged in a massive Miami mortgage fraud scheme. The defendants are alleged to have defrauded various lenders to the tune of $24 million. The hardest hit bank was Washington Mutual, suffering $7 million in losses as a result of the fraudulent real estate transactions. The ten defendants allegedly worked in concert using a mortgage brokerage company called Miami Dade Mortgage Professionals to perpetuate the fraud. The charges are being brought in federal court in the Southern District of Florida. At least one of the defendants has retained a Miami criminal defense law firm to defend the charges. It is unclear at this early juncture in the criminal process whether the defendants will retain Miami criminal attorneys or seek the assistance from the Federal Public Defender's Office. Criminal investigations continue to target all levels of individuals involved in mortgage fraud. Real estate agents, mortgage brokers, attorneys, title agents and straw buyers have been the subject of many federal criminal investigations.

All of the defendants indicted for mortgage fraud reside in Miami and Hialeah. The federal indictment alleges that Alain Hernandez, a licensed mortgage broker, and his wife, Ricelda Hernandez, a licensed real estate agent, would draft fraudulent mortgage applications and solicited others to act as straw buyers promising hefty returns in exchange for their assistance in committing the fraud. The allegations suggest that Ana Blanco operated Trinity Closing Group to seal the deals. The defendants were indicted on charges including racketeering, money laundering, wire fraud and mail fraud. The Miami mortgage fraud scheme involved six residential properties.

Hernandez allegedly provided fraudulent information on mortgage applications to Washington Mutual, Loan City and other lenders. Papers in the court file allege that Hernandez and his wife recruited straw buyers to consummate the fraudulent real estate deals. The most common incidents of mortgage fraud involve the use of straw buyers who are recruited by unscrupulous mortgage brokers to apply for loans. The straw buyers provide personal information to apply for the fraudulent loans. The straw buyers receive hefty payments from the organizers for participating in the scheme to defraud. The mortgage brokers fill out the mortgage applications using falsified income statements of the straw buyers and submit them to the lending institutions.

In other mortgage fraud cases, falsified applications were used to obtain home loans of home equity lines of credit. This type of fraud is not alleged in this case. Banks are trying to recover some of the losses though the subsequent sale of the properties. However, the current real estate market in South Florida makes it difficult to move the properties. If you or someone you know is being investigated or arrested for mortgage fraud, immediately contact a defense lawyer experienced in defending cases in federal court. Depending on the amount of loss, individuals arrested on these types of charges could be sentenced to multiple years in prison.

Ten Indicted in Multimillion-Dollar Mortgage Fraud Scheme, South Florida Business Journal, February 2, 2010.
Categories: Fraud
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