Foreclosure Scammer Guilty of Federal Charges

As reported in suntimes.com (Chicago Sun-Times), an Illinois man pleaded guilty to a scam involving the abuse of the bankruptcy court system as part of a scheme to delay the foreclosures of homes belonging to financially strapped residents. The scam reportedly victimized thirty local homeowners to the tune of approximately $200,000.

As part of the plan to "help" the homeowners and in conjunction with bankruptcy filings, the culprit succeeded at having the homeowners direct their mortgage payments to him. The victims still ended up losing their homes.

This is an example of "equity skimming" that invloves the use of the "automatic stay" provision of the Federal Bankruptcy law to delay the ultimate foreclosure sale of a victim's home. The longer the scammer can delay the foreclosure sale, the longer he can continue collecting the monthly payments from the homeowners/victims, payments that the victims have been duped into believing are being remitted to the proper officials involved in the bankruptcy proceeding.