$29 Million In Bad Loans In Chicago "Straw Buyer" Scam; Ringleader, 3 Appraisers Plea Guilty

Mohammad "Mike" Taghie Kakvand pleaded guilty in Chicago Federal Court Monday to one count of wire fraud in a mortgage fraud scam where units in 33 Chicago apartment buildings were sold off as renovated condominiums at artificially inflated prices using "straw buyers" who ultimately defaulted on $29 million in loans. A sentencing agreement with prosecutors has yet to be worked out. Sentencing is scheduled for May 9.

Bogus appraisals misrepresented the condition of the units as being rehabilitated when, in fact, no renovation had ever taken place. Real estate appraisers Thomas M. Groh, Eric L. Dorsey and Britt J. Pierre, have already pleaded guilty for their roles in the operation.

A fifth individual, Syed Ali Mohammed Razvi, was also charged in the fraud and is currently on the lam.

In addition to mortgage lenders such as Washington Mutual and Wells Fargo, the scheme victimized the community by reportedly

• displacing renters,
• leaving decaying, crime-plagued buildings,
• increasing real estate taxes on surrounding property owners as a result of the artificial inflation of home prices, and
• decreasing the amount of available rental housing.

To read more, see Guilty plea in mortgage scam, reported by the Chicago Sun-Times at suntimes.com.
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