Louisiana Feds Get Indictment of Mortgage Company Owner In Alleged Straw Buyer, Flipping Scam

In Louisiana, The Times-Picayune reports:

• "Michael O'Keefe Jr., son of disgraced former state Sen. President Michael O'Keefe and owner of Citywide Mortgage Co., defrauded the federal government into guaranteeing nearly $600,000 in Citywide loans to unqualified borrowers involved in a "house-flipping" scam, according to a federal grand jury indictment unsealed Monday. [...] O'Keefe Jr. is the seventh person charged in the ongoing "house-flipping" investigation. Five of the seven have pleaded guilty, including three who admitted they were recruited by real estate investor Calvin Davis to seek the HUD-backed loans to help him unload blighted property between Feb. 1, 2001, and January 2003."

According to the details set forth in the indictment, the typical earmarks of a "flipping" scam were present here: use of straw buyers, inflated appraisals, false information on fraudulent loan applications, and phony tax returns. Among some of the other participants allegedly involved:

• Appraiser Donald White who, according to the Feds, took payments for inflating home values in his appraisals. White, who is cooperating with the government, has yet to be charged (and maybe earning a Federal "get-out-of-jail-free" card???),
• Citywide Mortgage underwriter Michelle Cochrane, an unindicted co-conspirator who, according to the government, acknowledged that she signed off on the stack of bogus paperwork in numerous cases in exchange for between $70,000 and $120,000 from investor Calvin Davis,
• Tax preparer Robert Green, who helped buyers in (and has pleaded guilty to) preparing false tax returns,
• Real estate investor Calvin Davis, an unindicted co-conspirator and has not been charged in the scam, and around whom the entire scam seems to revlove, according to the O'Keefe indictment.

For more, see Loan firm's owner accused of fraud (Ex-senator's son faces 5 fed counts).

For the actual Federal grand jury charges, see Indictment - USA vs. O'Keefe, Jr.

For an earlier report on this story, see House flipping scam nets plea (N.O. man will be sentenced in July).