Alabama Feds' Mortgage Fraud Investigation Focus On Orlando Businessman

The FBI is investigating convicted Florida cocaine dealer Robert B. Guest Jr. for alleged mortgage fraud in and around Montgomery, Alabama involving the purchase and subsequent resale of "100 houses," according to a story in the Montgomery Advertiser. Federal agents have reportedly conducted searches of the offices of Betts Realty and Appraisal Service and real estate brokerage Jerri Baker Real Estate LLC in Montgomery for records of home sales involving Guest. According to the story:

• "Acting through several companies, Guest is suspected of buying 100 homes, mostly in Montgomery, obtaining misleading appraisals and then reselling the rental properties within six months at two or three times the price he paid, according to a sworn statement by FBI agent Christopher P. LaCarter. [...] Each investor was required to put down 20 percent of the purchase price and the rest was financed through the home mortgage unit of Countrywide Financial Corp., a Fortune 500 company. [...] After the home sales closed, according to the FBI affidavit, Guest refunded the down payments to the investors. So Countrywide ended up funding the full price of the homes. Unhappy investors, realizing they cannot resell the homes for anywhere near what they paid, have begun filing lawsuits in Montgomery County Circuit Court. To date, the fraud suits claim economic losses of $1.4 million."

For more, see FBI inquiry involves area home sales.