Ohio Man Sentenced In Mortgage Scam That Left Some Unwitting Straw Buyers In Foreclosure Or Bankruptcy

The Cincinnati, Ohio office of the FBI reports:

• Nicholas St. Nichols, age 54, of Dayton, was sentenced in United States District Court here to one year and one day in federal prison for his role in a mortgage fraud scheme to sell homes at inflated prices to a buyer who believed she was merely selling him her credit. Nichols was also fined $4,000 and ordered to pay restitution to victims.

[...]

• St. Nichols and Todd Armstrong, a 43 year old Bellbrook resident sentenced in July to twelve months and one day imprisonment, were originally indicted for the scheme in July 2005. Eventually, each entered guilty pleas to one count of mail fraud. The victims in both cases included financial institutions that were conned into making loans in excess of the true market value of the homes, along with individual buyers who were scammed into believing they were merely selling their credit for investment purposes rather than actually buying homes or taking out mortgages in their names.

[...]

• Buyers were usually given $1,000 and led to believe they were merely selling their credit when, instead, they were unknowingly purchasing homes and left holding the bag on under-secured loans. Most of the buyers ended up in foreclosure actions ... . Armstrong acted as the mortgage broker in 14 fraudulent sales, according to the plea entered in his case.

For more, see FBI Press Release - Second Man Sentenced In Dayton Area Mortgage Fraud Scheme (Selling Personal Credit to Investment Brokers Results in Fraudulent Home Loans).