Feds Investigating Nationwide Foreclosure Rescue Scam

A national foreclosure rescue scam has ensnared hundreds of victims in 27 states, including at least 17 homeowners in New Jersey, according to a story in the Asbury Park Press (Asbury Park, New Jersey). Among the New Jersey victims who unwittingly signed away title to their homes in purported sale leaseback arrangements are two mothers in Ocean County and a widow in Middlesex County. A disabled Vietnam veteran in Delaware also claims to be among the defrauded. According to the story:

• An IRS search warrant obtained by the Press lists 256 affected properties stretching from Maine to Hawaii. The warrant identified 106 homeowners as victims and 99 third-party, or straw, buyers, who may have unwittingly propelled the fraud forward. Two dozen companies are also named, but it is unclear what their roles were in the investigation. An FBI spokesman and an IRS agent last week confirmed the investigation into the companies and people behind what had been touted as a way for small investors to save financially strapped homeowners.

• "It is a large and significant case," FBI spokesman John Cauthen said. "We're investigating with the full force and weight of the FBI." Cauthen said no charges have been filed. Nonetheless, the FBI has sent letters to homeowners and investors to inform them they are victims.

• Those letters identified Charles Head, operator of the now-defunct FundingForeclosure.com, as the focus of the investigation. Head could not be reached for comment. Private attorneys representing the victims said Head, believed to be from Florida, cannot be located.

Reportedly, the FBI letters have been helpful to some in that a couple of the victims have successfully used the letters to convince judges to postpone ongoing foreclosure proceedings. For more, see Victims of scam face losing homes.

For related stories on two of the New Jersey victims, see:

• Defrauded woman fights to stay in house she didn't intend to sell,
• Son aims to buy home.

Go here for an earlier report from Hawaii on the Charles Head FBI investigation.

Go here for other posts on foreclosure rescue operator Charles Head.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).