Pennsylvania Man Cops Federal Plea In House Flipping Operation; Investigation Focusing On About 200 Deals Continues

In Erie, Pennsylvania, the Erie Times-News reports:

• [Robert L.] Dodsworth -- a central figure in [an] ongoing federal mortgage-fraud investigation in Erie -- pleaded guilty in U.S. District Court in Erie on Monday to felony conspiracy and money-laundering charges related to the probe. With the plea, Dodsworth, 60, became the first and, so far, only person to admit wrongdoing in the mortgage-fraud investigation, which the FBI, Internal Revenue Service and other agencies initiated in 2004.

• Dodsworth admitted to working with others to falsify mortgage applications for homebuyers, most of them poor and unsophisticated, who otherwise would have been unable to afford mortgages and buy houses.

• The investigation that included Dodsworth has focused on the sale of nearly 200 Erie homes. The FBI and other agencies have been looking at whether the sales involved inflated appraisals or other fraudulent information that led those buyers to pay far more than market value for their homes. Most of the sales occurred in low-income Erie neighborhoods, and most of the financing was arranged through subprime mortgages ... .

For more, see Guilty as charged (Restitution part of plea in mortgage-fraud case).

For more on this scam, see Money from suburbs helped finance inner-city fraud.

For story update, see Fraud probe figure seeks lawyer (Court appoints public defender for businessman) ("Another local businessman has been connected to the federal criminal probe of suspected mortgage and housing fraud in Erie. Several low-income homebuyers claim the businessman, Keith A. Rice, acted as an ad-hoc real estate agent when they purchased their properties. Rice, 49, last week requested that a federal public defender be appointed to represent him as part of a criminal case in U.S. District Court in Erie.").

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