Miami Feds Charge 31 In Alleged Cash Back, Straw Buyer Mortgage Scam

From the office of the U.S. Attorney - Southern District of Florida:

• R. Alexander Acosta, United States Attorney for the Southern District of Florida, [and officials from other government agencies involved in the investigation] announced today charges against 31 defendants in the most recent multi-million dollar mortgage fraud scheme in South Florida.

The indictment charges lead defendants Juan Torrens, Rachael Torrens, Daniel Ramos, Alfonso A. Muxo, and Katherine Harris with conspiracy to commit wire fraud and/or wire fraud for their participation in a massive mortgage fraud scheme. This scheme allegedly involved fraudulent mortgage loans obtained for the purchase of 28 properties located in Miami-Dade and Broward Counties, and in the City of Marco Island. According to the indictment, the five were part of a conspiracy that operated to:

1. identify sellers of residential properties who were willing to overstate the true selling price of their properties,
2. recruit and pay straw buyers to pose as buyers and ostensibly participate in the purchase of the selected properties,
3. prepare and cause to be prepared on behalf of straw buyers fraudulent mortgage loan applications (which included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2); said applications were then signed by the straw buyers,
4. prepare, for a fee, fraudulent appraisals to support the overstated sales prices on the properties,
5. create and submit phony closing statements to the lending institutions financing the transactions,
6. pocket the cash for the difference between the inflated price and the actual selling price of the property, and
7. attempted to make the payments on the fraudulently-acquired mortgage loans while they tried to turn around and unload the newly-acquired properties. Some of the lenders ultimately got stiffed on their payments and their mortgages went into foreclosure, leaving them holding the bag.

In addition to the above five defendants, 25 straw buyers were also indicted for wire fraud on account of their participation in the transactions. One bank employee from Regions Bank was also named as a defendant in the indictment.

For more, see the U.S. Attorney Press Release - Federal-State Mortgage Fraud Initiative Charges 31 Defendants In Multi-Million Dollar Mortgage Fraud Scheme.

See also, 31 Accused in Florida of Falsifying Home Loans (The New York Times).

Go here to watch the U.S. Attorney announcement (Associated Press video at MiamiHerald.com).

For a copy of the indictment, see United States of America vs. Torrens, et al.