NYC Feds Indict Six In Alleged Foreclosure Rescue / Equity Stripping Scam Operation

In New York City, Reuters reports:

• Six people were charged with fraudulently obtaining titles to scores of homes and taking out bad bank loans against them worth more than $20 million as part of a home foreclosure "rescue" scheme, according to a federal indictment unsealed in New York on Tuesday. [...] The defendants were accused of inducing people in danger of losing homes to deed the homes to third parties whose good credit would be used to take out new, larger mortgages or home equity loans to pay off previous mortgages and prevent default or foreclosure.

• Homeowners were allegedly told that the third party buyers, called "straw buyers", would hold the titles to the homes for a year, pay off the original mortgages and make payments on the new mortgages while the homeowners cleaned up their credit. Instead, the indictment said, the defendants kept excess cash after paying off the original loans.

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• Five of the defendants -- Maurice McDowall, Andrea Moore, Kerri Clarke, Marina Dubin, and Michael Irving -- were connected to two so-called foreclosure rescue specialist companies called Lost and Found Recovery LLC and Homes R Us USA LLC. The sixth, Alexsander Lipkin, was a mortgage broker for AGA Capital NY Inc. Lost and Found and Homes R Us reaped more than $1.4 million on the loans, the indictment said.

For more, see Six indicted in "foreclosure rescue" in New York.

For other reports, see:

• Gang of foreclosure rescue 'angels' indicted in multimillion-dollar scam (New York Daily News),
• FBI Press Release.

To view the criminal charges and the specifics of the alleged scheme, see Indictment - U.S. vs. McDowall, et al.

For prior post on Maurice McDowall, see NYC Foreclosure Rescue Scammer Target Of Lawsuits; Can't Be Found, FBI Investigating.

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For June 6, 2008 story update, see:

• New York Daily News: Two found guilty in mortgage scam and face 30 years in prison,
• The Associated Press: 2 plead guilty in NY mortgage frauds targeting homeowners.
• North Country Gazette: Two Guilty Of Home Foreclosure Rescue Scheme.

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.).