An assembled team of investigators in Montgomery County, Ohio that includes agents from the FBI, the IRS, the Ohio Attorney General's office, federal postal inspectors and others are fighting activities relating to mortgage fraud and property flipping, according to a report in the Dayton Daily News
, reported at daytondailynews.com
One conviction that's resulted from their efforts, where the alleged scammer opted for a guilty plea agreement with prosecutors in lieu of going to trial, related to allegations of involvement in 148 fraudulent loans
In a pending case involving more than double the number of properties
, four members of an alleged mortgage flipping ring are under indictment for their participation in an operation that, according to allegations, recruited many of the buyers from the Pittsburgh area, and promised:
- 100 percent financed loans,
- cash payments once the loan was closed,
- that the properties would be fixed up,
- that the properties would be fully rented before any mortgage payments were due, and
- that the properties would generate a minimum of $100 a month in positive cash flow.
In addition, according to the indictment, the deals involved:
- homes described as "low income, dilapidated and otherwise depressed,"
- obtaining phony, inflated appraisals on these properties,
- a group member acting either as a loan officer or title agent in the deals to falsify loan documents and handle loan payments,
- a specific group member ending up with the bulk of the cash from the sale of the "flipped" homes, from which distributions were made to his "teammates" once all the dust settled.
In addition to these four members of the fraud ring currently under prosecution, three other members, who are named but not charged in the indictment, already pleaded guilty to related federal charges when the current charges were filed in September 2005 (presumably, they opted to "sing to the Feds" in exchange for possible leniency).
The trial in this case is set to start Tuesday in Federal Court before Judge Walter Rice.
In expressing the vigor in which the mortgage fraud task force is approaching their investigations in Montgomery County, a local police detective who helped organize the task force said of them,
- "I would not want to be making a living in criminal activities and be the focus of their investigation [...] Trust me. It may not be tomorrow, it may be next month or next year, but your day in court or prison is their passion."
For the entire story, see House Flipping Shell Game Special Report in the Dayton Daily News.
See also Mortgage scams built on promises leave nightmares in wake regarding the Federal case slated to start on Tuesday.
(Both articles contain a "Click-2-Listen" audio feature.)
Labels: mortgage fraud flipping