Beverly Hills Flipper Cops Plea In Alleged Mortgage Scam Involving $137M In Fraudulently Obtained Lehman Loans

In Southern California, The Associated Press reports:

• A real estate developer pleaded guilty Friday to a mortgage fraud scheme that involved buying houses in some of Southern California's most ritzy neighborhoods and selling them to fake buyers at inflated prices. Charles Elliott Fitzgerald, 47, pleaded guilty to conspiracy to commit bank fraud and loan fraud, running a continuing financial crimes enterprise, money laundering, obstruction of justice and three counts of bank fraud.

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• Fitzgerald and his business partner, Mark Alan Abrams, bought homes in neighborhoods like Beverly Hills, Bel Air, Malibu, La Jolla and Carmel, and then used fraudulent appraisal information to resell them for inflated amounts to fake buyers who purchased the properties with loans, prosecutors said. Fitzgerald and Abrams recruited the borrowers, repeatedly lied about the homes' value and ran escrow companies to promote the scheme, said Assistant U.S. Attorney Jeremy Matz.

• Over three years, Lehman Brothers Bank funded 80 loans worth $137 million—$50 million more than what was actually needed to pay for the homes, Matz said. Fitzgerald and Abrams reaped millions of dollars from the inflated loans and passed kickbacks on to their associates through commissions, prosecutors said.

For the story, see SoCal developer pleads guilty to mortgage fraud scheme.

For earlier stories on Fitzgerald, see:

• Forbes: Real Estate Rip-Off (How Lehman Brothers was swindled out of $50 million).
• Los Angeles Times: How a bank fell victim to loan fraud (Officials allege a scam used phony appraisals and paperwork to wring millions from deals in the Beverly Hills area),
• FBI Press Release: Samoa Deports Fugitive Wanted In United States In $50 Million Real Estate Mortgage Fraud Scam. babajian