Scammers Prosecuted In Mortgage Fraud Scheme Involving 24 Homes, Despite Fact Property Values Increased & Defrauded Lender Ended Up Paid In Full

In Covington, Kentucky, the Cincinnati Enquirer reports:

• A 54-year-old Middletown man was sentenced Monday for his involvement in a scheme to defraud Countrywide Financial. Gregg Russell was sentenced to three years probation. U.S. District Judge Danny Reeves also ordered Russell to spend three months of his probation in a halfway house and pay a $5,000 fine.

• He had previously pleaded guilty to one count of conspiracy to commit wire fraud. The scheme involved the sale of 24 rental units four years ago in Kettering, Ohio. Russell loaned the down payment money to the buyers, Georgia Bowling and her son William Bowling Jr., without disclosing that to Countrywide.

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• Assistant U.S. Attorney Ben Dusing said what made the case unusual is that the rental units appreciated in value. He said the buyers were able to resell all 24 properties for an amount in excess of the inflated loan amount and that Countrywide got paid back in full. “We are pleased that there were no losses incurred by Countywide, as the ultimate foreclosure sale resulted in payment in full,” Rubenstein said. Dusing compared the fraud to a teller stealing money from the bank, betting on a horse at the track, having the horse come in first and applying the winnings back to the bank. “No one lost money, but it is still fraud,” he said.

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• The Bowlings will be sentenced on Oct. 27 to charges of conspiracy to commit wire fraud.

For the story, see Man gets probation for fraud.

See also, Middletown Journal: Local Realtor gets fine, probation in mortgage fraud scheme (Judge says Gregg Russell played 'minor' part).