NYC Feds Describe Short Sale Flipping Deals, Sale Leaseback Foreclosure Rescue Arrangements In Recent Indictment Of Ten Suspects

In New York City, the Office of the U.S. Attorney recently announced criminal charges against 41 suspects in eight separate cases involving a variety of mortgage and real estate fraud. One case is described as follows:

• According to the Superseding Indictment, the defendants identified distressed properties that could be purchased at a low price, usually by targeting homeowners who had fallen behind on their mortgage payments and whose homes were facing foreclosure. In most instances, the defendants induced the homeowners to sell their homes to companies controlled by the defendants, including NNI, LLC, which was controlled by LAVETTE M. BILLS, and Recani Inc., which was controlled by WAYNE GREEN.

• These companies usually purchased the properties via "short sales," in which the lenders agreed to sell the properties for less than the balance owed on the loans and to discharge the remainder of the loans. The defendants then resold or "flipped" the properties to third party straw buyers at a higher price, usually on the same day.

• In other instances, the defendants tricked the homeowners into deeding or selling their homes to other persons, by falsely promising the homeowners that title would be returned to them at a later date or telling the homeowners that they were merely refinancing their homes.

For the criminal charges in this case, see Indictment - U.S. v. Bills, et al.(1)

For the U.S Attorney press release, see Manhattan U.S. Attorney Charges 41 Defendants In Coordinated Mortgage Fraud Takedown Across New York State (pages 4-5).

(1) The ten indicted suspects are: Lavette M. Bills, Kirk Lacey, Wayne Green Sherese W. Glenn, Revlon Hinds, Joseph Evans, Jerry Calonge, Mark Barnett, Omar Henry, and Peter Chevere.