Gang Member Who Led Mortgage Fraud Racket Cops Plea In Scam That Left Lenders Holding The Bag On 100+ Homes, $20M+ In Losses

In San Diego, California, the San Diego Union Tribune reports:

• A San Diego gang member who federal authorities said was the leader of a massive mortgage fraud scam pleaded guilty yesterday to participating in a racketeering conspiracy involving bank fraud, money laundering and other crimes. Darnell Bell, 39, faces a maximum of 20 years in prison. Prosecutors said he was a chief orchestrator of a fraud and kickback scam that used straw buyers, fraudulent loan applications and bogus escrow documents on more than 100 properties in San Diego County. The scheme resulted in real estate losses between $20 million and $50 million. He’s the fourth person, and second principal, to plead guilty under an indictment naming 24 people that was unsealed last year.

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• The ring identified properties that had been languishing on the market for months. Then, using “straw buyers,” ring members used 100 percent borrowed money and paid more than the asking price for the homes. That overage amount was put into an account for a bogus construction company that Bell set up. The money was ostensibly to be used for retrofitting homes for disabled access, but no work was ever done. The “buyers” later walked away from the homes, sending them into foreclosure and sticking the lenders with losses. [...] When the ring was broken up, the bank account Bell set up contained $9 million in proceeds.

For more, see Leader of mortgage scam pleads guilty (Gang member’s scheme caused huge bank losses).

(1) According to the story, Bell, known as “D-Bell,” is a documented member of the Lincoln Park street gang in San Diego. The indictment said he used his status in the gang to recruit other members and enforced discipline among the diverse web of conspirators.They included an appraiser, a notary, an escrow officer, a tax preparer and a real estate broker, the story states.