Mortgage Fraud Racket Used 3rd Party Payouts, "Double Escrows" In Straw Buyer, Flipping Scam, Say Las Vegas Feds

From the Office of the U.S. Attorney (Las Vegas, Nevada):

• Brett Depue, 36, a former resident of Las Vegas, but currently a resident of Gilbert, Arizona, Brian Barney, 36, of Fairfield, California, and Maria Ornelas, 32, of Las Vegas, are charged with conspiracy to commit bank fraud, mail fraud, and wire fraud, 11 counts of wire fraud, and criminal forfeiture.

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• The Indictment alleges that from about February 1, 2005, to May 31, 2007, in Nevada and elsewhere, the defendants participated in a mortgage fraud conspiracy in which they used “third party disbursements”(1) and “double escrow”(2) methods to fraudulently obtain monies from the financial institutions.

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• The defendants recruited home owners in the Las Vegas area and elsewhere who agreed to sell their property at a price substantially above the asking price. The home owners were told that the difference would go to Depue for improvements. The defendants then recruited straw buyers to apply for mortgage loans to purchase the homes using false and fraudulent information concerning the straw buyers’ income, assets, employment, and intent to occupy the homes. In some instances, the defendants had the straw buyers apply for mortgages for more than one house at a time and concealed from the lenders that they were purchasing more than one property. The Indictment specifically discusses 17 homes in Las Vegas and Henderson which were purchased fraudulently between April 2005 and April 2007 at the direction of and for the benefit of the defendants.

For the U.S. Attorney press release, see Federal Mortgage Fraud Charges Filed Against Owner And Employees Of Former Nevada Investment Companies.

(1) A third party disbursement is the issuance of money at the closing of a mortgage loan to a person or entity that is not typically entitled to the money, the press release states.

(2) A double escrow is where two sales of the same property are conducted at the same time, the press release states. Typically, the property is sold to a middleman, who then sells the property to a straw buyer at a substantially inflated price. The difference between the first sale price and second price is distributed to a conspirator as seller proceeds. The paperwork on the second sale is concealed from the seller, and the paperwork on the first sale is concealed from the lender, according to the press release.