C. Fla. Feds Charge Investment Group Operator In Alleged Mortgage Scam; Accused Of Controlling Both Sides Of Sale Transactions While Fleecing Lenders

In Tampa, Florida, The Tampa Tribune reports:

• Joseph F. Daniele, the man behind a peculiar real estate investment group that enabled his companies to collect large sums of money on at least 400 deals, was arrested Monday and accused of mortgage fraud. The arrest follows a two-year state and federal investigation into a pattern of property transactions first outlined in a Tampa Tribune investigative report in 2007.

***

• The Tribune's story detailed homes that were purchased by 65 buyers, many of whom complained to police that they bought the properties at inflated values and borrowed tens of thousands more than the sales price. The buyers said they were pitched to join an investment group they thought could help them get rich quick from Florida's housing boom. The plan was to buy distressed property in low-income neighborhoods, fix up the homes, rent them and sell them later for a profit.

• The best part of the pitch: zero down to purchase. Buyers bought homes dozens at a time, sometimes the same day. Most of the homes were in South St. Petersburg, and more than 75 percent of them ended up in foreclosure, the Tribune reported last year.

***

• The government complaint says Daniele's companies were controlling both transaction parties, the buyers and the sellers, even though lenders didn't know this. Deals were often made between individuals in the investment group. Buyers also told the Tribune they routinely signed blank documents, sometimes late at night in empty parking lots.

For more, see Investor accused of wire fraud in St. Pete deals.