Tuesday, March 28, 2017

Three Salt Lake Real Estate Operators Get Pinched For Roles In Alleged Fraud Involving Short Sale Deals; Prosecutor: Trio Used Affiliated Entities To Control Both Sides Of Transaction, Violating 'Arm's Length' Requirements Between Unrelated Parties

In Salt Lake City, Utah, the Deseret News reports:
  • Three people were charged Tuesday[March 21] in an alleged fraudulent real estate scheme in Salt Lake County.

    Jason Hawkins, 44, Trevor Mecham, 43, and Debbie Pimm, 55, are each charged in 3rd District Court with carrying out a pattern of unlawful activity and five counts of communications fraud, all second-degree felonies.

    Court documents allege all three were involved in a scheme to defraud multiple financial institutions from 2010 to 2015 in connection with South Jordan-based Busy Bee Realty.

    Court documents say the defendants charged banks for a series of fabricated real estate fees, disguised as closing costs, attorneys fees, commissions and transfer fees, and then derived unlawful personal gain from those falsified costs.

    The charges state the Federal Housing Administration lost more than $300,000 in transactions for three properties. The mortgage insurer, Freddie Mac, also lost about $164,000 insuring the transactions for two properties, according to prosecutors. Mortgage association Fannie Mae was allegedly also defrauded out of more than $15,000.

    Charging documents also allege that as the defendants bought and sold property under a number of different business entities, they violated regulations for the "short sale" of real estate and did not comply with "arm's-length" transaction provisions which require that dealings be conducted between independent, unaffiliated businesses.

    Though the allegations center around the dealings of Busy Bee Realty, which Hawkins owned and operated, the charges claim the deceptive practices in question would also occur under the name of Advanced Financial Services or Ehmann Realty.

    The charges allege the defendants colluded by using the entities to improperly function as both sides of a transaction.

    These allegations of malpractice have been associated with the sale of properties in Sandy, South Jordan, West Jordan and West Valley City.

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