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Archives February 12, 2006


Fraud Stories From
Patrick Crowley

Fraud Wire

Full Service Fraud Forms
An accountant has been charged with running what prosecutors have described as a clearinghouse for fake documents -- including phony pay stubs -- used to obtain mortgages, loans and federal assistance.

Abrar Haque, 44, of Berea, a Cleveland suburb, was selling the bogus documents for $75 to $300, according to the U.S. Attorney's office in Cleveland. He has been charged along with 15 others in a 79-count federal indictment. The charges against Haque include racketeering, wire fraud, bank fraud, money laundering, health care fraud and conspiracy.

Also charged were Haque's wife, Nuzaira Haque, and two of his business partners, Mohammed Shahabuddin and Omar Abedrabbo. Ten employees, former employees and clients of Haque's accounting firm were also charged with offenses that include wire fraud, mail fraud, false statements and aiding and abetting immigration fraud.

In addition to running an accounting business, Haque is also one of the founders of a Cleveland area mosque and Islamic school. The charges against him include allowing school employees to avoid paying taxes by not withholding taxes from their salaries.

read the rest of Patrick's story at MortgageDaily.com
(subscription required)

Fake Paystubs Online
A Florida Internet company has allegedly offered online services for mortgage loan applicants that needed fake paystubs.

NoveltyPayCheckStubs.com, operating out of Tampa, has boasted that for $89.95 it can make "authentic looking (paycheck) stubs" that "will definitely fool anybody."

But a legitimate payroll company has gone to court with a trademark infringement lawsuit against the now-defunct Web site.

And The Florida Attorney General has launched a civil investigation of the company.

read all of Patrick's story at MortgageDaily.com
(subscription required)

February 10, 2006

Prison, Home Confinement for Convicted Flippers
Jonathan Bornstein and David Willer were sentenced for grand theft in a classic flipping scheme.
read story from Broker Universe .

Government Issued Fake IDs
Kimberly Murray was the second former Michigan Secretary of State employee to admit to issuing fraudulent driver's licenses and identification documents for $300 each.
read story from The Detroit News .

Mortgage Brokers Discuss Fraud
The practice of taking advantage of soaring home prices and flipping the properties could amount to mortgage fraud if the borrowers disguised their income source on loan applications.
read story from The Washington Times .

February 9, 2006

How to Prevent Being Flip Victim
Purchases of homes involved in flipping schemes can be avoided by dealing with known people in the purchase process and researching comparable properties for value.
read story from the Hattiesburg American .

25+ Have Plead Guilty in Cincinnati Case
David Lockwood, operator of Lockwood Real Estate, plead guilty in a $50 million mortgage fraud case that has already yielded guilty pleas from around 25 people.
read story from The Enquirer .

Pocono Victim Lawsuit May Proceed
A judge ruled Eagle Valley Homes, two appraisers and several lenders allegedly violated the Racketeering Influenced and Corrupt Organizations Act -- enabling a civil lawsuit to proceed.
read story from the Pocono Record .

read complete Pocono saga
(subscription required)

Lenders Deceived Hispanics
Five mortgage lenders have settled with the state of Florida over charges of deceptive and misleading advertising in Spanish-language newspapers.

Mortgage Fraud Makes Florida's Top 10 List
Financial, banking and lending fraud were No. 4 on a list of top categories of fraud complaints received by Florida's attorney general's office in 2005.
read story at Insurance Journal .

February 8, 2006

Met Exec Copping a Plea
Thomas Turner, the former No. 2 executive at failed Metropolitan Mortgage & Securities Co., is negotiating with federal prosecutors on a plea deal in what might be the first conviction in the $450 million fraud scheme that resulted in the collapse of the company.
read Associated Press story .

Criminal Charges Filed in Massive Northwest Fraud Case
(subscription required)

Seniors Among Losers in $50 Million Mortgage Company Fraud
Among the investors stung by the revelation of massive fraud at Brasota Mortgage Co. were retired people who depended on that income.
read story from the Bradenton Herald .

Brasota's bankruptcy trustee discloses higher debt
(subscription required)

what the Brasota owner's widow found led her to send the company into receivership (subscription required)

Flipper Indicted
Malcolm Clark, who reportedly worked for Lucas Development and Investment Co. -- also under investigation, was indicted for allegedly participating in a morgage flipping scheme.
read story from NEWS CHANNEL 3 WREG-TV .

Fake Mortgage Broker Steals Edlerly Couple's Home
Mohammed Taqi Akbari is accused of pretending to be a mortgage broker in a refinance transaction that cost Carlyle and Johnnie Drew their home.
read story from NEWS10 KXTV .

REALTORS Report Fraud
The Minnesota Association of Realtors said it mailed state regulators documentation of four fraudulent mortgage deals.
read story from the St. Paul Pioneer Press .

Executive's Ascension Forged by Fraud
Cheryl Swain, a former executive at now-defunct MCA Financial Corp., was sentenced to two years in prison for her role in the fraud that led to the quarter-billion dollar collapse of the Michigan lender.
read story from The Detroit News .

Cheryl Swain pleads guilty
(subscription required)

senior executives of MCA charged with felony fraud
(subscription required)

February 7, 2006

Mobile Home Dealer Indicted for Mortgage Fraud
Donald W. Gupton, owner of a North Carolina mobile home sales lot, and his employee Richard Meador were indicted for allegedly submitting bogus 1003 loan applications on 150 HUD-backed deals for $11 million.
read The Associated Press story .

Ohio Republicans Seek Tighter Mortgage Regulation
An Ohio bill would place mortgage brokers and some mortgage bankers under the state's Consumer Sales Practices Act -- which would enable borrowers to sue bad mortgage companies and give the attorney general more power to pursue them.
read story from The Columbus Dispatch .

February 6, 2006

Mortgage Fraud Makes Top 10 List
Mortgage and escrow company fraud made Colorado's top ten fraud list announced by the attorney general.
read story from the Denver Post .

15 Years for Debt Reduction Scammer
Andrew Capoccia, former owner of Law Centers for Consumer Protection in Bennington, was sentenced to more than 15 years in prison Friday for bilking thousands of debt-reduction clients out millions of dollars.
read story from the Southern Vermont Bureau .

Couple Sued for Foreclosure Scam
HomeSmartz Mortgage owners Doug and Stephanie Heck have been sued by Missouri's attorney general who wants to shut them down for alleggedly preying on a borrower in foreclosure with the intention of stealing the home.
read story from Kansas City info Zine .

Banks Widening Fraud Analysis
Banks are going after "Phishers" and other Internet fraud artists this year by adding analysis of whether users are at home or abroad, whether they are logging in at an unusual time of day or from using an unusual Internet connection.
read story from the Associated Press .

Patrick Crowley is fraud journalist for MortgageDaily.com and a reporter and columnist for The Cincinnati Enquirer.

Email Patrick at: PatCrowley@FraudBlogger.com
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