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Fraud
Stories
From
Patrick
Crowley

Fraud News Wire

Last Updated Wednesday, March 2, 2007, 04:49 PM Texas Time


Crooked Lawyers

A former Kansas elected official who is in trouble along with her attorney husband for alleged mortgage fraud highlights the latest edition of Lawyers Gone Wild.

Katheryn Shields, 60, the former Jackson County executive and her husband, attorney Philip Cardarella, 59, have been indicted along with nine other people on federal charges of "conspiracy and wire fraud for their role in a scheme to engage in mortgage fraud," according to a statement from U.S. Attorney Bradley Schlozman.

"This case represents another tragic example of intelligent individuals -- including lawyers and prominent elected officials -- thumbing their noses at the law in the pursuit of quick and easy cash," said Schlozman, the U.S. Attorney for the Western District if Missouri in Kansas City.

The couple could not be reached to comment, but they have maintained their innocence in published reports.

MortgageDaily.com subscribers read Patrick's full story




Legislator Accused of Foreclosure Fraud

The Maryland Attorney General is looking into claims that a state legislator duped a woman into selling her home to him.

In a lawsuit filed in Anne Arundel County Circuit Court, Teresa Milligan accuses Maryland State Delegate William "Tony" McConkey, a Republican and a real estate broker, of foreclosure rescue fraud.

McConkey has denied Milligan's claims that he somehow tricked Milligan into singing over her house to him.

Kevin Enright, a spokesman for Maryland Attorney General J. Joseph Curran, confirmed to MortgageDaily.com that the attorney general's office is "looking into the matter."

MortgageDaily.com subscribers read Patrick's full story

March 2, 2007

Program Identifies Common Fraud Techniques
Mortgage fraud, which caused over $1 billion in losses in 2005, is most likely to happen on an application and some of the most popular schemes involve fraudulent flipping.




Flipping Highly Used to Defraud
Mortgage fraud, which caused over $1 billion in losses in 2005, is most likely to happen on an application and some of the most popular schemes involve fraudulent flipping.

read story from Builder Online.




Builder Caught Trying to Inflate Income
With a hidden camera, a loan prospect recorded when Country Constructions owner Brett Bybee was trying to have the prospect lie about income to get approved for a loan even though he previously denied to a news station having any involvement in the loan application process.

read story from KY3 News.




RE Developer: Honest or Deceitful?
After nearly seven weeks of trial with more than 80 witnesses, the future of Phillip Hill, whose charges involve false applications for fraudulent flipping of about 300 homes, remains to be seen, as some argue he knew what he was doing for profits while his attorney states he knew no better and openly conducted business.

read story from the Atlanta Journal-Constitution.




Judge Offers Fraudster a Deal
A judge let Corey M. Hazel, who admitted to bilking out-of-town mortgage lenders out of as much as $2 million by inflating property appraisals on loan applications and pocketing the money, remain free until his sentencing and gave him the chance to earn a six year prison sentence -- rather than 23 years -- by showing up to court the day of his sentencing.

read story from the The Columbus Dispatch.




MO Creates Fraud-Fighting Unit
In support of a Missouri bill that would make mortgage fraud a specific crime -- punishable by up to 15 years in prison, the Department of Insurance, Financial Institutions and Professional Registration has created a special task force to educate consumers and mortgage insiders how to recognize mortgage fraud and hold wrongdoers accountable.

read story from the Belleville News Democrat.




Local Government Warns About Fraud
At a forum, the Madison County Chamber of Commerce and the Council of Governments warned the community about mortgage fraud and how to avoid falling prey by doing things as simple as -- according to former closing attorney Bobby Fisher who himself was involved in a multimillion-dollar mortgage fraud scam -- making sure the facts on the transaction papers match the facts of the documentation.

read story from the Madison County Journal.




February 28, 2007

Tool Combats Flipping, Foreclosure Fraud
RealCheck Database Identifies Potential Fraud and Suspicious 'Flipping' Activity in the Atlanta Area.




Mortgages Pitched for Investment Scheme
Trial has begun and is expected to end in late March for Leonard Bogdan Jr. and his ex-business partner John Brant who are accused of carrying out a Ponzi scheme through which Bodgan Financial Group lured investors into putting money for what were supposed to be secured first mortgages -- one $40,000 property had investments from six investors that amounted up to $300,000.

read story from the Palm Beach Post.




Foreclosure Growth Prompts Rental Scams
Renters, like borrowers, can fall prey to foreclosure through fraud, as some have faced eviction because the owner did not use the rent money to pay the mortgage, and some have found the owners have done away with their security deposit, and first month's and last month's rent prior to foreclosure.

read story from Las Vegas Now.




Avoiding Refinance Scams
Loan prospects should do homework prior to taking on a mortgage and thoroughly read documents to avoid falling victims to predatory loans, as did a woman who holds a loan for an amount $13,000 more than the home is worth due in part to the broker arranging for $6,400 to be used for payment of all sorts of fees.

read story from Cincinnati.Com.




Mortgage Exec Gets 2 Years
Troy S. Clements, ex-operator of American Funding, received a 24-month sentence to prison after admitting he took part in defrauding mortgage lenders out of $2.3 million by arranging refinance transactions that used false appraisals before the original loans on properties had cleared.

read story from the Enquirer.




Borrowers Victimized by Forged Signatures
Four of six people, including Lesley Romero, have been sentenced for a scam in which borrowers' signatures were forged to quickly transfer title of the home to the scammers who would then pocket money from enormous mortgages placed on the properties -- causing borrowers to eventually face foreclosure.

read story from The Arizona Republic.




2 Settle Deceptive Business Claims
Residential Mortgage Services of South Portland and Salem Capital Group have agreed to refinance more than $400,000 in mortgages and pay restitution to settle charges by Maine regulators that Salem operated without a mortgage lending license and that a Residential loan officer falsely promised borrowers they would be able to refinance short-term cash loans that were used to qualify borrowers for mortgages.

read story from WCSH 6.




Slow MBS Market Highlights Fraud
At a time when foreclosures and delinquencies already rising, secondary market investors are worried about how much deeper fraud is penetrated in mortgage-backed securities, as the current environment of stagnating prices and sales will bring to surface fraud that's been hiding in loans during the good times.

read story from Bank Technology News.




Company Probed for RE Scam
Officials are investigating Chuck Gunter and Bruce Sarafian, who both ran Livewire Properties Inc., after several complaints accused the company of misusing investors' credit to obtain home loans on overvalued properties that were supposed to be rent-to-own properties and are now in foreclosure.

read story from Local 6.




LO Indicted for FHA Fraud
Charges against James L. Boyle allege the former loan officer at RBC Mortgage Co. and Irwin Mortgage allege he caused numerous false verifications of employment forms and fictitious pay stubs to get borrowers qualified for a federally-insured mortgage.

read story from the Rockford Register Star.




February 27, 2007

Lawyer Dishes on Mortgage Fraud
Attorney Andy Hodges explained that some of his clients were duped into making investments on mortgages in which straw buyers' information was used to obtain loans for high-end homes in which the value was inflated by more than $50,000.

read story from the Springfield Business Journal.




Ex-mortgage Exec's Bail Request Denied
Ronald Sheppard, who led HomeGold Financial which was involved in one of largest bankruptcies in South Carolina, will remain in jail through the appeal process of his sentencing earlier this month to 20 years in prison for his role in defrauding investors.

read story from Fox 21.




OH Expands Predatory Lending Focus
Following a new mortgage lending law in Ohio, the state's attorney general's office was granted a $500,000 request to launch a task force that will add three attorneys and three investigators who will solely concentrate on cracking down unscrupulous lenders.

read story from the Plain Dealer .




February 26, 2007

Broker Admits Mortgage Fraud
James Sparks pleaded guilty to brokering loans as part of a $25 million scheme in which false information was submitted for federally-insured mortgages on behalf of spotty-credit individuals who were urged to do things, such as moving in before closing, to make it harder to back out when conspirators increased home prices shortly before closing.

read story from the Kansas City Business Journal .




TX Seeks Tougher Fraud Laws
A Texas bill aims to set specific punishments for mortgage fraud, such as up to 20 years in prison and fines of up to $10,000 for knowingly making false statements.

read story from the Express-News.




Fraudsters Target Run-down Areas
Flipping schemes, which are done through selling homes at an artificially-inflated value, are most common in run-down neighborhoods and further hurt the area's overall value and families.

read story from the News-Sentinel.




Colo. Bills Fight Fraud
To "put some teeth" into growth of foreclosure filings in Colorado, a top-10 hot spot for mortgage fraud, two bills seek for mortgage lenders to be licensed in the state and require them to consider the financial suitability of borrowers before making loans.

read story from the Rocky Mountain News.




AZ Closer to Mortgage Fraud Law
A bill that would make mortgage fraud a felony punishable by up to 10 years in prison passed the Arizona Senate last week and is on its way to the House. The legislation was inspired by cash-back deals in which fraudsters inflate a home's value to pocket extra proceeds from a mortgage.

read story from the Arizona Republic.




Man Admits Mortgage Fraud
James Parks admitted to participating in a scheme that targeted borrowers with credit problems and involved inflating home prices and submitting false financial information to get borrowers approved for mortgages.

read story from KQTV.




Politician's Fraud Case Inspires Bill
Accusations of mortgage fraud against Katheryn Shields, a mayoral candidate in Missouri, and her husband prompted Charlie Shields, a Republican, to file a bill that would make mortgage fraud a crime in the state.

read story from the Kansas City Star.




Bill Targets Mortgage Broker Scams
As a result of mortgage scams by brokers, such as offer an initial monthly payment that doesn't cover the interest and placing big fees in fine print for Spanish-speaking and other vulnerable consumers, a bill pending in Congress would require brokers to disclose -- in writing -- all fees and penalties associated with loans and would hold brokers liable for borrowers' losses and legal fees.

read story from the Chicago Sun-Times.




 


read archived blog entries

  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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