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Last Updated Friday, June 20, 2008 10:00 PM Texas Time

June 20, 2008

67 People in Chicago Charged
Dozens were arrested, including mortgage brokers, loan officers, Realtors, homebuilders and lawyers out of Chicago as part of Operation Malicious Mortgage. Details of this Chicago round-up are in a 14-page press release that outlines the involvement of more than $170 million in mortgage fraud in Illinois, Nevada and California. Lenders lost more than $24 million.

Six in Wash. Indicted in $8.5 Million Flipping Scheme
Former Seattle lawyer Robert Ernest Brandt, 40; William Anderson, 47, Mustafa “Marc” Khosraw, 46; Isaac Palmer, 42, alleged owner of GMI Construction; Kristyn Jupiter Moss, 38, a former loan officer for Viking Bank; and Zachary Joseph Namie, 30, are charged with conspiracy to commit fraud. If convicted, the defendants face up to 20 years in prison and a $250,000 fine.

More Named in Texas Mortgage Scheme
Twelve people were sentenced in a 16-person mortgage scam that involved properties in Austin and San Antonio. Sentences ranged from probation and fines to months in federal prison. Michael Breon was sentenced to 48 months and five years supervised release, his wife, Sinhu Sukumanran received 18 months in prison; real estate agent Marlon Nathan Torres and a straw buyer, Jeffrey Andre Wilkins both received 24 months in prison; closing attorney George H. Watson received 55 months in prison, one defendant was given probation and two others will be sentenced next week. Eight other defendants pleaded guilty to offenses related to the case. And the ringleader, Cornelius Robinson, will be sentenced in August because he is recuperating from open-heart surgery. Robinson was convicted on multiple counts of fraud.
Read story at The Statesman

Georgia Drops From No. 1 to No. 6 for Mortgage Fraud Incidence
FBI in Atlanta have arrested 60 people in Georgia in the last four years, involving millions of dollars in losses to lenders.
Read story at Macon.com

9 in Dallas Arrested for Mortgage Fraud
Eleven houses were involved in a scheme that resulted in the arrest of nine people in the Dallas-area. Three of the houses were on one street.
Read story at NBC 5 Investigative News

Eight in Vegas Indicted for Mortgage Fraud
Melissa Beecroft, Christina Thompason, Amy Ortiz, Jyothi Panikkar, aka Joe Panikkar, Gilma Ruiz and Francisco Ruiz. Four were arrested and two were indicted in California last week.
Read story at Las Vegas Now

Richmond Couple Stole Mortgage Information for ID Theft
Dewayne Gilmore was ordered to pay restitution of more than $77,000 and sentenced to 85 months in prison for conspiracy to commit identity theft and two counts of aggravated identity theft. His partner in crime Nicole Hymon was sentenced to one year on a conspiracy charge and two years for aggravated identity theft.
Read story at WRIC News

Nevada Couple Indicted, Face Life in Prison
Eve Mazzarella and Steven Grimm are charged with defrauding lenders of millions of dollars after buying 227 properties in Las Vegas using straw buyers. If convicted, the pair face hundreds of years in prison and millions in fines.
Read story at KNTV News

Twin Cities Top Ten for Mortgage Fraud
The FBI said the Twin Cities are one of the 10 worst for mortgage fraud in the United States. Dozens of investigations are in process as part of a nationwide effort to curb mortgage fraud. Three cases in Minnesota are expected to total almost $150 million in losses and over 365 homes.
Read story at Star Tribune

Miami Officials Arrest 22 for Mortgage Crimes
A total of 102 people have been charged or arrested since September in South Florida, contributing to at least $130 million in mortgage fraud. The 22 arrested are accountable for about $40 million of that total.
Read story at CBS 4 News

Six in San Diego Arrested for Mortgage Fraud
Rafael Santiago, Angel Armendariz, Lucette Montane, Abner Betech, Aviva Betech and Said Betech have been charged. Over $5 million in fraud, due to foreclosures can be attributed to these six people FBI officials have arrested. Abner Betech was the owner of Creative Financial Solutions, the rest of the players were loan officers.
Read story at Fox 6 News

13 Sentenced in Texas for Mortgage Fraud
Thirteen people have been sentenced for their involvement in a multimillion-dollar scheme involving multiple properties in Austin and San Antonio. The defendants were charged with conspiracy to commit fraud among others. If convicted on just that charge, they face up to 30 years in prison.
Read story at The Statesman

Two Utah Men Charged with Mortgage Fraud
In unrelated cases, Jerry C. Huff and Bryan D. Conrad, have been indicted for mortgage fraud, the latest in part of a national effort by the Department of Justice and FBI. Huff allegedly obtained a $250,000 mortgage loan furnishing false information. He is charged with wire fraud, money laundering and failure to file a federal tax return.

Conrad has been charged with bank fraud and aggravated identity theft. The FBI is currently investigating 31 cases of mortgage fraud in Utah.
Read story at KLS News

36 Arrested in Arizona in Nationwide Sting
Six investigations led to the arrest of 36 people in Arizona’s Operation Cash Back. Losses are estimated at $100 million to homeowners and other borrowers who were victims in Arizona.
Read story at ABC News 15

June 19, 2008

ID Theft Detection and Prevention Made Easier
2008 Red Flag Compliance tools, IDMatch and IDMatch+Plus, assist financial institutions in detecting and preventing ID theft and fraud.

Mortgage, Foreclosure and Investor Fraud
More than 400 defendants have been charged with mortgage fraud, investor fraud or foreclosure fraud since March, the government announced today. But the spotlight was on two former hedge fund managers who allegedly cost investors $1.8 billion in losses on mortgage securities.

Operation Malicious Mortgage was jointly announced by the Federal Bureau of Investigation and the U.S. Department of Justice.

From March 1 through yesterday, 406 defendants were charged in 144 mortgage fraud cases, the announcement said. Just yesterday, 60 arrests were made in 15 districts.
Read story at MortgageDaily.com

Mortgage Fraud Initiative Update Held Today
The U.S. Attorney’s Office in Miami is set to hold a press conference today regarding the status of the mortgage fraud initiative that was implemented last September.

The press conference is scheduled for 3 p.m. EST.
Read story at MySuncoast.com

TV Ads Used to Entice Homeowners in Foreclosure Scam
Cheryl Brooke, 51, Michael Lewis, 56, Earnest Lewis, 59, and Winston Thomas, 42, of Maryland have been indicted with charges of wire fraud and wire fraud conspiracy. The foursome offered to help those facing foreclosure but instead took control of the property and then failed to pay the mortgage, resulting in defaults for the homeowner.

The above is just a smidgen of the sweep of arrests made by the FBI since March. The FBI said it has arrested about 300 people and estimates over $1 billion in losses due to mortgage fraud crimes.
Read story at NBC4.com

Alleged Ringleader in TV Ad Foreclosure Scam Denies Wrongdoing
Michael K. Lewis told an investigative news team that he was helping, not harming people. Lewis has since been charged with wire fraud and conspiracy to commit wire fraud and if convicted could face up to a lifetime in prison and millions of dollars in fines.
Read story at WBLTV News

Midwest Man Charged with Fraud Moves to Wash.
Charged with wire fraud, Jeremy Richardson relocated to Ridgefield, Wash. where news investigators caught up with him for a face-to-face interview. He told them that he never intended to take money from people.
Read story at KATU News

28 Charged with Mortgage Fraud in Metro Detroit
An estimated $50 million in mortgage fraud crimes can be attributed to 28 individuals that live in Detroit and its suburbs. In addition, FBI in New York arrested Matthew Tannin and Ralph Cioffi, ex-managers for Bear Stearns hedge funds, for criminal charges related to the subprime mortgage market crash.
Read story at The Detroit News

10-Count Indictment Against Six in Houston
Trial has begun for six people accused of committing $25 million in mortgage fraud in Houston and surrounding suburbs. The each face a 10-count indictment for fraudulently inflating appraisals by about 100% and using straw-buyers to purchase the homes.
Read story at KHOU News

Senate Proposes Increase in FBI Agents to Handle Mortgage Fraud
The Senate is requesting a boost in manpower to combat mortgage fraud. The proposal cites a need for 25 additional agents to investigate mortgage fraud, bringing the number of agents assigned to such tasks to 175.
Read story at Seattle PI

Seven Charged in Atlanta Straw-Buying Scheme
A storage room was fraudulently sold as a condo in a scheme that involved mortgage brokers, a closing attorney and an IRS employee. All seven are charged with conspiracy to commit wire fraud. A preliminary hearing is set for June 30. Alleged ringleader Dossey Richards, 36, is being held without bond.

Richards inflated the appraised value of the condos in a 144-unit condo complex he owned and sold them to straw-buyers. Others named are Lovie Hobbs, Montra McKenzie, Cyrus Davis, and Michelle Davila, a Wachovia Bank employee from Atlanta, Rayshaun Harmon, and Marcus Vickers.
Read story at The Examiner

June 18, 2008

11 Texans Indicted for Fraud
Eight were arrested, 11 charged in a 51-count indictment involving millions of dollars and 11 residential properties.

Tennessee Trio Dupe Lenders for $2 Million with Straw-buyer Scam
Miles Jackson Black, Jeffrey Dunn Hathcock and Harold Hathcock are accused of using unqualified straw-buyers and false documents to purchase 22 luxury homes, all of which have gone into foreclosure costing lenders more than $2 million. Both Black and Jeffrey Hathcock have pleaded guilty, sentencing is set for Oct. 27; they face up to 30 years in prison and supervised release for five years thereafter along with a $1 million fine. Harold Hathcock is scheduled for trial Sept. 16.
Read story at Nashville City Paper

Minn. Real Estate Agent Charged, Costs Bank $1 Million
John M. Rubischko, 36, was charged with fraud and aggravated identity theft that cost Bremer Bank more than $1 million. Rubischko, a real estate agent and mortgage broker, owned Family First Mortgage, formerly known as All Fund Mortgage, now known as MortgageBanc.us. Sixteen fraudulent financial transactions were made including mortgage loans, lines of credit and home equity loans, one of which was taken out with U.S. Bank.
Read story at Star Tribune

June 17, 2008

Anchorage Real Estate Agent Surrenders License, Charged with Fraud
Michael Sorensen, 40, was sentenced to three years probation and a $60,000 fine on charges of wire fraud in March. Sorensen was part of a “cash-back scheme” that duped lenders by submitting fake invoices for repair work on properties that were for sale.
Read story at Anchorage Daily News

Tucson Man Gets Two Years for Straw-Buying Scheme
Frank Padilla pleaded guilty to charges of conspiracy to commit fraud and money laundering. He was sentenced to two year in prison followed by three years of supervised release. Padilla was also ordered to pay back more than $1.1 million to two banks that were victims of his scheme that involved 21 residential properties.
Read story at AZ Star Biz

Broker Involved in Long Beach Mortgage Fraud Pleads Guilty
William T. Bridge, 41, pleaded guilty to one count of filing a false tax return and three counts of paying illegal kickbacks. Bridge said he made more than $10,000 annually from 2003 through 2006 from fraudulent loans. Sentencing is set for Sept. 2. If convicted, he faces up to three years in prison for tax offenses, a fine up to $100,000 and an unknown amount of restitution.
Read story at Sacramento Business Journal

June 16, 2008

Long Beach Mortgage Employees Commit Fraud
Joel Blanford, 40, of San Ramon, Calif. was indicted on six counts of mail fraud and one count of conspiring to engage in money laundering. He allegedly paid a loan coordinator at Long Beach, a former subsidiary of Washington Mutual, Inc., $54,000 to help him get fraudulent loans approved. They defrauded their employer of $1 million.

Four others have pleaded guilty to perjury, mail fraud and money laundering in connection with the case. Those found guilty of both mail fraud and conspiring to engage in money laundering can face up to 50 years in prison and fines of up to $750,000.

Justice is Served For Ohio Man Convicted of Mortgage Fraud
Today’s the day Robert L. Dodsworth, 60, is to begin a six-year stint in federal prison for his involvement in a mortgage fraud scheme that cost its victims over $1 million. Dodsworth had pleaded guilty to fraud and conspiracy charges last November. Dodsworth is one of five people charged in connection to this case. Others named include Frank Kartesz II, Gregory M. Finney, Keith A. Rice and Francis R. Conti.
Read story at Erie Times News

More Names, Details in Long Beach Mortgage Fraud Case
William Bridge, 41, owner of The Loan Center has been charged in connection with a multi-million dollar mortgage fraud ring that involved employees at Long Beach Mortgage. Bridge was charged with filing a false tax returen and paying-off a loan coordinator, John Ngo, 27, who was an employee of Long Beach along with Joel Blanford, 40, a loan rep. for Long Beach.
Read story at News 10

Straw-Buyer Scheme Might Be Largest in Minnesota
Michael Prieskorn, 33, is under investigation for his involvement in arranging the sales of up to 340 homes with 90 buyers in Minnesota and Wisconsin. Prieskorn may have grossed as much as $20 million from fees, according to court documents. No charges have been filed yet.
Read story at Pioneer Press

Mich. Newspaper Investigates Suspicious Mortgage Activity
The Kalamazoo Gazette in Michigan says that one of the county’s residents has bought 38 houses in a 22-month period, all of which have gone to foreclosure and were bought at inflated prices. The Gazette investigates why Rodney Hixon has $3.5 million in outstanding mortgage debt to various lenders.
Read story at Kalamazoo Gazette

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