August 12, 2005
A Missouri woman will do 18 months in prison after admitting to operating a $2 million mortgage fraud scheme.
Kimberly Williams, 46, did the basic flip -- she bought a house, arranged for another person to buy it at an inflated price and pocketed most of the money made on the bogus transaction. And true to form in most of the scams, she used phony documents to get the mortgages, according to KSDK television in St. Louis.
Williams reportedly used some of the money to another houses, including the home where she lived. To hide her ownership in the house Williams put the property in her mother-in-law’s name.
Williams was also charged with income tax evasion for not reporting the income she made on the sale of the property.
read story at KSDK.com
read story from Biz Journals
August 11, 2005
Two senior citizens are going to prison after being busted for running a California-based investment scheme that cost investors more than $8 million.
Darra N. Panthaky, 68, of Los Angeles, president of Alpha Funding, has been sentenced by a federal judge to 51 months in prison, according to a statement from U.S. Attorney McGregor W. Scott in Sacramento.
Wesley F. Stine, 68, a lawyer from Salt Lake City, was given 70 months. Stine got the longer sentence because he "misused his position and skills as a lawyer and lied when he testified at trial," Scott said.
Panthaky reportedly presented himself as a wealthy financier and humanitarian who promised investors a high rate of return on loans he claimed were backed by Ginnie Mae. Stine prepared documents used in the scheme and was a trustee of Alpha Group.
Investors were told that if Panthaky could not repay the loan, Stine would liquidate the Ginnie Mae securities and repay the money. But no securities were ever liquidated and investors lost millions, Scott said.
read announcement from the Department of Justice
The appraisal was done, the mortgage application was submitted and the credit reports were generated -- and the owners of the home didn't even know about it.
Two Philadelphia-area women -- Hafeeza Naba and Ayanna Wright -- are on six months house arrest for allegedly trying to sell a $320,000 house that didn't belong to them.
Both have pleaded guilty to federal wire fraud and conspiracy charges, the Courier-Post in Camden, N.J., is reporting.
Three other people who were involved in the scheme are serving prison terms.
The owners didn't know that they were being scammed. The defendants used fake IDs, including driver's licenses, and Social Security cards they had reportedly planned to use at the closing. They also had the appraisal done and submitted a mortgage application based on the doctored and fake documents.
Prosecutors wanted jail time, but the judge gave the women house arrest and five years probation.
One of those serving prison time, Dean Scott Lee, allegedly was going to use the money made on the scam to post bond on a murder charge he was facing. He is doing 64 months in jail for his role.
read story from the Courier Post
Two Denver-area mortgage loan officers and a Realtor are facing fraud charges for running a scam that allegedly targeted Hispanics.
Kenya Marina Hedges, a former loan officer with Alliance Mortgage Capital, Martha Pereda, an unlicensed sales person who also worked as a loan officer, and Realtor Patricia Livier Soehnge "conspired to violate Colorado's Attempt to Influence a Public Servant statute," according to a statement from the Jefferson County District Attorney's office.
An indictment charges the three with submitting fake documents to obtain government-backed loans for 41 home buyers who couldn't qualify for loans due to bad credit or because they weren't citizens.
The 41 homes totaled $$7.7 million. Soehnge allegedly made nearly $200,000 in commissions on the fraudulent transactions. The defendants are facing prison terms from three to 12 years, prosecutors said.
read story from the Rocky Mountain News
read announcement from Jefferson County
Ever heard of PinnFund USA, a Ponzi scheme that provided money for one its operators' girlfriends, who happened to be a porn star?
A major player in PinnFund, described as the largest Ponzi scheme in California history, has pleaded guilty to fraud and is facing 10 years in prison. The San Diego Business Journal is reporting that James Hillman, 65, of Oakland, raised money for the scam, which was busted for defrauding 166 investors of more than $300 million.
Prosecutors say Hillman was president of Peregrine Funding, a company "whose sole business purpose was to provide investors' funds to PinnFund USA Inc. purportedly for use in originating loans," the paper reported.
Hillman's actually role was pumping money into the company and support Michael Fanghella, the fund's CEO.
Fanghella reportedly was using the money to buy houses - including one for his porn star girlfriend - sports cars, trips and expensive dinners. He is doing 10 years in prison.
read story from the San Diego Business Journal
August 8, 2005
The feds have busted up a pretty good sized mortgage fraud ring in Indianapolis allegedly run by appraiser James Lee Spicer.
Spicer, 32, is facing federal charges of duping lenders by hiring straw buyers in a conspiracy to obtain mortgage loans.
They would buy houses and then use the bogus buyers to apply for loans at two to four times the properties’ actual worth. Spicer reportedly supplied the phony appraisals and other false documents to get the loans, according to the TheIndyChannel.com.
The loans, naturally, went into default.
The feds say that between late 2000 and early 2002 Spicer prepared 83 bogus appraisals for Promised Land Mortgage in Indianapolis. The company is accused of using fraud to obtain more than $4.2 million from a Michigan lender.
Spicer also allegedly prepared another 56 fake appraisals for American Saving Mortgage, also of Indianapolis, which the feds say fraudulently obtained $2.9 million from a bank in Kentucky.
Ten other people have been indicted in the American Savings case and are scheduled to go on trial in October.
read story from the TheIndyChannel.com
Here's a big flipping ring out of Illinois that involved 150 properties and more than $8 million.
A federal grand jury has indicted three people -- Frank "Kelly" Ciota, Gary Knox and Dennis Wiese -- on charges of running the scam that allegedly involved phony appraisals on dilapidated homes that were quickly sold at inflated prices.
According to the Springfield State Journal Register, Knox and Ciota allegedly made more than $3 million on the scam. Wiese, an appraiser, is accused of receiving up to $450 for each phony appraisal.
The crew would entice inexperienced real estate investors with promises of a $5,000 payment for each property they purchased; purchase with no money down; and help with loan applications.
Knox and Ciota were reportedly acting as property managers who claimed they would manage the properties and find renters. They did neither, the feds say, and mortgages went into foreclosure.
The scam went on for nearly six years until it was busted up earlier this year.
read story from The State Journal-Register
Scams like this always seem to, sooner or later, get busted.
Maryland developer Wilbert Brodie was using inflated appraisals and other phony documents to get overvalued loans on houses. He then spent the money and didn't pay off the loans.
So now he's going to jail.
Brodie has been convicted of the mortgage fraud scheme and was sentenced to nearly five years in prison. He also has to repay $355,000 he stole.
He ran his scam in the Washington D. C. area, the Associated Press is reporting via WJLA.
Lenders lost $850,000 in Brodie's alleged scam.
read story from the Associated Press
read announcement from the Department of Justice
A Delaware lawyer has been convicted of stealing almost 1 million bucks from a mortgage escrow account.
Daniel J. Anker was found guilty one nine counts of theft, according to the Delaware News Journal. He has not been sentenced. Anker has actually been suspended from practicing law since 2003.
Anker was allegedly tapping the account and was caught after failing to pay nine mortgages. An insurance settlement of $211,000 was also reportedly missing from the escrow account.
In the 2003 suspension report issue by the Delaware Supreme Court Anker is accused of failing to pay off the mortgages. The reports indicates that an investigative audit revealed "serious problems with Ankers' escrow account, including significant failures to safeguard and/or disburse client and third party funds, and a deficiency of funds in the report."
read story at DelawareOnline.com