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Archives September 11, 2005

 


 
September 9, 2005


In almost four years of writing about mortgage fraud I don't think I've ever seen a case quite like this.

Julia K. Clark of Madison, Ala., has been indicted by federal prosecutors in Alabama for allegedly using fraud to obtain a mortgage on a house being seized by the feds because of drug activity.

The feds had filed a civil forfeiture in federal court to take the house because it had been used to store and sell drugs, according to a statement from federal prosecutors.

"By putting a mortgage on this drug stash house which was subject to forfeiture (Clark) tried to cheat the United States and the bank," U.S. Attorney Alice Martin said in the statement.

Clark faces five years in prison and a $250,000 fine if convicted on the charge of destruction or removal of property to prevent seizure.

read announcement from U.S. Department of Justice


A mortgage broker involved in the biggest fraud in British Columbia history will do three years for his role in the Eron mortgage fraud scheme.

Frank Biller had pleaded guilty to theft and fraud charges in the failure of Eron, which cost investors $240 million. According to Canada's CBC, the judge found that Biller was not as responsible as Brian Slobogian, Eron's top executive, in bringing the company down. But he still withheld crucial information from investors, the judge reportedly said.

Biller was Eron's chief mortgage broker, selling real estate developments to investors and promising high rates of return on mortgages placed on "valuable properties with guaranteed security."

But none of the company's projects made money and many were over-mortgaged, CBC reported. To cover itself the company began what looked like a Ponzi scheme, paying old investors with money from new investors.

Some of the money, however, was spent on lavish parties, golf club memberships, Rolex watches and expensive homes for Eron executives.

Slobogian has previously pleaded guilty and is doing six years in prison.

read story from CBC


A county official in New Jersey has been suspended from his job without pay after being indicted on federal mortgage fraud charges.

Jerome Womack, 38, supervisor at the Somerset County Recycling Center, is accused along with three other people of taking part in a fraud scam in the Pittsburgh area.

Prosecutors allege Womack and the others were illegally flipping properties in the Pittsburgh area by buying houses, inflating their values and then duping buyers into taking out mortgages for more than the houses were worth. The scam totaled about $1.8 million, according to NJ.com.

Phony documents -- the tools almost always used in flipping schemes -- were also involved, including fake income and asset statements.

A mortgage broker, David Jackson, was also reportedly part of the scheme. The others are Lavelle Snead and Robert Kohlman, who have been described as the ringleaders.

Womack was allegedly a straw buyer who helped inflate the values of the property.

read story at The Star Ledger


These scams where someone offers to help homeowners in financial trouble by boosting their credit scores and decreasing their monthly mortgage payments are becoming more common.

But at least one of the alleged schemes has been busted in California.

Prosecutors in Hayward, Calif., say Kaseem Mohammadi, 25, has pleaded not guilty to bilking deeds and cash out of six homeowners. He is facing 13 counts of real estate fraud.

The Associated Press reported that Mohammadi and two accomplices used the line about helping people improve their credit and reducing their mortgage payments. Instead, they stole half a million dollars, prosecutors said.

Not only that but all six people lost the titles to their homes.

Prosecutors also reportedly believe that Mohammadi stole $268,000 from his employer.

read story by Associated Press


September 6, 2005


A Texas judge has halted a Houston woman from running what authorities have described as a foreclosure rescue mortgage scam.

Harris County District Judge David Bernal granted the temporary restraining order and asset freeze against Bobbie Heckard after Texas Attorney General Greg Abbott filed a lawsuit against her.

Heckard reportedly swindled an 85-year old man out of his home under the guise of helping him stave off a foreclosure, the North Texas E-News is reporting.

According to authorities Heckard finds homeowners, many of the elderly, who are facing foreclosure. She then convinces them to sign documents that allegedly authorize her to contact mortgage companies on their behalf.

But actually the owners are signing over deeds that transfer ownership to Heckard.

The attorney general’s lawsuit seeks a $250,000 penalty, plus $20,000 for each and any violations of the Texas Deceptive Trade Practices Act, the paper reported.

read story at North Texas E-News

read announcement from the Consumer Affairs office

 
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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