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Archives September 11, 2005

 


 
September 16, 2005


Two real agents were arrested in an alleged mortgage fraud scheme in Colorado, which seems to be a growing hot bed of mortgage fraud.

William E. Mendez, 40 and Claudia Mendez, 33, of suburban Denver have been indicted by a federal grand jury for using false documents to quality people for mortgage loans who couldn't qualify on their own.

The pair is the latest indicted in a scheme that has already included 11 other indictments and charges against 82 other people in the mortgage brokerage and real estate businesses.

"For the last two and a half years our office has quietly worked its way from buyers who lied on their mortgage applications all the way up to the real estate agents and mortgage bankers who participate in the fraud," U.S. Attorney Bill Leone said in the statement.

Prosecutors said William Mendez pulled employees from his real estate business in the scheme, paying them approximately half the commissions from the bogus transactions; he allegedly kept the rest.

William Mendez faces 32 counts and is looking at dozens of years in prison. Claudia Mendez was indicted on 12 charges.

read announcement from U.S. Attorney

read article from Rocky Mountain News


September 14, 2005


Edward Garnett, 62, and Shirley Akey, 69, made $1.4 million on an alleged South Florida mortgage fraud scheme that has been busted by the feds.

The pair has been charged by federal prosecutors in Miami with loan fraud, money laundering, wire fraud, conspiracy and other charges, according to a statement from the U.S. Attorney's office.

Garnett allegedly used fraud to obtain 12 mortgage loans totaling nearly $6 million. He used luxury properties he lived in as collateral but submitted false information on loan applications that included "overstated income, overvalued assets, false employment information and false tax information," prosecutors said.

Akey allegedly helped pull the scheme off by laundering money through her bank accounts and participating in the loan fraud.

They face more than 100 years in prison and $6 million in fines.

read announcement from U.S. Department of Justice

read story from the South Florida Sun-Sentinel


September 13, 2005


The Feds say a New Jersey real estate agent stole an astounding $40 million through an alleged Ponzi scheme that involved interests in mortgages.

Wayne Puff, 57, founder of NJ Affordable Homes in Woodbridge, N.J., has been sued by the SEC for selling "unregistered offerings" of at least $40 million to nearly 500 investors across the country.

NewJersey.com is reporting that Puff's company promised returns of 15 to 20 percent on the plan to buy homes, renovate them and then sell the properties.

But Puff and the company misled investors about the rate of return and paid off new investors with money from earlier investors, a scheme in the fraud world known as a Ponzi scheme, the SEC reportedly said in its lawsuit.

The SEC also alleges that Puff and the company did not properly warn investors about the risks involved in their plan and "routinely inflate(ed) the value of the property upon which NJ Affordable granted mortgage interests," the Web site reported.

NewJersey.com tried to contact the company but its phone has been disconnected. A court hearing is scheduled Oct. 11.

read story from North Jersey Media Group


George Nason, a Tennessee lawyer wanted on mortgage fraud and money laundering charges, ran but couldn't hide from the feds.

WVLT and the Associated Press are reporting that Nason has been extradited from Brazil. He is one of 11 people reportedly indicted in 2002 in connection with a company called Loan Ranger. He is wanted for allegedly using straw buyers to buy homes at inflated prices -- in other words, a flipping scheme.

Nason and the other reportedly bought property and then sold the property to fake buyers, who borrowed more money that the properties were worth. Allegedly, the buyers were paid up to $10,000 for their help in the scheme, which included 13 loans totaling $3 million.

Nason faces a host of charges, including mortgage loan fraud, bank fraud, making false statements to financial institutions and money laundering.

He fought his extradition in a case that went all the way to the Brazilian Supreme Court, which turned down Nason's case. Federal marshals brought him back to Nashville over the weekend.

read story from the Associated Press


September 12, 2005


Even in Georgia, a state infamous for mortgage fraud, a $20 million fraud ring is big.

Federal prosecutors have just reeled in another member of the property flipping ring, former mortgage broker Judith "Judy" Hooper, who will do 70 months in a federal prison after pleading guilty to fraud charges.

Federal prosecutors in Atlanta say Hooper is the 10th person to plead guilty in the fraud. She was convicted of changing her identity to fraudulently apply for loans. She even used the Social Security number of a two-year-old.

Hooper was on the run for almost five years before authorities caught up with her. She was allegedly hiding out in Canada and Central America, prosecutors said.

read announcement from U.S. Attorney's Office

read court data


A husband and wife from the Boston area will avoid jail after pleading guilty to mortgage fraud, credit card fraud, identity theft and other charges.

Itza Ruiz, 39, was sentenced in U.S. District Court in Boston to two years of supervised release with the first six months to be served in home confinement. She must also pay $18,083 in restitution to creditors.

Her husband, Heriberto Ruiz, 48, was sentenced to one year of supervised release.

According to prosecutors the couple pleaded guilty in April to 23 counts of fraud, making false statements on immigration papers and misrepresenting Social Security numbers among other charges.

Prosecutors said in a statement that Ruiz stole a woman's identity and used it to get a $318,250 mortgage. She also used the identity to get student financial aid and grants, apply for credit cards and open a checking account. In addition, she applied for U.S. citizenship with the information. Her husband signed many of the fraudulent documents, including the mortgage loan application.

The couple was busted after the woman whose name and Social Security were stolen applied for a car loan and discovered negative entries on her credit report, prosecutors said.

read U.S. Department of Justice Announcement

 
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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