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Fraud
Stories
From
Patrick
Crowley

Fraud News Wire

Last Updated Thursday, October 05, 2006, 04:49 PM Texas Time


Mortgage Fraud a $1 Billion Industry

Losses from mortgage fraud ballooned to $1 billion last year, and the Federal Bureau of Investigation is blaming mortgage brokers for the increase. Meanwhile, Los Angeles is the star in an upcoming FBI report.

Federal Bureau of Investigation spokesman Steve Kodak has confirmed the figures to MortgageDaily.com.

An entire report on mortgage fraud will be released within a few weeks, Kodak said. He would not comment further on the numbers or offer an analysis or perspective on the report.

"In a couple of weeks the end of the fiscal year report will have the new data," Kodak said in a brief phone interview. "I'm not going to speculate right now."

MortgageDaily.com subscribers read Patrick's full story

Countrywide Stung by Massive Fraud

Countrywide Home Loans appears to have been victimized in a mortgage fraud case that could involve as much as $40 million.

Calabasas, Calif.-based Countrywide, the nation's largest residential mortgage lender, has filed suit in Marion County, Indiana, trying to recover millions in allegedly fraudulent loans made to unsuspecting buyers in Virginia and North Carolina, according to a copy of the complaint provided by the company.

The loans totaled more than $15 million, court documents indicate -- but published reports have put the figure at as much as $40 million or higher.

The alleged perpetrators used a scheme to entice borrowers to join an "investment opportunity" or "investment club" that, according to a lawsuit, were nothing more than the fronts a complex property flipping and mortgage fraud ring.

MortgageDaily.com subscribers read Patrick's full story


October 5, 2006


Tips to Avoid Fraud
The California Escrow Association suggests borrowers should check their credit reports, title records and tax bills in an effort to avoid mortgage fraud.



Mortgage Co. Operator Awaits Sentencing
Sentencing is yet to be scheduled for Troy Scott Clements, operator of American Funding, who pled guilty to fraud involving use of the company to obtain million of dollars from mortgage lenders.
read story from The Community Press & Recorder .



SoCal Fraud Prompts Default Worries
Fraud for housing, including borrowers overstating income, surged in Southern California, where suspicious activity reports are on track to double last year's total, and has industry observers worried that many defaults will ensue as a result.
read story from The Mercury News .



Jail Time for Mortgage Fraudster
In addition to a 4-year sentence, Theodore Antonucci must pay over $900,000 for submitting fraudulent documents to obtain mortgages.
read story from WHAM 13 .



Roof Scam Season Is Here
An assistant attorney general warns that fall is the season most likely for fraudulent roof repairers to come knocking on doors and steal borrowers' home equity.
read story from Heartland News .



Mortgage Processor Guilty of Fraud
John Kurzel, a loan processor of bankrupt NJ Affordable Homes, faces up to 71 months in prison after pleading guilty to creating fake documents to obtain mortgages in the names of investors who collectively were allegedly duped out of $40 million.
read story from The Star-Ledger .



Fraud Victims Interviewed for TV Show
ABC Nightline news will air a report Friday based on the interviews of 27 people who claim they were victims of an alleged real estate scam in Indiana.
read story from Martinsville Bulletin .



False SSN Extends Fraudster's Sentence
After almost a year in jail, Michael Lane Prevette was assigned another six months for admitting he used false Social Security numbers on things such as an employment application to a mortgage company.
read story from Press-Register .



Accounting Co. Settles Fraudulent Mortgage Financials
PricewaterhouseCoopers entered into a $39.5 million settlement with investors who accused the company of assisting in a fraudulent mortgage loan fund scheme for not revealing audit findings of fraud.
read story from WebCPA .



SoCal Fraud Prompts Default Worries
Fraud for housing, including borrowers overstating income, surged in Southern California, where suspicious activity reports are on track to double last year's total, and has industry observers worried that many defaults will ensue as a result.
read story from The Mercury News .




October 4, 2006


2005 Mortgage Fraud $1 Billion
Mortgage fraud reached $1 billion during 2005, according to government data provided to MortgageDaily.com



LOS Integrates Fraud Protection
Users of Ellie Mae's mortgage automation systems can now integrate LoanShield, a mortgage loan fraud protection service by Advantage Credit International, into each of their applications.



New Collateral Risk Solution
Amongst Kroll Factual Data's expansion of risk detection tools was the launch of CollateralFacts, which evaluates property flipping, over-valuated appraisals, and ownership and title issues.



Loan Closing Greatest Fraud Deterrent
The Ciercus system, which offers settlement agent registration, closing document collection and data reporting, was recently touted as the "greatest deterrent for mortgage closing fraud that exists today."



Website Touts Fake Income
Interthinx issued a warning about an Internet Web site, www.proofofincome.com, which was set up to produce fake paystubs to be used in real loan qualifications.


September 29, 2006


Warehouse Lending Workshop
Mortgage fraud mitigation will be one of the many topics covered in the workshop Street Resource Group will host in Chicago on Oct. 23 for lenders who provide interim funding to the small cap mortgage originator market.



QC Tool Launched
At a conference today, Visionet announced the availability of Closed Loop QA/QC, which enables automated predictive modeling, fraud risk management, and error recording.



FraudGUARD Officially Launched
Interthinx announced the offiicial launch of FraudGUARD -- its next generation of loan-level fraud detection.



Realtor's Sentencing Delayed
Mary E. Bolan, a real estate broker who plead guilty to mortgage fraud, had her sentencing delayed.
read story from the Bradenton Herald .



3 Linked to Mortgage Fraud Scam
Mortgage brokers Leanne Booth of Home Mortgage Corp. and Ryan F. Bonneau and real estate agent Troy Martin are being accused of conspiring in a scheme that involves submitting false documents to mortgage lenders as a means to pocket thousands of dollars.
read the story from The Oregonian .



CO Closely Eyeing Appraisers
In an effort to minimize escalating foreclosures, the new real estate division chief of Colorado will begin her plan to shut down fraudulent appraisers by unveiling the investigation next month of an appraiser believed to inflate property values by as much as $100,000.
read the story from the Rocky Mountain News .



Broker Used Shell Co.s For Mortgages
Mortgage brokerage owner Nicholas Piscitelli was charged with wire fraud for allegedly creating a fake company to create phony rental history documents so lenders could issue loans to unfit borrowers.
read story from the Philadelphia Daily News .



Appraisal Fraud Leads to Foreclosure
A couple's home went into foreclosure after a mortgage refinanced with Centex Home Equity turned out to have terms different than what the borrowers were told and had new monthly payments too large to handle because the value of the home was allegedly inflated.
read the story from the Community Press



Flipping Gets Ex-Pastor Convicted
Former church youth pastor Israel Pena could receive up to 65 years in prison for a scheme in which he would buy homes and quickly sell them at a substantial profit to borrowers who submitted fraudulent applications to qualify for a loan.
read the story from the Mid-Hudson News .



Attorney Admits to Mortgage Fraud
Michael M. Hipe faces up to five years in the slammer after pleading guilty to charges related to submitting fraudulent home loan applications to obtain money for his personal expenses and auto business.
read the story from the Gwinett Daily Post .



MD Warns of Foreclosure Rescue Scams
Some state officials worry that fraudulent foreclosure help will continue growing due to housing and mortgage market conditions.
read the story from the Baltimore Sun .



Landlord Sentenced After Massive Foreclosures
Robert J. Palano received a 1-year prison sentence for letting over 100 rental properties fall into foreclosure and for stealing money from a lender, events that separately required him to pay $1.5 million in restitution for lenders, including Fannie Mae, that lost money.
read the story from The Buffalo News .



Man Admits Fraud
James Elliot Coleman faces prison time after pleading guilty to several charges related to his participation in a mortgage and insurance fraud scheme from which he obtained proceeds for his personal use -- such as repaying money he embezzled from a school board he headed.
read story from the Kansas City Business Journal .



7 Years for Mortgage Fraud
Charlie Reed Smith, who pleaded guilty to mortgage fraud, was sentenced to seven years and agreed to testify against the man who allegedly recruited him into a fraud ring.
read the story from the Atlanta Journal-Constitution .



Forensic Accounting
William D. Brown, a former FBI agent, is now a forensic accountant that dissects mortgage fraud cases.
read story from the Fort Worth Business Press .



Mobile Home Mortgage Fraud
Richard D. Meador and Donald Scott Carroll, both mobile home salesmen, were sentenced to prison for helping Donald Wayne Gupton, owner of the the dealership, commit mortgage fraud.
read story from Internet Broadcasting Systems .



No Money Down a Sham
Troy Scott Clements, who operated American Funding, pleaded guilty Friday to promising unsuspecting borrowers they could obtain financing with "no money down."
read story from the Enquirer .



Convicts Conversations Can be Considered
As he awaits sentencing for mortgage fraud on government loans, Joseph Greenblatt's attempt to keep his jail telephone records and visitor logs confidential was struck down by a judge
read story from North Jersey Media .



Jail for Fraudster
Rob Ellertson was sentenced to nearly 3 years in prison for executing mortgage documents using straw buyers.
read story from Deseret News Publishing .



Restauranteur Going to Jail
George Broches, a former restaurant owner, and his former business partner, Dimitrios Brotsis, were sentenced to prison for commiting loan fraud.
read story from the Daily Chronicle .



Texas County Busy With Fraud
Two continuing investigations in Collin County, Texas, already have yielded convictions on mortgage loans totaling more than $10 million
read story from the Dallas Morning News .



Man to Serve For Mortgage Fraud
Ronald A. Waker was sentenced to 20 months after funneling over $10 million in 148 fraudulent mortgage loans obtained through false statements.
read the story from the Dayton Daily News .



2 Men Sentenced For Mortgage Fraud
Mobile home salesmen Richard D. Meador and Donald Scott Caroll will go to prison for a $19 million fraud scheme in which they falsified loan applications to qualify borrowers with bad credit and whose inability to afford the loans resulted in foreclosure.
read the story from the News Observer .



Former Attorney Faces Prison
In October, ex-lawyer Jerard Hankin is scheduled to appear in federal court and faces up to 35 years in jail for charges related to his bribing mortgage companies in exchange for real estate closings.
read the story from Poughkeepsie Journal .


 


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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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