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Fraud
Stories
From
Patrick
Crowley

Fraud News Wire

Last Updated Thursday, October 11, 2006, 04:49 PM Texas Time


10 Years for Broker

CA $6 million mortgage fraud scheme will cost a southern California mortgage broker more than 10 years in prison.

James Davis Bennett, 52, was sentenced by a federal judge in Los Angeles to 121 months in prison and ordered to pay $715,050 in restitution and $12,500 in fines, according to a statement for the U.S. Attorney's office for the Central District of California.

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 11, 2006

Broker Scams Dominate Fraud
Mortgage brokers schemes are the single biggest mortgage fraud risk, according to an analysis of millions of loans.
MortgageDaily.com subscribers read full story.



Investors Face Jail Time
A group of five investors and its leader, Todd A. Kolbe, collectively face years of prison for engaging in a property-flipping scheme in which $7.4 million in mortgages were obtained from Home Star Mortgage Services -- $3 million above the properties' worth.
read story from The Herald Tribune.



Couple Suing For Scam
A mortgage company of Mitchell Sims, a broker who has pleaded guilty to grand larceny and awaits sentencing, is being accused of wrongfully foreclosing on a couple's home because Sims allegedly failed to pay the mortgage after tricking the couple into signing over the deed.
read story from Newsday.



Flipping Broker Imprisoned
David C. Jackson, a former licensed broker who operated Comvest Capital, was sentenced to 41 months in jail after pleading guilty to involvement in a $1.6 million mortgage-flipping scheme.
read story from the Post-Gazette.



Cross-border Mortgage Scam
A man paid over $2,000 in advance for a mortgage he never got from Montreal Expo Financial Services, which has been described by the Federal Trade Commission as an advance fee loan scam.
read story from First Coast News.



More Tips to Avoid Fraud
Consumers are advised to check out properties before buying, take time to review documents before signing and to protect the elderly, the group most vulnerable to mortgage fraud.
read story from CNN Money.



Fraud Prevention Service Due Soon
In November, Oakland County officials will launch FRAUDCHECK, an online service that will enable consumers to check home records to determine if any documents, such as quit-claim deeds and warranty deeds, have been forged and recorded illegally.
read story from the Detroit Free Press.



Former Lawyer Imprisoned
Jerard Hankin, a disbarred attorney, received a 27-month prison sentence for bribing mortgage companies into directing real estate closings to his law firm for over 8 years.
read story from The Tribune.



Officials Reveal Fraud Tactics
In a recent seminar, mortgage industry officials informed that the elderly and immigrants are often victims of fraud and outlined red flags consumers should watch for.
read story from the Poughkeepsie Journal.



Broker Jailed for Fraud
A seven year sentence and an order to pay $3.4 million in restitution was assigned to Kenneth McKinney for submitting false documents and inflated appraisals to get 99 mortgages -- all at the time he was president of American Savings Mortgage.
read story from the Indianapolis Star .



Brasota Saga Continues
The bankruptcy trustee of Brasota Mortgage Co., which has been in a series of legal disputes for allegedly running a Ponzi scheme, filed lawsuits against four investors who, within days of the company discovering its multimillion shortfall, had retrieved 82 percent of the funds they'd invested in Brasota.
read story from The Herald.




October 10, 2006


Fraud, Compliance Merged
ComplianceEase has entered into a partnership that will enable its clients to access BasePoint's FraudMark for a single fraud prevention and automated compliance solution.



Officials Reveal Fraud Tactics
In a recent seminar, mortgage industry officials informed that the elderly and immigrants are often victims of fraud and outlined red flags consumers should watch for.
read story from The Tribune.



Priests Ran Mortgage Scheme
Two of three priests said to invest thousands in a failed mortgage-loan scheme through SHAG Inc. have been accused of misappropriating $8.7 million from a church.
read story from the Palm Beach Post.



October 9, 2006

RE Flipper Sentenced
James Davis Bennett, who owned several real estate companies, received a 10-year jail sentence for operating an illegal flipping scheme that involved $6 million in fraudulent loans.
read story from the OC Register.



MI Officials Combat Fraud
A 141 percent increase in Michigan mortgage fraud has prompted state officials to create legislation and seminars to prevent borrowers from being duped.
read story from the Oakland Press.



October 6, 2006


RE Brokers Accused of Fraud

The state of Illinois filed a lawsuit against John J. Davis and Christine Frank alleging that the real estate brokers pocketed thousands of dollars in loan proceeds from repeatedly submitting fraudulent downpayment documents to mortgage lenders for loans on homes with inflated prices.
 

Mortgage Co. Owner Sentenced
Owner of Quantum Investments, Doris W. Jones, was sentenced to 21 months in prison for inflating appraisals, creating phony down payments, and giving false invoices to closing agents for home loans that resulted in nearly $700,000 in losses for lenders.
read story from Indystar.


 
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.

 


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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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