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Insights from Patrick Crowley

Archives November 13, 2005

 


 
Insights from Patrick Crowley
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Fraud Wire



November 8, 2005


A bankruptcy lawyer in Pittsburgh is facing up to eight years in prison after pleading guilty to federal mortgage fraud charges.

Daniel J. Gates, 44, admitted he lied on a mortgage application for a $1.3 million loan, according to the Pittsburgh Post-Gazette. He also admitted to taking more than $400,000 from a couple who entrusted him with putting the money in a trust for their children.

Gates reportedly told the couple he was putting the money in CD's, but then spent the money for himself. Prosecutors said in a statement that on surveillance recordings Gates can be heard rehearsing the phony pitch he made to the couple.

On the mortgage application made to Skybank Gates indicated he received $450,000 in bonuses when actually that was money he allegedly embezzled from clients, prosecutors said.

Federal authorities reportedly said that Gates used the cash to buy expensive jewelry, artwork, sports memorabilia and show horses. The total loss to his victims was nearly $2.7 million. He will be sentenced Jan. 27.

read story from the Pittsburgh Post-Gazette .


Illinois U.S. Sen. Barack Obama has asked a Senate committee to hold hearings on the growing problem of mortgage fraud.

Obama, a Democrat, said a recent Chicago Tribune investigation showed that predatory mortgage fraud is disproportionately affecting the poor and African Americans, according to an AP dispatch.

Obama is requesting that the Senate Banking, Housing and Urban Affairs Committee hold hearings to determine if law enforcement and regulators have enough resources to tackle the problem and enforce lending laws.

Obama made his request in writing to the committee's Republican chairman and its ranking Democrat.

read article from the Associated Press .


November 7, 2005


A real estate lawyer is the latest defendant to be sentenced to prison as part of a $16.6 million Pennsylvania mortgage fraud scheme that targeted the U.S. government.

Attorney Michael Sedor was sentenced to seven months in prison and seven months home incarceration along with a fine of $5,100, according to press reports. Sedor was the settlement agent for most of the sales in the Barwood Estates development outside of Philadelphia.

Sedor was reportedly convicted of defrauding HUDs Urban Development mortgage program by disbursing loans even though he knew the seller or developer was providing buyers with their down payment and closing costs.

U.S. Attorney Thomas Marino told reporters that the funds were concealed through phony gift letters and bogus "sweat equity" that was hidden on settlement sheets.

Already sentenced in the case is Barwood Estates owner Gary Sweitzer and Harrisburg lawyer Charles R. Brown, who reportedly handled the closings.

Reportedly awaiting sentencing are Louis N. Fierro, a former loan officer with MNC Mortgage, the principal lender at Barwood, and Brian G. Hoch, the development’s sales manager.

read story from the York Daily Record

read story from The Patriot-News .

November 11, 2005


SEC Halts $10 Million Fraud Investment Scheme
Edward R. Showalter, 53, of San Clemente, Calif., and his two companies, High Park Investment Group, Inc., in Gardena, and Harbor Financial Investment Group, in Huntington Beach, are accused of duping more than 100 investors out of $10 million for fraudulent real estate investments.
read announcement from SEC
(scroll down page)


County Employee Tried to Bribe Another for Early Foreclosure Data
Donnavan Wallace, 34, who worked in the Miami-Dade County clerk's office, is charged with trying to pay off another employee to learn about foreclosure lawsuits before they were made public.
read story at the Miami Herald .


Hawaiian Man Sentenced for Texas Crimes
George E. Cardona was sentenced to over six years in prison for using a shell company, First Cambridge Mortgage Corp., to steal payments from customers of the prior mortgage tenant of his office.
read article from the Star-Bulletin

read article from MortgageDaily.com
(subscription required)


November 10, 2005


Mortgage Fraud News Sparks Investigation
The Chicago Tribune's recent series of mortgage fraud articles has prompted Cook County State's Atty. to call for a joint local, state and federal task force to investigate.
read story from the Chicago Tribune .


Title Executive Pleads Guilty to Mortgage Fraud
Thomas Kurzenberger plead guilty to stealing nearly $2.8 million from several of Title Insurers Agency's escrow accounts.
read story from the St. Louis Business Journal .


Spanish Speaking Seniors Preyed On
Fernando Acevedo, his daughter and his son-in-law, all who worked for One Stop Financial, are accused of falsifying loan applications, charging outrageous fees, and in some cases, keeping loan proceeds for themselves.
read story from San Antonio's NEWS4 WOAI .


Regular Cops Handle Much Mortgage Fraud
Sometimes it falls to a uniformed cop to unravel a loan scam, tracking it from the opening con to the sad finale.
read story from the Chicago Tribune .


Regaining Control of Fraud-Ridden Neighborhood
A cadre of Chicago residents, cops and city officials fought tooth and nail to oust an equally determined mortgage fraud gang and reclaim properties.
read story from the Chicago Tribune


November 9, 2005

Associates Fraud Stings CitiFinancial
Shortly after acquiring Associates Capital, CitiFinancial uncovered a fraud scheme at an Associates Chicago branch that involved negligent executives.
read story from the Chicago Tribune .


NetBank Delays Financials Because of Possible Fraud
NetBank Inc. warned investors it would delay issuing financials because of $13 million in conforming mortgage loans with irregularities.
read story at MortgageDaily.com
(subscription required)


Areas With Drugs, Crime Fall Prey to Mortgage Fraud
The boarding up of house after house in one Chicago neighborhood turned out to be the result of mortgage fraud.
read story from the Chicago Tribune .


Prosecutor Abandons Mortgage Fraud for Private Sector
A top central Illinois prosecuter who pursued mortgage fraud cases is stepping down to take a job in the private sector.
read story from the Peoria Journal Star .


November 8, 2005

Lunch With Mortgage Fraud Con
Jocqua Carter -- who was charged with five counts, including theft, money laundering and conspiracy, and pleaded guilty to one count of conspiracy and spent more than a year in prison -- said he copped the plea only because he was penniless and rendered sleepless by stress as he awaited trial.
read story from the Chicago Tribune .


Chicago Gangs Thrive from Mortgage Fraud
Over the course of a decade, Marvel Thompson, the reputed king of the Black Disciples street gang, used straw buyers, sham sales and phony identities to secure more than $1 million in mortgage loans that went unpaid.
read story from the Chicago Tribune


Fraud Hits Poorest Chicago Communities

The Chicago Tribune identified 524 Cook County homes involved in fraud cases since 2000 and found that they were clustered in low-income and minority neighborhoods.
read story from the Associated Press


Mortgage Fraud News From MortgageDaily.com

DALLAS, Nov. 7 /PRNewswire/ -- With trillions of dollars in annual mortgage production, fraud committed on just a small fraction of mortgages winds up in the billions, according to Sam Garcia, Publisher of MortgageDaily.com, the dominant online news source for the mortgage industry.
read press release from MortgageDaily.com

 
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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