Frank A. Rubino , ESQ.

FEDERAL AND INTERNATIONAL CRIMINAL DEFENSE

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Man sentenced for Florida mortgage fraud scheme

While the troubled economy can certainly be to blame for the multitude of foreclosures and short sales in Florida, at least some of these real estate transactions have involved mortgage fraud.

As an example, one mortgage fraud scheme allegedly involved the purchase of 70 homes, both in Florida and Minnesota, during a four-month period back in 2006 and 2007.

In 2010, a 37-year-old man was charged in connection with this mortgage fraud scheme. The charges against him were conspiracy to commit wire fraud and engaging in an illegal monetary transaction.

The buyers were promised $5,000 for every purchased property. The mortgages were described as being risk-free to the investors, even though legally the buyers were responsible for paying the loan amounts. The accused man told the investors that he would be responsible for making all mortgage payments and bills associated with the properties. The buyers were told that after a specified period he would sell the properties at no cost to them.

However, the man did not make the scheduled mortgage payments. As a result, in many cases these real estate transactions would then enter default shortly after the transactions closed.

These on-paper homeowners then had to sell the homes through short sales or foreclosures. The total estimated loss to mortgage lenders was allegedly $18 million.

As part of his plea agreement, the accused man did admit to conspiring to obtain mortgage loan proceeds from the 20 unsuspecting buyers who purchased the properties. He also admitted to receiving $1 million from the mortgage fraud scam. Just recently, this man was sentenced in federal court to six years in prison for his role in this Florida mortgage fraud scheme.

Source: Austin Post-Bulletin, "Ellendale man sentenced for mortgage fraud," May 12, 2012

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