The federal government expends significant resources investigating and prosecuting cases involving housing industry crime. Anyone thought to be involved in a scheme to defraud a bank or other party to a mortgage may find themselves charged in federal court. A person accused of mortgage fraud, bank fraud or real estate fraud faces severe penalties if convicted.
Last week, a Florida attorney was acquitted by a federal jury in a case involving a mortgage loan scam. The attorney faced multiple counts of bank fraud and conspiracy to commit bank fraud. The scam is alleged to have cost the banks involved several million dollars. The federal jury found the attorney not guilty on all charges.
The attorney acted as the closing agent in a series of transactions for vacant north Florida properties. Prosecutors argued that the attorney knew or remained deliberately ignorant of the fact that the documents supplied for the closings contained false information. The false information included inflated prices for the real estate and incorrect income and down payment information of the buyers.
The case turned on whether the lawyer was aware of the scam, or was an unwitting participant in a scheme perpetrated by others. In the end, the jury found that there was insufficient evidence to support the charges.
The real estate developer and the people recruited to serve as "straw buyers" in the scheme pleaded guilty. They were caught in the federal government's Operation Stolen Dreams, a nationwide effort targeting crime in the housing industry.
As the government's efforts to combat mortgage fraud increase, more and more people may find themselves facing criminal charges. In some cases, like this one, the party charged may not have had any idea that a criminal act was being committed.
Source: The Miami Herald, "Plantation attorney acquitted in federal mortgage fraud case," Toluse Olorunnipa, 21 Apr 2011