Federal prosecutors have charged 20 South Florida residents in one of the largest indictments in recent memory. The group, made up of mostly professionals in the real estate and banking industries, faces charges for their alleged participation in a massive mortgage fraud scheme. Each member of the group faces multiple charges. Each charge carries a potential penalty of 30 years in federal prison.
The U.S. Attorney's Office claims that the group conspired to falsify loan documents and illegally obtain home equity lines of credit over a three year period. From 2006 to 2008, the group obtained almost 200 such lines of credit for homes and condominiums in Miami and the surrounding areas of South Florida. Prosecutors claim that they did this by misrepresenting the financial information of borrowers, including their income and assets, and by enlisting the aid of a bank manager who has also been charged.
Once the loans were approved, a title agent would disperse the funds to the co-conspirators. Among the 20 people charged there are sales agents, mortgage brokers, the bank manager, the title agent, and a home appraiser. Each will now face charges of conspiracy to commit bank fraud, bank fraud and other charges, depending on the role each person played in securing the loans.
The U.S. Attorney's Office dedicates significant time and resources to catching and prosecuting people for mortgage fraud. The collapse of the housing industry has led to a sharp increase in enforcement activity. Real estate professionals who are under investigation or who have been charged should take note and protect themselves as soon as possible.
Source: The Miami Herald, "20 South Floridians indicted in home equity loan fraud case," Toluse Olorunnipa, 29 September 2011