A former loan officer for Washington Mutual was sentenced to 15 months in prison by a federal judge last week. The sentence was for his role in a mortgage fraud scheme based in Southwest Florida. The 66-year-old banker is the fourth person involved in the house-flipping scheme to be sentenced and is one of 19 who have been convicted or pleaded guilty for their roles in the real estate fraud.
The specific actions the man was accused of included faking documents and approving deals with inflated purchase prices. He pleaded guilty to conspiracy to defraud banks and wire fraud. Prosecutors alleged that his actions cost the bank more than $1 million in losses. As part of the deal, the man agreed to pay his entire life savings, some $450,000 in restitution. That may have swayed the judge who could have sentenced him to three years in prison.
The judge referred to Sarasota, Florida, as the epicenter of the housing boom. The fraud scheme largely centered on properties in that area, one of several that has been noted by federal officials as being hotbeds for real estate fraud.
Of the 19 people implicated in this plan, 16 pleaded guilty. The information provided by those who pleaded guilty portrayed an 11-year period in which more than 100 illegal real estate transactions occurred, resulting in $200 million in fraudulently obtained loan proceeds.
Source: Herald-Tribune, "Sarasota banker sentenced to 15 months in flipping fraud case," by Michael Pollick, 14 June 2012