A group of mortgage brokerages, property management companies and home improvement businesses were used to find individuals willing to serve as "buyers" in transactions that involved falsified mortgage applications. One of the buyers, an unemployed Connecticut man, was sentenced this week to 18 months in prison and asked to pay $328,516.31 restitution as well as forfeit $25,000 for his role in the mortgage fraud scheme. He was paid two installments of $5,000 and given bonuses by the group for identifying other buyers.
In October 2011, the man pleaded guilty to a single count of conspiracy to commit mail fraud and wire fraud. The larger scheme involved approximately 200 transactions and totaled nearly $9 million in losses to lenders. The man played a very small part in a large conspiracy.
Government prosecutors and the Federal Bureau of Investigation are aggressively pursuing anyone they suspect of having played any role in mortgage fraud. The collapse of the housing market and the subsequent bailout of many of the banks involved has increased the pressure to be seen as doing something to correct the problem.
Anyone who has been arrested, charged or who has reason to believe that an investigation is underway should contact an criminal defense lawyer who understands mortgage fraud cases as quickly as possible.
Source: LoanSafe.org, "New London Man Sentenced in Mortgage Fraud Scheme," by Evan Bedard, 14 August 2012