A $50 million mortgage fraud scheme, bank fraud by a title agency, mortgage Ponzi scheme by a former Republican chairwoman, and trouble for an alleged ring of scamming lawyers helped round out a week in mortgage fraud and demonstrate that sham loans are alive and well across the nation. A flurry of lawsuits, indictments, guilty pleas, and sentences awaited alleged and convicted schemers alike. The trouble arrived on the heels of a fresh ""Federal Bureau of Investigation"":http://www.fbi.gov/ (FBI) report that recorded a spike in mortgage fraud activity over 2010.[IMAGE]
The first instance found defendant Edul Ahmad, a real estate broker, up against the FBI, which released a ""statement"":http://www.fbi.gov/newyork/press-releases/2011/real-estate-agent-indicted-in-50-million-mortgage-fraud-scheme Friday signaling his indictment by a New York federal grand jury. According to the federal agency, Ahmad helped lead a mortgage fraud scheme from 1995 to 2009 that scooped up $50 million in fraudulent loans from Bank of New York, Citibank, JP Morgan Chase, Wells Fargo, and several other financial institutions. A number of the homes involved in his fraud activity foreclosed partly as a result, the statement said.
The jury charged Ahmad with 10 counts of bank fraud and one count to commit bank and wire fraud.
Commenting on his case, U.S. attorney Loretta Lynch said that ""[m]ortgage loans allow millions of Americans to turn the dream of home ownership into reality,"" stated United States Attorney Lynch. ""The system must be based on the accuracy of its information and the integrity of its members. The defendant allegedly brought neither to the table, abusing the trust of the financial institutions who relied upon him. We will vigorously prosecute licensed professionals who abuse their positions and harm our communities by undermining financial and real estate markets through mortgage fraud.""
""By repeatedly filing false mortgage applications, Ahmad allegedly committed serial bank fraud,"" FBI Assistant Director Janice Fedarcyk added. ""Such falsehoods are not merely lies, they were the modus operandi in essentially stealing almost $50 million. The FBI remains committed to investigating mortgage fraud.""[COLUMN_BREAK]
Meanwhile, far below the Mason-Dixon Line, Florida-based Cynthia Darlene Strickland, once the owner of a title agency, pled guilty Thursday to bank fraud. According to ""News 4"":http://www.news4jax.com/news/28919195/detail.html, the defendant may serve as much as 30 years in federal prison for her role in fraudulent property appraisals that scored prices far above agreed-upon terms and conditions, which banks and lenders approved accordingly.
The news outlet said that Strickland served as a closing agent at transactions on behalf of Juan Carlos Gonzalez and Barry Westergom, both of whom are alleged to have convinced her to inflate home prices. Concerning one such valuation, for example, the then-title agency owner slapped prices at $725,000, several figures above the initial $581,239.51 mortgage approved for a homeowner.
Ahead of a possible jail sentence, Strickland agreed to restitute $531,356.62 and forfeit some $178,625 in fraudulent fees, according to News 4.
Just a few states above Florida, in North Carolina, a former Republican chairwoman by the name of Loronda Murphy saw her name in headlines for all the wrong reasons, ""CBS News"":http://newyork.cbslocal.com/2011/08/19/former-north-castle-republican-chairwoman-indicted-for-mortgage-fraud/ reported Friday. She and Scott Forcino, her business partner with their company, Settle One Corporation, allegedly headed up mortgage closings that ran up costs for homeowners in a Ponzi scheme.
According to the news service, Murphy allegedly defrauded her own father in the scheme, representing but one among many who found that they had to pay off homes with multiple mortgages.
Filed by Westchester County district attorney Janet DiFiore, the suit included 19 counts for Murphy and three for her business partner. A $100,000 bond will keep Murphy in jail unless she can pay it.
A few thousand miles away from the Deep South, California state attorney general Kamala Harris made headlines by filing suit against a circle of lawyers for their alleged roles in gouging millions of dollars from the pocketbooks of 2,500 homeowners, ""CNN"":http://www.cnn.com/2011/CRIME/08/18/california.mortgage.fraud/ reported Thursday. The news outlet cast Harris as saying that the scam cost the victim-homeowners relief for their troubled mortgages.
According to the news service, Harris' civil suit accused three law firms, three attorneys, and a handful of other defendants of mailing over 2 million advertisements to homeowners across California and some 17 states. The suit pledged reduced interest rates and loan balances for homeowners who signed up to sue their lenders and servicers.
Harris said that the suit broke up what she called a ""fraud ring that is national in scope,"" describing the attorneys' schemes as a ""mass joinder scam.""
The California-based suit seeks payback from the allegedly scheming lawyers in the form of damages, fines, penalties, and restitution worth over $10 million, according to CNN.