20 Floridians, Former Company Exec Accused of Mortgage Fraud

A former mortgage company executive and 20 South Floridians found themselves in a hot seat Thursday as authorities pressed charges for roughly $8 million and $40 million in mortgage fraud activity, respectively, according to multiple news outlets. The news follows a mortgage fraud report that forecasts $73 billion in mortgage fraud over the rest of the year.

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_MReport_ culled information from two news sources for the mortgage fraud blotter Thursday. These include the ""_Miami Herald_"":http://www.miamiherald.com/2011/09/29/2431659/20-south-floridians-indicted-in.html and ""_Twin Cities Pioneer Press_"":http://tcbmag.blogs.com/daily_developments/2011/09/former-mn-mortgage-firm-exec-accused-of-8m-fraud.html.

For allegedly raking in $40 million between 2006 and 2008, U.S. District Attorney drew up indictments for 20 South Floridians with allegations that the defendants submitted fraudulent applications and tore into balance sheets for people at every ladder of the industry, including appraisers, bankers, brokers, and sales and title agents, according to the _Herald_.

The newspaper found the indictments alleging that a string of brothers, sisters, and friends fraudulently secured home equity lines of credit and loans for properties around Miami, with a co-conspirator and bank manager signing off on the fraudulent loans.

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The few defendants conspired with mortgage brokers to falsify loan applications, with a title agent, also charged, acting as the group paymaster by distributing millions in illicit loan proceeds, according to the newspaper.

The _Herald_ quoted U.S. District Attorney Wifredo Ferrer as saying in a statement, ""Even by South Florida fraud standards, today's prosecution is shocking. Never before have we seen so many real estate and bank industry professionals charged in a single indictment.""

Authorities slapped the 20 defendants with charges of conspiracy to commit bank fraud and bank fraud, among other charges, with those with convictions set to face 30-year sentences for each count, according to the newspaper.

Meanwhile, in Minneapolis, a former company executive found himself in the hot seat for allegedly bilking a lender out of $8 million, according to the _Pioneer Press_.

The newspaper reported that Joseph Traxler, former CFO with now-defunct Centennial Mortgage and Funding Inc., received charges that have him allegedly aiding and abetting bank fraud between 2007 and 2008.

The _Pioneer Press_ found that Traxler gathered up straw buyers to purchase properties, whose prices he inflated over the abovementioned timeframe.

Court documents reviewed by the newspaper alleged that the former executive used company funds to twice fund some 23 mortgage loans, which he deployed and misrepresented to secure cash from lenders, the newspaper said.

If convicted of the federal charge, he could also see 30 years in the slammer, according to the newspaper.