Massive Mortgage Fraud Investigation Results in 17 More Charged

A massive mortgage fraud investigation led to 17 defendants being charged with crimes ranging from mortgage fraud to money laundering, according to a release from the ""Justice Department"":http://www.justice.gov/usao/ncw/index.html. The new charges bring the total number of defendants in the investigation to 81.

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A federal indictment unsealed in late October charges the 17 defendants with a number of crimes stemming from their alleged involvement in a criminal organization simply called the ""Enterprise."" The group, which operated principally out of Charlotte and Waxhaw, North Carolina, allegedly stole more than $75 million from investors and mortgage lenders.

The 81 defendants believed to have been involved with the Enterprise face a number of charges, including investment fraud, mortgage fraud, bank fraud, money laundering, and distribution of illegal drugs.

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According to allegations in the indictment, several of the defendants also bribed bank officials and committed perjury before a grand jury.

The Enterprise's mortgage fraud scheme involved acquiring luxury homes in neighborhoods in Charlotte and Waxhaw. According to the indictment, one member of the group would agree with a builder to purchase a property at the ""true price,"" making arrangements for a buyer to purchase the property at an inflated price. In most circumstances, the buyer would agree to purchase the property in their own name in exchange for a kickback.

The builder would sell the property at the inflated price, the lender would make a mortgage loan based on that price, and the difference between the inflated price and the true price would go to the Enterprise, the indictment says.

The indictment alleges that the Enterprise funded its mortgage fraud operation through a series of investment scams that defrauded more than 50 investors out of more than $27 million.

The indictment is just the latest in a series of criminal charges resulting from Operation Wax House, a mortgage fraud investigation that began in North Carolina in 2007. The list of defendants investigated and indicted in the operation includes attorneys and paralegals, bank insiders, builders and sellers, facilitators and financiers, buyers, real estate agents, and promoters, according to the Justice Department.