Entries in Flipping (519)

9:53PM

Man indicted in North Carolina failed flip transaction allegations

United States Attorney Frank D. Whitney announced that STANLEY H. VAN ETTEN, 42, of Millbrook Road, Raleigh, N. C., and Bridgestone Drive, Orlando, Florida, was indicted by a federal grand jury in Raleigh on Thursday, October 7, 2004, for offenses related to a failed real estate transaction and related insurance fraud in the Spring of 2002. Charges in the indictment include conspiracy, as well as wire and mail fraud, relating to submitting false statements to mortgage loan and insurance companies as part of a scheme to fraudulently finance a real estate “flip transaction.”

The indictment includes the following factual allegations: STANLEY H. VAN ETTEN submitted false and fraudulent financial information in order to acquire a home at 1705 Snow Wind Court in Raleigh, N. C., and to immediately sell the property to a third party buyer in a transaction otherwise known as a “land flip.” The specific objects of the conspiracy were: (1) to fraudulently obtain money, to be used as a down payment, by deceiving Erie Insurance Company into permitting a loan against an insurance policy pledged in a trust; (2) to fraudulently submit loan information in order to deceive SouthStar Funding, Atlanta, Georgia, as to the creditworthiness of STANLEY H. VAN ETTEN for a real estate loan; and (3) to fraudulently submit loan information in order to deceive Fremont Investment, Tampa, Florida, as to the creditworthiness of a third party buyer for a real estate loan.

3:57PM

Defendant guilty in $10 million fake closings scam

North West Herald - October 7, 2004

ROCKFORD — Another person pleaded guilty Wednesday to federal wire-fraud charges stemming from a real-estate closing ring halted by Crystal Lake police.
Julita Uramowska, 31, of 3903 Grand Ave., Western Springs, pleaded guilty to wire fraud in connection with the $10 million scheme that involved 11 people and 19 fake real-estate closings. Uramowska could be sentenced to 30 years in prison. Her sentencing is set for Jan. 18.

Group members posed as real-estate buyers and arranged for financing to buy a property, according to the federal indictment. The group then gave the title company a fake mortgage release that indicated that other companies holding mortgages on the property had released them, according to the indictment.

The title companies then gave the group the money from the loan, which they laundered by depositing it into bank accounts of third parties, according to the indictment. Prosecutors believe three of the incidents occurred at two Crystal Lake title companies in September 2003.

The group allegedly stole $623,000 during the three transactions. Crystal Lake police caught three members of the group after a bank teller became suspicious when one of the men attempted to cash one of the six-figure checks.

Uramowska admitted in court that she worked for a mortgage brokerage and arranged lending for the fake buyers, prosecutors said. Another member of the scam ring, Zbigniew Recko, 35, 3901 N. Tripp Ave., Apt. 310, Chicago, pleaded guilty last week to one count of wire fraud.

6:14PM

ATTORNEY SENTENCED TO FEDERAL PRISON IN MORTGAGE FRAUD

US DOJ Press Release - October 6, 2004

Sally Quillian Yates, Acting United States Attorney for the Northern District of Georgia and James D. Vickery, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, announce that JERRY WAYNE FRAZIER, 46, of Lithonia, Georgia, has been sentenced for his participation in a mortgage fraud scheme by United States District Judge Orinda Evans on the charge of conspiracy to commit bank, wire and bankruptcy fraud, identity theft and money laundering. According to Yates:

FRAZIER was sentenced to 2 years, 9 months in custody followed by 3 years supervised release. FRAZIER was also ordered to pay $593,337.09 in restitution, to file tax returns for the past four years, and to surrender his law license, which had been in a suspended status.

FRAZIER pleaded guilty to this charge on June 16, 2004, for his role in a major mortgage fraud scheme which included laundering fraudulently-obtained mortgage proceeds through his law firm account. The indictment in this case charges that from in or about April, 1998, through September, 1998, FRAZIER was part of a mortgage fraud scheme that would contract or otherwise arrange for the purchase of residential and commercial properties in the Atlanta, Georgia area and elsewhere for resale at higher prices, often using the proceeds of the resale to pay for the initial purchase. Co-conspirators, commonly referred to as “straw sellers,” would falsely claim current ownership of these properties, to appear at the closings where the properties are sold to unqualified “straw borrowers,” to disburse the sale proceeds at the direction of the defendant and his coconspirators, and on some occasions thereafter to purchase with portions of the sale proceeds the same properties which were just sold. FRAZIER would file false satisfaction, cancellation and assignment of security deeds on a number of these properties, thereby eliminating the security interest of legitimate lenders, through either fraudulently transferring such interest to a coconspirator’s company or showing the properties to be free of all mortgage liens before obtaining additional mortgage loans on the properties. Several of the new mortgage loans were obtained in stolen identities, including that of a dead woman.

According to the evidence, FRAZIER would stay, delay and inhibit foreclosure on certain properties without making regular mortgage loan payments by filing bankruptcy petitions in the name of the “straw borrowers,” by listing properties with mortgage payments in default on the bankruptcy petitions of persons not on title and by transferring properties in the foreclosure process by Quit Claim Deeds to others for filing of bankruptcy petitions in their names as well. FRAZIER and his coconspirators lived in a number of these properties and resold others with delinquent loan payments then in foreclosure proceedings or with foreclosure eminent to other unqualified “straw borrowers.”

FRAZIER and his coconspirators formed and/or used shell companies, including Si’nique, Inc., Si’nique Entertainment, Inc., Si’nique Limousine Service, Inc., and Si’nique Development, LLC, as employment for unqualified straw borrowers, as names for the establishment of bank accounts to receive scheme proceeds and as “mail drops” for scheme related correspondence. FRAZIER attended mortgage loan closings for the 1698 South Deshon Road, the 107 Starfish Court and the 1891 Freemont Street properties with the straw buyers and straw sellers. During that time FRAZIER lived at 822 Mount Berry Court in Clarkston, Georgia, and at 862 Rowland Road in Stone Mountain, Georgia. According to the evidence, both of his residence properties were obtained through fraudulent mortgage loans in the names of straw borrowers.

On May 4, 1998, in preparation for the June 25, 1998, closing on a new $170,000 mortgage loan for 1698 South Deshon Road, FRAZIER assisted a co-conspirator in preparing a fraudulent Satisfaction of Deed to Secure Debt/Security Deed, dated May 4, 1998, and filed on or about May 14, 1998, in Dekalb County, Georgia, to erase the prior $175,500 security deed of lienholder EquiCredit Corporation on the South Deshon property. On June 26, 1998, FRAZIER deposited a $79,471.01 check generated from the $164,471 in scheme proceeds from the South Deshon fraudulent mortgage loan, into his “Law Office of Jerry W. Frazier” account at SunTrust Bank. The next day, FRAZIER wrote a $5,000 check drawn on his “Law Office of Jerry W. Frazier” SunTrust account for payment to the co-conspirator from the scheme proceeds of the 1698 South Deshon mortgage loan. On May 18 and August 11, 1998, FRAZIER also caused false Satisfaction of Security Deeds to be filed to fraudulently erase the prior security interests on 862 Rowland Road and 1891 Freemont Street in preparation for loan closings on those properties.

4:40PM

Florida Mortgage Broker arrested

FL Department of Financial Services, Press Release

TAMPA —A local mortgage broker was arrested Thursday on charges he bought and sold real estate using false documents. Sean P. Teelucksingh , 30, of Redington Shores , was arrested September 16 following a two-year joint investigation by the Florida Department of Financial Services, Office of Financial Regulation, and the FBI. He faces federal wire fraud charges, including conspiracy to commit mail fraud.

Teelucksingh allegedly purchased property using straw buyers and false paperwork to misrepresent property values and turn the properties over at a profit. His fraudulent deals netted over $65,000. He faces up to 5 years in prison if convicted. Florida’s Chief Financial Officer Tom Gallagher reminds Floridians they can call the department’s toll-free consumer hotline at 1-800-342-2762 to report financial fraud.

5:33PM

Freedom Mortgage claims appraiser inflated prices

Baltimore Business Journal — Sep 17, 2004

New Jersey-based Freedom Mortgage Corp., in a lawsuit, says six residential mortgage loans acquired from All Financial Services had problems that forced Freedom to buy them back. The suit, filed in U.S. District Court in Baltimore, claims Hall overstated by as much as $45,000 home values on the Baltimore City properties securing the loans.

Click here to read the Civil Complaint

Most or all of the properties were “flipping” cases, said Freedom Mortgage’s attorney, Patricia Payne of Payne and Associates Ltd. in Washington, D.C. Property flipping, a recurrent problem in Baltimore for at least a decade, involves buying homes cheaply and selling them quickly at inflated prices.

Cardinal Financial Co. of Pennsylvania sued Hall and All Financial Services , among other defendants, in 2002. Cardinal said Hall inflated appraisal values of homes securing mortgage loans Cardinal bought from All Financial Services. The case is still pending in U.S. District Court.

Last year, news reports said the Federal Bureau of Investigation was investigating All Financial Services owner William W. Dent and his companies. Meanwhile, state finance regulators issued a cease-and-desist order against Dent, All Financial Services and loan officer David Besock . The order said 35 loans brokered by All Financial raised flipping concerns, from inflated prices to quick sales.

However, an investigation did not find enough evidence to support barring All Financial Services from doing business, and the agency withdrew the cease-and-desist order, said Liz Williams, spokeswoman for the Maryland Commissioner of Financial Regulation (www.dllr.state.md.us/finance).

Hall would not comment when contacted by phone this week. All Financial Services officials could not be reached. All Financial Services’ attorney, Stanley Alpert of Baltimore, declined comment on the cases. Some of Hall’s appraisal reports did not disclose past sales of properties, including transactions where homes were bought and sold rapidly, Freedom Mortgage’s suit says. A West Lombard Street home Hall appraised at $68,000 had no kitchen, bathroom or furnace, says the suit.

Freedom Mortgage bought the loans from All Financial Services between November 2000 and April 2002, and later sold them to third-party investors, the suit says. The suit seeks compensatory damages of at least $268,000 from Hall and All Financial Services, as well as unspecified punitive damages. The suit says All Financial Services signed an agreement saying it would be responsible for any losses resulting from breaches of contract, but the company has not taken responsibili

10:20PM

Greenville attorney pleads guilty in mortgage loan scam

The State — September 17, 2004

A Greenville attorney has been sentenced to 20 months in prison after pleading guilty in a scam that cost a home lending company millions of dollars. U.S. District Court Judge G. Ross Anderson Jr. ordered Mark Douglas Lattimore to pay more than $660,000 in restitution.

Lattimore, once managing partner of Greenville-based Forquer, Green and Lattimore, has also had his license to practice law suspended, Assistant U.S. attorney Kevin McDonald said. Lattimore pleaded guilty in June to conspiracy to commit mail fraud.

Prosecutors say Lattimore closed on 88 inflated home loans after the fraudulent mortgages were arranged by Anderson mortgage brokers at Service First Mortgage and the Kelly Mortgage Group. Both companies have been shut down, and more than a dozen of their brokers and appraisers were convicted of conspiracy to commit mail fraud earlier this year.

Investigators believe the scheme involved more than 120 properties in Upstate South Carolina. The properties were being financed through Ohio-based National City Mortgage Co. In June, the company has reported losses of more than $3 million.

6:58PM

West County couple indicted for $2 million mortgage fraud scheme

St Louis Business Journal - September 14, 2004

A west St. Louis County couple has been indicted on fraud, money laundering and tax evasion charges in connection with a $2 million mortgage fraud scheme, said U.S. Attorney James Martin Tuesday. Kimberly and Christopher Williams, of Town & Country, were indicted by a federal grand jury on multiple felony charges, including bank and wire fraud. Kimberly Williams was also charged with money laundering, tax evasion, and a forfeiture count, which would require her to turn over the more than $2.2 million in money and property obtained with proceeds from the scheme.

Martin said from June 1999 to December 2000, the Williamses purchased residential properties in the area for the true value, and arranged for the properties to be sold to another person. They allegedly obtained a mortgage to fund the sale at a significantly higher price than the true value, then submitted false loan applications to justify the amount of the mortgage. Kimberly Williams is also charged with laundering funds received from the activities and filing false income tax returns .

9:46PM

Amerifunding arraigned in US District Court

FBI Press Release - Aug 25,2004,

GERALD SMALL, ET AL, dba AMERIFUNDING, Gerald Small, Kelli Burkhalter-Small, Charles Winnett, Chad Heinrich, and Robert Sigg, were arraigned in U.S. District Court, District of Colorado. These subjects were charged with bank fraud stemming from their alleged roles in a scheme to obtain loans employing stolen identities, and then utilizing these loan proceeds to purchase substandard houses which were used to perpetuate this scheme. Losses attributable to this alleged scheme exceed $19 million.