$40 Million Dollar Mortgage Fraud Scheme

As reported in the Miami Herald by Toluse Olorunnipa, “Twenty South Floridians have been charged with participating in a $40 million mortgage fraud scheme, according to an indictment released Thursday by U.S. District Attorney Wifredo Ferrer.” The scheme allegedly included individuals from nearly every level of the real estate industry — a bank professional, mortgage brokers, a title agent, a home appraiser and several sales agents.
According to the article the indictment charged two individuals for “fraudulently obtaining home equity lines of credit and mortgage loans for homes and condos throughout Miami-Dade County. A Regions Bank manager helped approve the loans.” Many of these transactions involved misrepresenting the essential documents used to determine eligibility for a mortgage loan. Documents evidencing borrowers’ income statements, employment status, personal assets and debts were being falsified by the co-conspirators.

“Even by South Florida fraud standards, today’s prosecution is shocking,” Ferrer said in a statement released by his office. These schemes involved many individuals in the field of real estate and financial institutions. Many of the loans procured in this manner led to the burst of the real estate market, as individuals who really did not qualify for the loan amount being borrowed were granted large loans without proper due diligence from any party involved in the transactions. The banks looked the other way as their loan officers pushed through fraudulent documentation.

The 20 defendants are charged with conspiracy to commit bank fraud, bank fraud and other mortgage fraud charges. If convicted, they face maximum sentences of 30 years in prison on each count.