Finally, more is being done to track down mortgage insiders responsible for defrauding the public of millions. The Justice Department just unveiled the perfectly-named Operation Malicious Mortgage, an effort which targets perpetrators of crimes as wide-ranging as bankruptcy fraud, foreclosure rescue
scams, identity theft, and falsified loan applications and real
estate appraisals. Here in Illinois, authorities arrested 67.
In Chicago, authorities said the centerpiece of their investigation involved one of the largest mortgage fraud schemes ever prosecuted in federal court here.
The ring run by Bobbie L. Brown Jr. fraudulently obtained loans on some 183 homes in Illinois, Nevada and California, authorities said, and lenders lost more than $24 million.
In several instances, Brown allegedly bought homes using stolen Social Security numbers. In other cases, Brown and his co-defendants used straw purchasers to buy homes, gaining the straw purchasers' cooperation with promises of "no money down" and "cash back at closing," according to the charges.
Brown and others allegedly told the straw purchasers that they did not
have to make any mortgage payments and that the homes would be rented
out. Instead, federal authorities said, Brown, several co-defendants
and their friends and relatives moved into the homes and didn't make
payments.
"These fraudulent loan packages overstate income, they overstate
assets," said Gary Shapiro, first assistant U.S. attorney in Chicago. "
They had phony tax returns in them prepared by their cooperating tax
accountant. The defendants supplied the down payments for these loans
and falsely verified in the loan applications that the borrowers who
were allegedly purchasing these homes were making the down payments."
God knows there are more than 67 of these scam artists out there, so let's hope we see more of this accountability.