June 20th, 2008
Dozens Charged Locally In National Mortgage Crackdown
The 67 area defendants, charged in a dozen different cases, are among more than 400 snagged across the country in Operation Malicious Mortgage, “a nationwide initiative against fraudulent home lending schemes,” according to a press release from the U.S. Attorney’s office.
Prosecutors allege that more than $170 million in fraudulently-obtained home mortgages were issued by various lenders, then secured by several hundred residential properties in Chicago and the suburbs, as well as Nevada and California.
Prosecutors estimate lending companies lost more than $40 million after the loans went into default and properties were foreclosed on.
An attorney accused of representing purchasers at several closings was also charged in the scheme. The release said he knew “the closing and mortgage documents contained false information material to the lending decisions.”
Brown is also charged in a second, similar scheme with 12 different co-defendants. This alleged fraud involved homes in Nevada and California. The loss to lenders, the release claims, was about $5.3 million.
Noting that banks and lending companies are tightening lending practices because of fraudulent mortgages, Fitzgerald said, “These burdens are borne by anyone hoping to purchase or sell a home and the shareholders of institutions financing those transactions.”
All the charges are felonies and carry various maximum penalties, including 20 years in prison and a $250,000 fine on each count of mail and wire fraud, and 30 years in prison and a $1 million fine on each count of bank fraud.
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