Forty-One Defendants Charged In Five New Area Mortgage Fraud Cases; Two Schemes Involve Expensive Condos and Suburban Homes
CHICAGO – Forty-one defendants are facing federal charges relating to various mortgage fraud schemes in five separate cases made public today by federal law enforcement officials. In some of the schemes, the defendants were charged with falsely inflating the values of dilapidated homes in urban areas. Other schemes feature a twist where defendants were charged with deals involving million-dollar condominiums in a Chicago high-rise and sprawling homes in affluent suburbs. A total of 37 individuals and four businesses, including a title company that closed on allegedly fraudulent loans, are facing new federal charges relating to mortgage fraud in five separate cases in Chicago, federal law enforcement officials announced today. The defendants include a vice president of the title company, mortgage brokers, loan officers, real estate investors, appraisers and an attorney. Together the cases involve more than $48 million in fraudulently-obtained mortgages issued by various lenders and secured by scores of residential properties in the Chicago area, including two in the suburbs of Wheaton and Glenview. As a result, the various lending companies suffered millions of dollars in losses after the loans went into default and the properties were foreclosed upon.
Among the cases announced today are:
19 defendants, including LaSalle Title Company and three other businesses, who allegedly schemed to fraudulently obtain loans totaling more than $10 million on 70 residential properties in Chicago, including many blighted homes on the city's south side, resulting in losses totaling approximately $5.8 million to various mortgage lenders; 10 defendants accused of scheming to fraudulently obtain loans totaling more than $17.2 million on various multi-million-dollar condominiums and penthouses at 33 West Ontario St., known as Millennium Centre; six defendants accused of fraud and using stolen or fictitious identities to fraudulently obtain approximately $3 million in home loans from various lenders by submitting false applications for loans; and the chief executive of a Burr Ridge mortgage lender who allegedly defrauded GMAC Bank out of approximately $15 million in funding more than 450 fictitious residential loans.
"Mortgage fraud is a serious issue that affects not just financial institutions but ordinary citizens who may have invested in such financial institutions or who hope to purchase, sell or refinance a home by honestly setting forth their finances. Today's charges also show that the mortgage fraud issue affects suburbs as well as cities," said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois
Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Barry McLaughlin, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago.
Just a year ago, 67 defendants were charged in a dozen mortgage fraud-related cases in Chicago, and another two dozen defendants were charged in multiple cases this past March stemming from an undercover investigation in which law enforcement agents posed as straw buyers of houses. In addition, scores of other defendants have been prosecuted in dozens of routine cases in the last couple of years, signifying the high priority that federal law enforcement officials give mortgage fraud in an effort to deter others from engaging in crimes relating to residential and commercial real estate.
All of the charges announced today are felonies and carry various maximum penalties, including 30 years in prison and a $1 million fine on each count of mail and wire fraud if a financial institution was affected, or 20 years in prison and $250,000 fine if there was no financial institution impact. As an alternative, the court may impose a maximum fine totaling twice the gain to any defendant or twice the loss to any victim, whichever is greater. If convicted, the four business entities charged each face a maximum penalty of five years probation and a $500,000 fine. If convicted, the Court would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.
The public is reminded that indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.