Custom Search


Monday, June 30, 2008

U.S. attorney charges 28 people in Metro Detroit with mortgage fraud

Paul Egan and Mike Wilkinson / The Detroit News
DETROIT -- U.S. Attorney Stephen Murphy on Thursday described mortgage fraud as a widespread economic scourge in Michigan and said his office has launched a crackdown with the assistance of the FBI and other agencies.
Murphy said at a news conference that since March, his office has charged or convicted 28 people with a variety of fraud and money laundering charges in 15 separate cases related to alleged mortgage fraud with losses exceeding $50 million.
The local crackdown -- in which 24 people have been charged since March and four others have pleaded guilty -- is part of a broader national initiative. In Washington, the U.S. Justice Department and the FBI on Thursday announced "a national takedown of mortgage fraud schemes," saying 404 defendants around the country were charged in 144 cases since March 1.
Michigan ranks third in the nation for mortgage fraud, according to a recent FBI report.
The Detroit News reported in November that widespread mortgage fraud in the region had cost residents and lenders hundreds of millions of dollars and forced thousands of homeowners into foreclosure, prompting calls for more enforcement.
"Mortgage fraud tears at the core of our households, our economy and the American dream," said Toni Chrabot, the agent in charge of the FBI's Oakland County office.
The cases detailed in Detroit run the gamut from allegations of inflated appraisals, use of false income documents and false identities to obtain mortgages, and use of false deeds, liens and other false real estate records to obtain funds. Investigators and prosecutors say it's difficult to keep up with the volume of mortgage fraud complaints they receive, partly because the cases are often complex and time-consuming to unravel.
"This is not even the tip of the iceberg that sank the Titanic," said Warren real estate agent Ralph Roberts, who has written books about mortgage fraud and gives lectures around the country on how to detect and avoid it. "I believe that mortgage fraud has trashed the economy of the whole country."
Victims include not only lenders and title insurance companies but homeowners such as Patti and Marc Cammarata.
They say in 2002 and 2003, more than a dozen homes in their affluent northern Shelby Township neighborhood were purchased for well over the asking price by people who often didn't keep up their property and were rarely seen. Prices, which ranged from $500,000 to $600,000, spiked to $700,000 and up.
Most are now in foreclosure; the unfinished landscaping and curtainless windows remain. "There was a lack of neighborhood or community because you never knew who was living here," Patti Cammarata said.
According to the FBI, many fraud cases start with the purchase of a home, followed by a faulty appraisal that pushes the home's value well-above the purchase price. The criminal then gets a "straw buyer" -- someone with good credit to apply for a loan to buy the home based on the higher appraisal, earning a profit for the mastermind of the crime. Typically, the home is abandoned and falls into foreclosure, costing the lender and the community.
Murphy denounced the criminals but called on the mortgage industry to "clean up its act" and require more proof that borrowers can pay off loans.
"If there is money and an ability to get it, criminals will take advantage of it," Murphy said.
"We've prosecuted as many cases as we can. We have a lot of work to do."
One of those who bought near the Cammaratas was Irving Sims, 44, who bought four homes for a total of nearly $2.5 million. All the mortgages went into default. Murphy said Sims recently pleaded guilty to getting a $466,000 loan using a fake tax return that falsely showed he earned nearly $250,000 a year.
"I'm glad they finally indicted someone," said Skip Maccarone, the Shelby Township supervisor. He made Sims the focus of a report he gave to the FBI on potential mortgage fraud about three years ago. The township had been monitoring the sales for several years and gave the FBI a list of suspicious sales.
Maccarone said he had been wondering how long it would take to make Sims and others pay for the fraud they could see for years.
"At least there's some movement," he said. "Some light is better than none."
The individuals Murphy named as having been charged since March with federal crimes related to mortgage fraud are: Nicole Malane, 30, of Birmingham; Kurt Warren Heintz, 37, of Grand Blanc; James Jeffrey Fish, 40, of Howell; Aubry Terbrack, 65, of Troy; Denise Money, 52, of Ferndale; Julieta Galvez Flores, 34, of Farmington Hills; Roberto Carmen Lemos Jr., 35, of Detroit; Phillip Blevins, 56, of Bloomfield Hills; John Husar, 39, of Sterling Heights; Cynthia Crump, 53, of Bloomfield Hills; Tanya Davis, 49, of Southfield; Arnold Jankowski, 61, of Warren; Shannon Ferguson, 36, of Canton Township; Dennis Tamburo, 39, of Washington Township; Mario Lalios, 30, of Shelby Township; Gregory Patrick Davis, 30, of Detroit, who ran Interactive Property Services and Efficient Mortgage in Southfield; Melissa N. Harris, 24, whose city of residence was not available; Ali Akil, 40, of Dearborn; John Marras, 41, of Plymouth; Mark Ward, 33, of Howell; Nishon Johnson, 37, of Detroit; Jonathone J. Johnson, 32, of Detroit; Wanda Henley, 54, of Detroit; and Irving Sims, 44, of Shelby Township, who has pleaded guilty to providing false income information to a lender.
Complete identifying information was not immediately available on the other people named by Murphy on Thursday.
The local cases are not related to the arrest Thursday morning of two former Bear Stearns officials in New York and New Jersey. In New York, the FBI announced the arrests of Matthew Tannin and Ralph Cioffi -- ex-managers of Bear Stearns hedge funds -- and said they will face criminal charges related to the collapse of the subprime mortgage market.

No comments: