Brooklyn-Based Mortgage Fraud Scheme Busted
April 26, 2006 — Eight people, including two lawyers, have been indicted in a residential mortgage-fraud scheme that netted them tens of millions of dollars, state Attorney General Eliot Spitzer said yesterday. Spitzer said the defendants used dozens of straw buyers – people who claimed to be buying property and offered false job, income and…
April 26, 2006 — Eight people, including two lawyers, have been indicted in a residential mortgage-fraud scheme that netted them tens of millions of dollars, state Attorney General Eliot Spitzer said yesterday. Spitzer said the defendants used dozens of straw buyers – people who claimed to be buying property and offered false job, income and other information to get mortgages – in hundreds of bank transactions worth a total of more than $200 million. The defendants would inflate the cost of a property they wanted to buy by $100,000 or more, Spitzer said. They would then give the lending bank real estate appraisals that misrepresented the physical condition and the market value of the property and the identities of the people who prepared the reports, he said. To illustrate the scheme, Spitzer cited a $310,000 house purchase in January 2004 for which the defendants obtained a $450,000 mortgage. He said they paid the owner the $310,000, paid off another $20,000, some of it to the straw buyer, and pocketed $120,000. When they defaulted on the mortgage, the bank suffered the loss, he said. Spitzer said the defrauded banks included small, large, local and national institutions. “Virtually all of the major names are involved at one point or another,” he said.
$200M House Louses [NY Post]
Update from Spitzer [Brownstoner]
You do have a point there about the names. The paper always finds room to print the names of rape victims, underaged victims and suspects, as well as the name and picture of countless other people picked up as suspects, with far less evidence against them than the AG has on these guys. If they are can print everyone else’s names, then they can find room to print theirs too.
here is the earlier story from the archives
http://brownstoner.com/brownstoner/archives/2006/01/one_womanizer_f.html
Eryximachus – the names of the indicted are listed on the Attorney general’s press release. Probably pushed the word count of the story to list all 8 of them in the paper.
The Times has nothing on this, but I did find this from the AG’s site:
http://www.oag.state.ny.us/press/2006/apr/apr25a_06.html
Why haven’t the names been printed?
Yeah, but the interest rates would go up anyway. Screw the bastards.
All of you people finding it attractive that the banks got scammed are idiots. Do you think the bank’s shareholders pay for that? It’s you fools that pay for it the next time you go to a bank and the interest rate is a 0.50% higher to compensate for the risk and closing costs increase because the appraiser will now need to be one of a select few firms that the bank trusts……..
As seductive as you might imagine it to be to scam millions from the banks, there is nothing cool, heroic or charming about this ring. The house across the street from me was involved in this scam, and I have a few guesses about the ongoing investigation. For one thing the house across the street from me was a lovely old brownstone in need of a good renovation, but full of details. In January there was a suspicious fire which engulfed the house and entirely gutted the building, endangering residents, neighbors and firefighters. This led to the investigation that linked it to this scam ring. From what I have heard, nothing has been or could be proved about who set the fire, but apparently it was not the only property involved in this scam that went up in flames.
Outside of that fact that having a burnt-out shell on the block is not great for the neighborhood, in general the effects for the rest of us brooklyn home owners are likely to include higher insurance rates and more difficulty getting loans approved.
“Louses” does not begin to cover it.
Mine too! To hell with ’em!
I have to admit, the thought of major banks being scammed brought a smile to my face.