Seventeen people have been indicted in what is being called an upscale mortgage fraud ring that included lenders from Missouri, Kansas and Nebraska to California.
According to The Kansas City Star, those indicted by a federal grand jury conspired as part of a $12.6 million scheme that targeted homes in upscale neighborhoods.
The scheme paid kickbacks to homebuyers through shell companies those indicted had created. These kickbacks totaled more than $2.3 million. Also taking in money on this scheme were real estate agents and home builders.
Victims of this scheme and the hundreds, maybe thousands of such schemes operating nationwide – multiple operations running in cities across America – remain the mortgage companies who are duped into believing the information used to obtain the mortgage was true, and neighbors of the homes involved in the fraud.
Key figures in this ring, according to The Star, include real estate agent Angela R. Clark, 40, and former mortgage loan officers Cynthia D. Jordan, 41, and Stefan M. Guerra, 30.
This mortgage fraud scheme ran from June 2005 until May of last year. The buyers in the scheme got loans by providing false information to lenders. They used this loan money to buy 25 homes in a sub-division of a housing development at grossly inflated prices.
A California person involved in the scheme allegedly used fake Social Security numbers to obtain loans. The homeowners would then receive kickbacks on each house, some equaling $125,000.
According to the indictment, defendants secured a $603,000 mortgage in July 2006 for the purchase of a home in Belmont Farms at 509 Southeast Snaffle Bit Court. After subtracting his building costs and profits from the mortgage payout, Emerick allegedly paid a $114,000 kickback to a shell company controlled by Howard, the purchaser, and $30,000 in real estate fees.
The homes involved in the scheme are in foreclosure and have brought down the value of homes in this newly constructed neighborhood.