Protecting our Communities from Fraud
Click the following link for a full brochure about this initiative: Fraud Prevention Brochure (PDF)
Recent Mortgage Fraud Cases:
Ten Defendants were charged with 43 counts of conspiracy, wire fraud, false statements, false representation of Social Security numbers and aggravated identity theft. Between June 2001 and May 2012, these ten individuals allegedly conspired to obtain mortgage loans with false information, used the illegally obtain mortgage loans to refinance and obtain “cash back” before defaulting on the loans and sell fraudulent properties to other members within the group at drastically reduced prices through short sales.
(CR-12-01122-PHX-ROS; Release #2012-161)
Paige Kinney played a leadership role in a $40 million mortgage fraud scheme that targeted Countrywide Home Loans and other lenders. From Jan. 2005 to Dec. 2007, Kinney and others conspired to commit mortgage fraud by using unqualified straw buyers to purchase properties and submit fraudulent mortgage loan applications and altered documents to misrepresent the straw buyers’ assets, income, and employment status, liabilities and other debts, sources of earnest money and down payments, and their intent to make the property a primary residence. Once the funds were obtained from the lenders, the “cash backs” were directed to bank accounts that Kinney controlled. In total, Kinney caused lending institutions to issue $38,745,215.00 in fraudulent loans. Out of those loan proceeds, $8,754,485.17 was directed as “cash back” to bank accounts controlled by Kinney and other conspirators. Kinny was sentenced to 15 years in prison and ordered to pay $22,000,000 in restitiution. (CR-10-796-PHX-NVW, CR-11-491-PHX-NVW; Release #2012-058)
Eitan Maximov played a leadership role in the underlying conspiracy, which involved at least nine residential properties in the Scottsdale area. The objective of the conspiracy was to recruit unqualified borrowers as straw buyers, submit fraudulent loan applications on their behalf and on behalf of Maximov, obtain mortgage loans in excess of the selling price of the property and then take the excess amount of the loans out through escrow in what is known as a “cash back” scheme. The conspiracy resulted in approximately $5,000,000 in loans obtained by fraud and an actual and intended loss to lending institutions of nearly $6,500,000. Maximov was sentenced to 97 months in prison. (CR-10-822-PHX-DGC; Release #2012-096)
Thomas G. Alexander concocted a scheme to defraud Mesa Bank by creating fraudulent documents for unqualified borrowers. Alexander also directed many of the borrowers to acquire loans to purchase lots from Sea Rock, L.L.C., a company that he owned. In total, Alexander’s mortgage fraud scheme induced Mesa Bank to issue over $40 million in loans, and caused tens of millions of dollars in losses to the bank. Alexander was prosecuted under the Operation Stolen Dreams initiative, which was initiated in June 2010. Operation Stolen Dreams targeted mortgage fraudsters throughout the country and was the largest collective enforcement effort ever brought to bear in confronting mortgage fraud. Alexander was sentenced to ten years in prison and ordered to pay $5,463,769.00 in restitution. (CR-10-797-PHX-ROS; Release #2012-219
| Mortgage Fraud Task Force
Operation Stolen Dreams
The United States Attorney's Office joined members of the Arizona Financial Fraud Task Force to announce multiple indictments charging 38 people – among them loan officers, escrow officers, real estate appraisers and agents, and “straw buyers” – in various mortgage fraud schemes, including “cash back” and loan origination scams.
In Arizona since the beginning of March 2010, Operation Stolen Dreams has resulted in 51 defendants indicted, convicted or sentenced.
Read more about Operation Stolen Dreams and the Arizona Financial Fraud Task Force here.
Operation Cash Back
Operation Cash Back represents the efforts of the U.S. Attorney’s Office, FBI, Internal Revenue Service-Criminal Investigation Division, U.S. Immigration and Customs Enforcement, Department of Housing and Urban Development Office of the Inspector General, U.S. Marshals Service, U.S. Postal Inspection Service, U.S. Secret Service, the FDIC-OIG, Arizona Department of Financial Institutions, Arizona Attorney General's Office, county attorneys and local police departments.
In June 2008, the first 36 defendants were charged following a multi-agency investigation into mortgage fraud schemes in Arizona. These defendants included mortgage loan officers, straw buyers, real estate investors, real estate agents, and escrow officers. In March of 2010, the United States Attorney’s obtained a 17-year prison sentence against Mario Bernadel for mortgage fraud.
Read more about Operation Cash Back here.
Fraud Prevention Resources
Federal Bureau of Investigation | 1-800-CALLFBI (225-5324) | phoenix.FBI.gov
Department of Housing and Urban Development | 1-800-347-3735 | www.hud.gov
Prevent Loan Scams | 1-888-995-HOPE | www.preventloanscams.org
Federal Trade Commission | 877-FTC-HELP | www.ftccomplaintassistant.gov