Sept. 24, 2010
TWO MEN PLEAD GUILTY IN $3 MILLION MORTGAGE FRAUD
KANSAS CITY, KAN. – Eric M. Rabicoff, 27, Hutchinson, Kan., and Richard Ngek, 26, Lee’s Summit, Mo, have pleaded guilty to taking part in a $3 million mortgage fraud scheme, U.S. Attorney Barry Grissom said today.
Rabicoff pleaded guilty to one count of money laundering. Ngek pleaded guilty to one count of conspiracy to commit money laundering and wire fraud.
In his plea, Rabicoff admitted that he was the leader of a scheme to defraud mortgage lenders that resulted in more than $3 million in loans to straw buyers who were not qualified to receive them. The conspirators arranged for straw buyers to purchase homes that were for sale by owners. They obtained financing for the deals by submitting false loan applications to lenders. They provided false information including employment, income and rent history in order for the straw buyers to obtain loans. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing.
Rabicoff directed conspirators in recruiting straw buyers and assembling fraudulent loan files. He and conspirators under his direction submitted false invoices to title companies for purported improvements made to the properties. The invoices were submitted in the name of MSM Enterprises, a company Rabicoff controlled. The title companies paid MSM Enterprises from the loan proceeds at closing, not knowing that the company made no actual improvements to the properties.
On April 5, 2006, Rabicoff committed the crime of money laundering by transferring $50,000 in money criminally derived from the conspiracy from his MSM account to another conspirator’s account held in the name of Cappo Investment Agency.
In his plea, Ngek admitted he acted as a straw buyer on a house located in the 400 block of Seaside Sparrow in Lee’s Summit, Mo. In the loan application, he provided the lender with false information on his employment and income. As a result, the lender transferred more than $424,000 from an account in New Jersey. Ngek received $5,000 for his role in the transaction.
Sentencing is set for Dec. 27, 2010.
Grissom commended the Internal Revenue Service, Assistant U.S. Attorney Chris Oakley, Assistant U.S. Attorney Christine Kenney and Assistant U.S. Attorney Richard Hathaway for their work on the case.