FBI Cracks Down On Mortgage Fraud

This post was written by jd on February 16, 2010
Posted Under: Real Estate

By John J. O’Dell

The FBI is spending a lot of time investigating real estate fraud cases. In the hay day of the housing boom, with loose standards and banks wanting to make as many loans as possible, supposedly sophisticated people got greedy and tried to get rich quick. Now the boom is coming down on these people as in this case successfully brought to trial in San Francisco by the FBI.

According to Thaindian.com

“A mortgage broker and real estate developer on Friday were charged in San Francisco, California with conspiracy to commit a $19.6 million bank fraud, fraud, and money laundering, prosecutors said.
According to the indictment, Michael Ohayon, 41, and David Papera, 47, allegedly recruited thirteen straw buyers who used their good credit scores to nab $19.6 million in fraudulent mortgage loans from Washington Mutual Bank, with no intention of making either down payments or mortgage payments on the properties.

The indictment further alleges that Ohayon, with Papera’s knowledge, told the straw buyers that an entity controlled by Ohayon and Papera would use the loan proceeds to make the down payments and mortgage payments. Ohayon and Papera created and submitted to Washington Mutual Bank loan applications with numerous misstatements as to the straw buyers’ income and assets.
The maximum penalty for each count of conspiracy to commit bank fraud and bank fraud is 30 years in prison, a $1,000,000.00 fine, and restitution. The maximum penalty for each count of money laundering is 10 years in prison, a $250,000 fine, and restitution.”

I seem to read a case like this almost every day. It’ll be interesting to see when this if finally over. What do you think?

John J. O’Dell
Real Estate Broker
General Contractor
Civil Engineer
Here to help you with buying or selling real estate
Contact me!

Comments are closed.