White Collar Crime News

Three Defendants Charged in Multi-Million-Dollar Mortgage Fraud Scheme February 26, 2010

These mortgage fraud cases just keep coming and like many of these cases, the allegations stem from incidents that happened years ago.  While a bulk of the mortgage fraud took place during the “housing boom” a few years ago, it takes time for these cases to be investigated.  In a few years, I’m sure we’ll see the flip side of this which is foreclosure fraud.  The latest case of mortgage fraud is:

the arrests of SHAHEID BILAL, RHONDA PAYNE, and RICHARD BRITT on charges stemming from a subprime mortgage fraud scheme involving $3 million worth of mortgages on residential properties in and around Orange and East Orange, New Jersey.

According to the five-count Indictment filed in Manhattan federal court:

From 2005 through 2007, the defendants targeted residential properties in Orange and East Orange, New Jersey. To purchase the properties, the three defendants submitted mortgage loan applications, in the name of straw purchasers, that contained false information regarding the applicant’s creditworthiness and intention to live in the residence. They recruited such straw purchasers by, among other things, paying them thousands of dollars in fees. The defendants told several of these straw purchasers that they would not have to pay the mortgages because the defendants would make payments for several months, and/or that the defendants would make money to pay the mortgages by renting out the properties. They distributed the proceeds from the fraudulently obtained home mortgage loans among themselves and their co-conspirators for their personal gain.  It is assumed that  these co-conspirators will not  be charged or will have deals worked out.

They further profited by renting out the fraudulently mortgaged properties to tenants while failing to make mortgage payments on behalf of the straw purchasers. Certain affected straw purchasers have gone into default on their mortgages, and mortgage lenders have foreclosed on certain properties.  I have several cases where I represent either an identity theft victim or a straw purchaser.  Sometimes its tough to figure out what role your client really has.

BILAL of Lawrenceville, Georgia, is alleged to have supervised and coordinated the recruitment of straw purchasers and the preparation of fraudulent loan applications and other documents for submission to the lenders.

PAYNE of Queens, New York, allegedly recruited straw purchasers to participate in the fraudulent scheme and assisted in the preparation of fraudulent paperwork for submission to the lenders.

BRITT of McDonough, Georgia, allegedly assisted in the preparation of fraudulent paperwork for submission to the lenders.