-Caveat Lector-
Tip of the iceberg all across America ...
U.S. agents crack $29-mln mortgage fraud in Florida
MIAMI (Reuters) - A Florida fraud ring that included a mortgage lender, a
loan officer and a real estate appraiser secured more than $29 million in
fraudulent mortgage loans by duping banks and lenders, U.S. authorities said
Thursday.
The suspects misrepresented the value of properties they were buying and used
collusive ``straw buyers'' to flip the real estate at inflated prices,
according to a 45-count federal indictment stemming from a 19-month
investigation code-named ''Operation Flipper.''
Nine suspects were charged with violations of U.S. wire fraud laws,
conspiracy, making false statements to banks and money laundering. Some of
the charges carry maximum sentences of 30 years in prison and fines up to $1
million.
The group's alleged ringleader, James Christenson, 33, of Fort Lauderdale,
contracted to buy more than 200 properties and assigned the properties to
another suspect, Howard Kratenstein, 36, of Fort Lauderdale, before closing,
the indictment alleged.
The plotters misrepresented to lenders the risks involved in the properties,
officials said. Some of them were boarded-up buildings or multifamily
apartments that would be subdivided without the approval of local
authorities.
Christenson had a property appraiser value the real estate at inflated prices
and forwarded the appraisals to First Financial of Boston, Inc., where
suspect Stanley Lerner, 67, of Fort Lauderdale, a mortgage loan officer,
prepared fraudulent credit files for straw buyers, the indictment alleged.
The properties would be ``flipped'' to the collusive straw buyers who were
provided with fake tax returns, income statements, pay stubs, bank statements
and other background information.
Authorities said the fraud scheme stretched from Homestead to Lake Placid, an
area including much of south Florida. Many of the properties are now in
foreclosure, raising concern about the scheme's impact on the mortgage
industry.
``Mortgage fraud has become so pervasive that regulators and prosecutors are
now turning the spotlight on what we believe is a systematic mortgage lending
problem,'' said Brenda Liberti, director of the Florida Department of Banking
and Finance.
``We are serious about curbing fraud because left unchecked this climate will
jeopardize the existence of affordable mortgages in South Florida,'' she
said.
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