4 Charged In 'Sophisticated' Mortgage Fraud Scheme
MINNEAPOLIS (WCCO/AP) -- Four people from Minnesota and Wisconsin are charged in what authorities are calling a "sophisticated mortgage fraud scheme" involving fake documents -- including phony divorce decrees and the forged signature of a Minnesota judge.
The four people facing both criminal and civil charges are James and Wendy Ober, of Hudson, Wis., owners of Mortgage Planners, Inc.; Raul Pliego, of Farmington, and Alejandro Sanchez, of Bloomington. All are charged with racketeering.
County Attorney Mike Freeman calls this the 'new wave' of mortgage fraud following the housing crisis.
Authorities say the alleged fraudsters raked in millions of dollars by using straw buyers to secure mortgages insured by the Federal Housing Administration.
Freeman said it's not just what the alleged fraudsters did but how they did it that makes this scam sophisticated and complex.
Investigators say they bought up 65 properties in the Twin Cities from foreclosure sales.
Freeman said people behind the scheme went to elaborate lengths to get these loans -- including creating fake college transcripts, job histories, even divorce decrees.
"We will bring these conspirators to justice," said Mike Rothman, Commissioner of Minnesota Department of Commerce. "We also brought charges today to civilly prosecute the licenses of these individuals so they will no longer be able to continue to any real estate transactions in the state of Minnesota or use their companies again in the future."
NewsRadio 830 WCCO's Edgar Linares Reports
The loans, totaling tens of millions of dollars, require extensive documentation. Authorities say the defendants also came up with fake companies and bogus bank statements to qualify for the loans. They then created a second, fake mortgage and collected kickbacks when the property was sold.
"The signature here is a judge and there is a Judge Robert King in Dakota County. That's the forgery. This is the judge's real signature," Freeman said, holding one of the documents. "He has told us he never saw this document, he never signed it. That's not a perfect forgery but it's close. That's an indication of how sophisticated these people were."
Freeman said these crimes occurred between 2009 and 2010.
If convicted on criminal charges, they could be fined up to a million dollars each and spend up to 20 years in prison.
The homes involved in the scheme are now in foreclosure again.
"Unfortunately whenever there's a lot of money to be made some folks don't want to make it honestly," Freeman said.
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