Now you can see why our Real Estate industry is in turmoil.
Many mortgage frauds all over the country. The only consolation, the crooks are getting prosecuted but too late for many of the banks and the mortgage companies who lost so much money already. This is bad for the lending industry.
This is only one of the many, many stories on Originator Times.
Broker Arrested for Scamming at Least 15 Million
Tuesday, November 20, 2007 -
By Staff Writer, Originator Times
STUART, FL – Matthew Bevan Cox was sentenced this week to 26 years and four months in jail and hit with $6 million in restitution for mortgage fraud. Cox was arrested in his Nashville, Tennessee home in November of 2006 and plead guilty to charges in April 2007. Cox had been on the run from police and the FBI after arrest warrants were issued in August of 2004 for conspiracy, stolen identification, mail and wire fraud, money laundering, and social security number fraud. At the time arrest warrants were issued, Cox was already on the run from Florida police for violating his probation for a prior incident in that state.
Cox worked as a mortgage broker and is suspected of running hundreds of mortgage-related scams in at least five states including Georgia, Florida, North Carolina, South Carolina, and Alabama with an associate that he met on Match.com. Reports indicate Cox got away with at least $15 million by defrauding mortgage companies and duping desperate sellers. The pair acted as though Cox was the client and his partner, Rebecca Marie Hauck, was a real estate agent. The duo scoped out MLS ads and pounced on those offering partial owner financing, only to leave the mortgage unpaid and sending the property into foreclosure.
Cox, who has not used his real name since 2003, used the names Maxwell Price, David Richard Freeman, Gerald Scott Cugno, Michael Shawn Shanahan, Gary Lee Sullivan, Michael John Eckert, Michael White, Kevin White, David White, and James Redd. At the time of his arrest, he was operating the Nashville Restoration Project.
Fraud Lands Two Brokers and Insider in Prison
Wednesday, August 22, 2007 - By Staff Writer, Originator Times
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NEWNAN, GA - Joseph White of Southern Lenders Mortgage and Michael Jones of Infinity Mortgage have both been convicted and sentenced for their participation in an $11 million fraud perpetrated against nBank, with the participation of a then nBank vice president, Ronald Walton.
White, Jones, and Walton operated an elaborate scheme whereby they diverted funds from a broker line of credit issued to Southern Lenders mortgage and Infinity Mortgage by nBank.
According to court documents, once White and Jones closed on transactions with their nBank credit lines, they then sold the same loans to other investors and then diverted the proceeds to pay personal and business expenses.
White diverted $3,700,000 in proceeds from 34 loans and Jones $1,835,000 from 23 loans.
The court found that Walton, then a senior vice president at nBank, managed the division of nBank responsible for broker lines of credit to mortgage brokers. The fraud perpetrated on nBank by White, Jones, and several additional brokers was carried out with the cooperation of Walton, who received commissions from nBank based upon the number of loans nBank funded for brokers. The fraud against nBank was facilitated by Walton knowingly assisting the brokers in circumventing the nBank security controls that were specifically in place to prevent such frauds.
“This case involved the defrauding of a federally insured bank by various mortgage brokers, aided by an insider who was an officer at the bank,” said United States Attorney David E. Nahmias. “The integrity of the banking system and soundness of the lending industry is of importance to all citizens.”
Walton was sentenced to serve over 8 years in federal prison, White will serve over 4 years, and Jones will serve over 3 years for their participation in the fraud
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