This fraud scheme was from the sale of land in various counties in North Florida and in Georgia by First Loan Solution, a company that advertised the sale of the land to the Haitian community in Miami Dade County, Florida. They used First Loan Solution's website and one of the fraudsters had a radio program on Haitian radio as well as distributed flyers. They would organize bus trips for prospective buyers to view the land in North Florida. During these trips, the fraudsters represented that First Loan Solution owned the land, as well as in individual meetings with the buyers.
It is reported that 1,000 victim buyers fell prey to this scheme with losses to the victims of $10,600,000. The fraudsters conducted hundreds of closings allegedly transferring the land; the victims were left without any land and without a refund of any of their money.
These prospective buyers entered into land sale contracts with First Loan Solution to purchase the land in one-acre increments. The land sale contract required buyers to make down-payment deposits falsely assured that First Loan Solution would maintain the deposits in escrow accounts. The fraudsters diverted a major portion of these buyers' deposits to pay business expenses and for personal use.
The fraudsters never purchased the land they were selling, which caused delays in closing the land sales to the buyers. The fraudsters decided to send letters in an attempt to explain the delays, representing it resulted from the lengthy time required to survey the land. Although, they never disclosed that First Loan Solution did not own the land, but assuring the buyers that their deposits were being held in escrow accounts. These letters were used to conceal the fraud and lull the buyers into a false sense of security about the status of the land transactions and the safety of their deposits.
In an attempt to make this fraud scheme seem legitimate they hired a law firm to serve as the closing and escrow agent for land sale closing the transactions. The second fraudster became the face to the transactions. Many buyers attempted to terminate the land sale contracts and obtain refunds of their deposits. The fraudsters refused requests for refunds, offering the same excuses, and then referring very frustrated buyers back and forth between the different company and fraudsters involved. They actually did provide refund checks to several people with the checks issued bounced.
At some point during the fraud scheme the buyers were presented with limited liability company agreement and were asked to sign without explanation. These LLC agreements stated, the buyers were agreeing to purchase an interest in a limited liability company, with the company as the title owner of the property, and that the buyers were not purchasing land in their own names in the way it was represented to them at the time the buyers were signing their land sale contracts.
The two fraudsters from Miami Shores, Florida and pled guilty to conspiracy to commit mail fraud in connection with this vacant land sale scheme that defrauded more than 1,000 victims out of $10.6 million.
We should praise the work done by Jeffrey H. Sloman, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, and J. Thomas Cardwell, Commissioner, State of Florida's Office of Financial Regulation, made the announcement. This case was investigated by agencies participating in the Federal-State Mortgage Fraud Strike Force. Mr. Sloman commended the investigative efforts of the Mortgage Fraud Strike Force with particular commendation to the Federal Bureau of Investigation and the State of Florida Office of Financial Regulation. The case was prosecuted by Assistant U.S. Attorneys Peter A. Forand and Michael Sherwin.
We must be vigilant against fraud, recognizing its signs and taking proactive, definite, and realistic steps to not only prevent it but also punish it.
It starts with me.
It starts with you.
It starts with us…
You are all encouraged to report any suspected mortgage fraud activity to authorities, www.PreventLoanScams.org
Michael S. Richardson
Director/Mortgage Fraud Services
Author of "An American Epidemic, Mortgage Fraud a Serious Business"
Read more @ Mortgage Examiner's Articles
Follow me on Twitter "FocusonFraud"