A Jacksonville, Florida appraiser has been sentenced to four years in federal prison as he and his fraudster partner, contracted to purchase about 55 houses and commit fraud. He would appraise most of the properties then his partner swindler would submit the fraudulent inflated appraisals to support the purchase price.
They both did this with intent to submit the appraisals to lenders in support of mortgage loan applications. The lender was did not know that the price listed in the submitted documents was higher than the real price negotiated with the seller. In the efforts to get the loan approved they then submitted fraudulent financial documents including altered bank statements and fake payroll information, in order to obtain an approval of each loan applications which provided a “Clear to Close”, allowing them to receive the difference as well as the commissions and fees that are customary on every individual real estate transaction.
The appraiser’s plea agreement details one transaction in which he acted as a buyer's agent for his fraudster partner. They negotiated with a seller to purchase a house for $490,000 and then fraudulently appraised the house for $625,000. His partner then submitted first and second mortgage loan applications for the house reflecting a sales price of $625,000, along with altered bank statements with much larger cash balances in the account than actually existed. The lender approved the loans and, at the closing his partner received $134,000, which was listed on closing documents as an "Assignment of Contract Fee." And the appraiser was paid $12,250 as a broker's fee and $550 for the appraisal fee.
His fraudster partner caused the lenders to approve and fund more than $29,272,000 in mortgage loans. The appraiser received a total of about $100,000 in commissions and fees. His partner received $6,296,303.65 from the mortgage fraud scheme pleaded guilty to a conspiracy charge and was sentenced to seven years in federal prison on November 5, 2009.
We should all congratulate the Federal Bureau of Investigation who investigated and was prosecuted by Assistant United States Attorney Arnold B. Corsmeier. It was brought as part of the Middle District of Florida's Mortgage Fraud Surge, a joint effort by the U.S. Attorney's Office for the Middle District of Florida, the Federal Bureau of Investigation, Tampa and Jacksonville Divisions, and numerous other federal, state, and local law enforcement agencies. The Surge focused intensive investigative and prosecutorial resources on the mortgage fraud crisis that plagues middle Florida and has contributed to the current economic situation nationwide. The Surge accelerated mortgage fraud cases to bring perpetrators to justice quickly and provide maximum deterrence, and it was the first step in an ongoing effort to prosecute mortgage fraud of all types throughout the Middle District. For more information on the Middle District of Florida's Mortgage Fraud Surge, please contact Steve Cole, Public Affairs Officer for the United States Attorney's Office.
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.
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Michael S. Richardson
Director/Mortgage Fraud Services
Author of "An American Epidemic, Mortgage Fraud a Serious Business"
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