Posted on 06/24/2009 3:37:01 PM PDT by Larry381
CHICAGO—Forty-one defendants are facing federal charges relating to various mortgage fraud schemes in five separate cases made public today by federal law enforcement officials. In some of the schemes, the defendants were charged with falsely inflating the values of dilapidated homes in urban areas. Other schemes feature a twist where defendants were charged with deals involving million-dollar condominiums in a Chicago high-rise and sprawling homes in affluent suburbs. A total of 37 individuals and four businesses, including a title company that closed on allegedly fraudulent loans, are facing new federal charges relating to mortgage fraud in five separate cases in Chicago, federal law enforcement officials announced today. The defendants include a vice president of the title company, mortgage brokers, loan officers, real estate investors, appraisers and an attorney. Together the cases involve more than $48 million in fraudulently-obtained mortgages issued by various lenders and secured by scores of residential properties in the Chicago area, including two in the suburbs of Wheaton and Glenview. As a result, the various lending companies suffered millions of dollars in losses after the loans went into default and the properties were foreclosed upon.
Among the cases announced today are:
* nineteen defendants, including LaSalle Title Company and three other businesses, who allegedly schemed to fraudulently obtain loans totaling more than $10 million on 70 residential properties in Chicago, including many blighted homes on the city’s south side, resulting in losses totaling approximately $5.8 million to various mortgage lenders; * 10 defendants accused of scheming to fraudulently obtain loans totaling more than $17.2 million on various multi-million-dollar condominiums and penthouses at 33 West Ontario St., known as Millennium Centre; * six defendants accused of fraud and using stolen or fictitious identities to fraudulently obtain approximately $3 million in home loans from various lenders by submitting false applications for loans; and * the chief executive of a Burr Ridge mortgage lender who allegedly defrauded GMAC Bank out of approximately $15 million in funding more than 450 fictitious residential loans.
“Mortgage fraud is a serious issue that affects not just financial institutions but ordinary citizens who may have invested in such financial institutions or who hope to purchase, sell or refinance a home by honestly setting forth their finances. Today’s charges also show that the mortgage fraud issue affects suburbs as well as cities,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois
Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Barry McLaughlin, Special Agent-in- Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago.
Just a year ago, 67 defendants were charged in a dozen mortgage fraud-related cases in Chicago, and another two dozen defendants were charged in multiple cases this past March stemming from an undercover investigation in which law enforcement agents posed as straw buyers of houses. In addition, scores of other defendants have been prosecuted in dozens of routine cases in the last couple of years, signifying the high priority that federal law enforcement officials give mortgage fraud in an effort to deter others from engaging in crimes relating to residential and commercial real estate.
All of the charges announced today are felonies and carry various maximum penalties, including 30 years in prison and a $1 million fine on each count of mail and wire fraud if a financial institution was affected, or 20 years in prison and $250,000 fine if there was no financial institution impact. As an alternative, the court may impose a maximum fine totaling twice the gain to any defendant or twice the loss to any victim, whichever is greater. If convicted, the four business entities charged each face a maximum penalty of five years probation and a $500,000 fine. If convicted, the Court would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.
The public is reminded that indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Details of the cases announced today follow:
United States v. Lisnek, et al.
In one of the most comprehensive mortgage fraud schemes ever charged in Chicago, a Buffalo Grove couple, acting through two real estate investment companies they controlled, allegedly directed a scheme in which 15 individual defendants and four businesses purchased distressed properties, including from the U.S. Department of Housing and Urban Development, and then resold them for fraudulently inflated prices approximately two to three times the purchase price. Between 2002 and 2007, the defendants allegedly fraudulently obtained mortgage loans in excess of $10 million on approximately 70 residential properties throughout Chicago, including many on the city’s south side in and around the Englewood neighborhood. As part of the alleged scheme certain defendants paid other defendants to make homes “camera ready,” by making them appear as though they had been rehabilitated.
Richard Lisnek, 56, a licensed mortgage broker and president of K&L Real Estate, Inc., and American Eagle Mortgage, Inc., and his wife, Judy Kien, 50, an attorney and president of D&J Properties II, Inc., both of Buffalo Grove and who had offices in Arlington Heights, together with 4 13 other individuals and two other businesses, were charged with various counts of mail fraud and wire fraud in a 22-count indictment that was returned today by a federal grand jury. Other defendants include another mortgage broker, three real estate appraisers, a title company and one of its vice presidents. Lisnek and Kien allegedly provided funds to buyers, which they falsely represented to lenders were the buyer’s own funds for down payments. Various other defendants allegedly made false representations concerning the buyer’s employment, financial condition, contribution towards the purchase price and intention to occupy the home, and the sales price, condition and value of the property. After fraudulently obtaining the loans, the victim lenders incurred losses totaling approximately $5.8 million because they were unpaid, causing the residences to be foreclosed upon and resold for amounts less than the outstanding mortgage loan balance. The indictment seeks forfeiture of the alleged loss amount.
According to the indictment, Lisnek solicited individuals with good credit to buy distressed properties from K&L Real Estate and D&J Properties by promising that they would not have to invest any of their own money and promising to repair the property and make the mortgage payments until the home was restored or provide funds to rehabilitate the property and assist in obtaining tenants under HUD’s Section 8 subsidized housing program.
Lisnek recruited Alfredo Hilado, 50, of Bloomington, Ill., and Mark Vargo, 53, of Elmhurst, to recruit other buyers, knowing the transactions would be financed by making false statement to mortgage lenders. Lisnek paid Vargo and others to make the distressed properties appear what Lisnek called “camera ready” or “picture ready” by making cosmetic repairs to front and rear exteriors so the homes would look fully restored or better than their actual condition.
Three licensed real estate appraisers, James Heiland, 63, of Barrington Hills; Brandon Bradford, 37, of Chicago; and Vlad Ostromogilsky, 38, of Glenview, allegedly prepared inflated appraisals, falsely representing that those properties were fully rehabilitated, knowing that they would be used to support fraudulent loan applications.
Lisnek and licensed mortgage broker Alex Bulmash, 32, of Lincolnwood, president of Investment Group, Inc., which operated as Investment Mortgage Group (IMG) in Lincolnwood and Skokie, allegdly caused employees of IMG including Bulmash’s brothers, Michael Bulmash, 29, of Norridge, and Allen Bulmash, 29, of Chicago, and Anthony Navickas, 28, of Chicago, to prepare and submit false loan applications and supporting documents, such as verifications of deposit and rent and property leases, on behalf of buyers of distressed properties from K&L and D&J.
Lynn Liskiewicz, 48, of Chicago, a vice president and regional manager of LaSalle Title Company, located at 100 North LaSalle St., Chicago, allegedly caused Lasalle Title to close sales by K&L, D&J and Lisnek by creating false closing documents concealing that the down payments represented as the buyer’s funds were actually provided by the sellers, that the purchase price was inflated, and that lenders were being deceived into financing all or a greater portion of the sale than portrayed for buyers with little or no equity in the property being purchased. The fraudulent closings included Kien signing settlement statements, known as HUD-1s, on behalf of sellers falsely representing the source of the buyer’s funds.
Hilado, Vargo, and additional defendants Joanne Ruiz, 47, of Elmhurst; Kenneth Turner, 32, of Woodridge; and Antoinette Laws, 47, of Chicago, purchased property from K&L and D&J knowing that they and others signed false loan applications to fraudulently obtain mortgages.
For those who think that everyone in foreclosure is an irresponsible chump, google litton mortgage.
A neighbor is losing their home of 8 years in a couple weeks due to Litton’s tactics.
I too was skeptical until I googled them.
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