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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (26603)	12/17/2007 6:00:58 PM
From: Snowshoe	Respond to of 220065

5 Charged in Alleged Mortgage Fraud (Minnesota) biz.yahoo.com Monday December 10, 6:18 pm ET By Elizabeth Dunbar, Associated Press Writer Authorities Charge 5 in Alleged Mortgage Fraud Scheme MINNEAPOLIS (AP) -- Authorities announced charges Monday in what they say was a $4.9 million mortgage fraud scheme that led to two dozen homes going into default in north Minneapolis, an area that has been hit hard by the nationwide wave of home foreclosures. Universal Mortgage Inc., based in Brooklyn Park, was cited along with its president, three employees and another man investigators said were involved in the scheme. Of the 24 homes involved, 23 are now in foreclosure, Hennepin County Attorney Mike Freeman said. "We think there'll be more homes," Freeman said at a news conference. "It's much more pervasive than I thought." Charged with racketeering and theft by swindle in the 25-count case are Donald Walthall, who identified himself to the Minnesota Department of Commerce as branch owner; employees Marlon Pratt, Rahmeen Underwood and Andre Bellfield; and Cleveland Fields, who authorities said was not employed by Universal but worked closely with Underwood in facilitating loan frauds. Walthall and Underwood were arrested Friday, and the others were being sought, Freeman said. A man who answered the phone at Universal Mortgage on Monday hung up, and a subsequent message left by The Associated Press wasn't immediately returned. Messages left with several defendants or their attorneys were not immediately returned either, but Stephen Smith, a Minneapolis lawyer who expects to represent Pratt in the case, said it was too early to say much about the charges. "From what I know of my client, he's going to be in a strong position to fight the charges," said Smith, who has encouraged Pratt to turn himself in. According to the criminal complaint filed in Hennepin County District Court, several employees engaged in "mortgage flipping," where they bought and sold residential property quickly at rigged prices. The employees recruited so-called "straw buyers" with good credit histories to invest in real estate. In most cases, the homes were owned by Universal Mortgage employees, the complaint said. The defendants told the buyers they would take care of all the loan applications and down payments and would find tenants for the properties, according to the complaint. The defendants falsified information about the straw buyers to get loans, then failed to follow through with monthly payments, leading to the foreclosures. "The tragedy is not only to the straw buyers whose credit history is ruined," Freeman said. "There's a real tragedy for the neighborhoods." Most of the properties involved were located in north Minneapolis, which has been "decimated by the tidal wave of foreclosures," said Assistant Hennepin County Attorney Tom Fabel, who has worked since June on mortgage fraud cases. "In a very significant way, this company has contributed to those foreclosures," Fabel said. "It causes great neighborhood harm with an increase in crime and a decrease in property values." Including the most recent case, the county attorney's office has filed charges against 19 individuals and corporate defendants in mortgage fraud schemes during recent months, Fabel said. The companies face fines of up to $1 million, and the individuals face similar fines and prison time. He said the case against Universal Mortgage came about after the Star Tribune of Minneapolis published a story in June about one of the straw buyers, Irene Thomas, who said she was duped into buying properties with Fields' money. Nine properties in Thomas' name are now in foreclosure, according to court documents. Thomas hasn't been charged, and Freeman said she and several of the other known straw buyers have cooperated with investigators. Fabel said anyone looking to invest in real estate should learn from the case and avoid such arrangements. "They should be very, very careful about what they're getting into," he said. "What they're prompted to do is really quite illegal and could get them into very serious trouble."