Mortgage fraudster on the lam after scamming $16 million from lenders

by Ryan Smith01 May 2017
Here’s a bright idea: When convicting someone of a $16 million mortgage-fraud scheme that could land him a decade and change in prison, maybe don’t let him just wander around free until the sentencing.

That’s the lesson being learned by the federal court charged with sentencing Oscar Ortiz, a Texas man who pleaded guilty in June of last year to conspiring to commit bank, mail and wire fraud. He was scheduled to appear for sentencing last week, but was nowhere to be found when the hearing convened. A federal grand jury promptly returned an indictment against Ortiz for failure to appear, and he’s now considered a fugitive, according to the US Attorney’s Office for the Southern District of Texas.

According to prosecutors, Ortiz and a co-conspirator, Houston realtor Seung Min (Suzy) Santillan, operated a mortgage-fraud scheme in which they recruited straw buyers to purchase properties in the Houston area. Loans were obtained using these straw buyers, and lenders were given “materially false information” to induce them to make the loans. The loans ultimately defaulted when Ortiz and Santillan failed to make mortgage payments.

Ortiz and Santillan made use of several business entities to execute the scam. They told the straw buyers that the homes would be in their name for a short time while modifications were made to the properties, and then be resold. Instead, once the loans were funded, a large portion of the proceeds would go to one of Ortiz’s and Santillan’s businesses. That happened even when one property was purchased for the second time with a different straw buyer. Ortiz and Santillan were able to pocket a large portion of the loan proceeds because they inflated the value of the properties with sham appraisals, prosecutors said.

Santillan pleaded guilty to the conspiracy in September. She was sentenced to 14 years in federal prison and ordered to pay $5,299,500 in restitution.


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COMMENTS

  • by Full Disclosure Please | 5/1/2017 12:01:11 PM

    I hate these stories. WHEN... WHEN did this occur? There is virtually no chance of this being recent under current guidelines. Is this another of it happened in 2007, but only caught up with them lately stories?

  • by Mike | 5/1/2017 12:12:31 PM

    he went on the run last week (or at least didn't turn up for his sentencing then) and was convicted last year. The FBI's original 'he's on the run' press release doesn't give us any dates https://www.justice.gov/usao-sdtx/pr/fugitive-sought-mortgage-fraud-scheme

  • by Johnny Mortgage | 5/1/2017 2:06:03 PM

    "Is this another of it happened in 2007, but only caught up with them lately stories?"

    Perhaps, or more likely, this another one of those, "..... the lender was competing with other banks on processing/underwriting turn times and didn't have time to 1)do an appraisal review 2) confirm the existence of the straw buyer's employer 3) check the title company and appraiser "last transaction on subject" section.
    THEN, the buyer defaulted but the value of the property (ies) tanked and the bank was damaged and the US Dept Justice did everything in their power to 'right the ship"

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