New York family accused of $20 million mortgage fraud scheme

by MPA19 Nov 2014
The FBI has made 15 arrests in several ultra-Orthodox Jewish New York communities involving a rich man, poor man mortgage and welfare fraud scheme that authorities say netted more than $20 million.

"The defendants involved alternately played the parts of prince and pauper depending on which scam was being perpetrated," U.S. Attorney Preet Bharara said at a news conference in White Plains, New York. "There's a lot of fraud here and shell games. ... The fraud was complex and they were fairly organized."

From at least 2004 to 2014, the group used falsified documents and concealed identities to obtain $20 million in mortgages and other loans from banks and financial institutions, according to court documents. Some of the defendants claimed to be wealthy to receive multi-million-dollar mortgages and then plead poverty to receive Medicaid and food stamps, according to the FBI.

The group also completed sham transfers of ownership of properties from one member of the conspiracy to another, or to other trusted individuals. As a result, lenders were unable to recover defaulted loans. Following default on a fraudulently obtained loan, the group deceived lenders into granting a satisfaction of the debt at a significant loss by proposing short sales of properties that were not arm’s-length transactions.

To read the FBI's full report, click here.




Is TILA-RESPA a good or bad thing long term?