Real estate broker sentenced in mortgage scam

by Ryan Smith29 Jan 2014
A former California real estate broker has been sentenced to 10 years in prison for bilking elderly homeowners and lending institutions out of nearly $10 million in an 11-year mortgage scam.

Prosecutors say that James Lee Lankford, 74, convinced elderly homeowners to sell their properties to him and provide financing for the purchase. He told the homeowners that he would make interest-only payments and pay the principal at a future date, according to the U.S. Attorney’s Office. At the same time – and unknown to the property owners – Lankford secured mortgages from lenders to finance the purchase of the same homes. Lankford didn’t inform the lending institutions that he’d already obtained seller-backed financing and in some cases submitted fraudulent loan documents to ensure loan approval.

In some cases, Lankford then refinanced the properties through another lending institution after falsifying deeds that claimed the original property owners had been paid in full. He would then draw out accumulated equity on the properties and allow them to go into foreclosure.

“Lankford’s elaborate scheme was damaging not only to individual victims but also to lenders and the local economy,” said Special Agent in Charge Monica M. Miller of the Sacramento division of the FBI. “He used vulnerable, elderly citizens as mere pawns in his elaborate scheme, carelessly and irreparably damaging their financial wellbeing while defrauding lenders to elevate his own lifestyle, lining his pockets with ill-gotten gains. This case exemplifies the importance of partnership among federal and local law enforcement agencies for successful investigation and pursuit of justice for victims of financial crime.”

Lankford’s co-defendant and spouse, Jon Vance Lankford, was sentenced to one year of home detention followed by five years of supervised release. He will care for the couple’s four adopted children, according to a Sacramento Bee report.

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