Sophisticated Foreclosure Fraud Surfaces Pointing to a Second Round of Scams
A sophisticated foreclosure fraud scheme has surfaced in the Twin Cities and greater Minnesota region resulting in criminal charges being brought against four persons. It is pointing to the possibility of another round of scams but with a difference; previously it was about easy money but this time the schemes are more twisted and complex.
The criminal case has been brought in the District Court of Hennepin County by the Minnesota Department of Commerce. The lawyer for the defendants is Tim Webb. The county attorney is Michael Freeman. Involved in the case are 65 houses and at least $10 million. The scams were operated from 2009 June till 2010 August. In each instance a familiar pattern was followed.
The usual routine is that when a house is foreclosed the bank buys it off at the sheriff’s auction. The target of the bank is to realize as much possible of the amount due on the mortgage. After completion of the sale the scammers (James and Wendy Ober, Raul Burgos and Alejandro) would engage a “straw buyer” to buy the troubled property at a very low price. These straw buyers were set up by the scammers.
To get loans from the bank they presented whatever was required – false employment records, college transcripts, divorce papers etc. In the case of some federal loans a married pair or someone who had previously owned a house would be ineligible. In one divorce decree the forged signature of Judge Robert King of Dakota County (Minnesota District) was submitted.
After finalization of the sale much of the proceeds from the loan would go to those participating in the fraud. The house was allowed to slip into foreclosure once more.
The Obers were also charged for lying about the loan papers and renting out some of the units – something that was illegal according to mortgage terms. The authorities contended that the accused took great pains to cover up their tracks.
At a press conference in Minneapolis the investigators showed on cell phone an image that listed codes for calls coming in. If a particular code was seen when the unit started to ring, the fraudster immediately knew that it was from say, Bio Medical Solutions or any other false company. Accordingly it was used as a confirmation that the loan applicant was employed with the aforesaid company.
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