Chicago, IL-(ENEWSPF)- Six defendants were indicted January 12 on federal charges alleging that they participated in a $15 million mortgage fraud scheme involving more than 40 residential properties located in Chicago and south suburbs, federal law enforcement officials announced today. The defendants include two licensed realtors and a licensed loan officer who bought and sold homes, recruited others to act as residential purchasers, and allegedly caused various financial institutions to lose approximately $4.5 million on mortgage loans that were not repaid by the borrowers or fully recovered through subsequent foreclosure sales.
According to the indictment, the lead defendant, Wanda Rivera-Burton, a licensed realtor, was employed as a loan originator and also owned a real estate company, Options-R-Us Realty, as well as co-owned B&W Investments and Property management, Inc., with co-defendant and loan officer Brenda Tibbs. Another defendant, Lynette Johnson, was a licensed realtor employed by Options-R-Us Realty and owned World Investment and Management, the FBI says.
River-Burton, 39, of Chicago, was charged with seven counts of bank fraud, two counts of wire fraud, and one count of mail fraud in a 10-count indictment that was returned today by a federal grand jury. Tibbs, 55, of Tinley Park, was charged with two counts of bank fraud, and Johnson, 55, of Chicago, was charged with three counts of bank fraud and one count each of wire and mail fraud. Also indicted on one count of bank fraud each were Viktor Blanks, 51, of Oak Lawn, Dina Dunn, 48, of Chicago; and Nathaniel Maxwell, 34, of Chicago. All six defendants will be ordered to appear for arraignment in U.S. District Court.
The indictment also seeks forfeiture of $4.5 million in alleged fraud proceeds.
The scheme allegedly ran between October 2004 and early 2007, said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, who announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The investigation is continuing, they said.
According to the indictment, Rivera-Burton, Tibbs, Johnson, Blanks, Dunn, and others, including an attorney, purchased homes or caused them to be purchased from new home builders and other sellers, either individually or through nominees at inflated prices. The home builders and other sellers agreed to pay Rivera-Burton and Tibbs finders fees and commissions on the sale of properties, knowing that a portion of those funds were paid to nominees to complete the purchases of newly-constructed residences. Some of the homes were located in south suburban Country Club Hills, Crete, and Manteno.
Rivera-Burton, Tibbs, Johnson, and others allegedly recruited nominees to buy homes with promises that they would not have to put any money down, would receive cash back at closing, would not have to make any mortgage payments, their names would be removed from the title after a year and that the defendants would rent the residences. Rivera-Burton, Tibbs, the unnamed attorney, and others prepared and caused to be prepared fraudulent mortgage loan application packages on behalf of the nominees, containing false information about the borrowers’ employment, income, assets, liabilities, and intention to occupy the premises as a primary residence, the indictment alleges. They also failed to disclose that the nominees had purchased multiple residences and obtained mortgages from other lenders in a short span of time, it adds.
Rivera-Burton and Tibbs paid nominee purchasers, including Blanks, Dunn, and Maxwell, using the proceeds from the real estate transactions. All six defendants and others allegedly used the loan proceeds to enrich themselves and to buy and sell additional residences. Rivera-Burton, Tibbs, and others who controlled the residences without making mortgage payments, allegedly caused the loans obtained by the nominees to go into default. After the defendants allegedly fraudulently obtained approximately $15 million in mortgage loans, various lenders lost approximately $4.5 million when the homes were foreclosed and resold for amounts less than the outstanding mortgage balances.
The government is being represented by Assistant U.S. Attorneys Daniel May.
Each count of bank fraud, or mail or wire fraud affecting a financial institution, carries a maximum penalty of 30 years in prison and a $1 million fine and restitution is mandatory. The court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, however, the court must determine a reasonable sentence to impose under the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.