Comments (38) | Add a comment
Mortgage fraud initiative targets 123 in Southern Nevada
Tools
Representatives of the Southern Nevada Mortgage Fraud Task Force gathered Thursday in Las Vegas, which one task force member calls “mortgage fraud ground zero,” to announce the regional results of a nationwide initiative dubbed Operation Stolen Dreams.
Authorities said the operation, the largest collective enforcement effort aimed at confronting mortgage fraud, led to federal charges this week against 72 people in Las Vegas.
“This particular crime has had an effect and impact economically on most everyone in our community,” said Daniel Bogden, the U.S. attorney for Nevada.
Authorities said 123 defendants were charged, convicted or sentenced in Las Vegas during Operation Stolen Dreams, which began March 1. Those defendants are accused of engaging in hundreds of fraudulent transactions with straw buyers — someone whose name is used by someone else to buy a house — and causing a gross total loss of more than $246 million.
“This has been significant, just by the numbers and the amount of loss, but this is just the beginning,” Bogden said. “This is a good start, but our investigation and prosecution efforts will continue.”
He said the evidence gathered against the defendants stemmed from 25 criminal investigations conducted by the task force, which the FBI formed in 2008.
Most of the defendants worked in the local real estate industry. They include 30 loan officers, 24 real estate agents, six loan processors, five settlement agents, four mortgage brokers, two appraisers and one builder.
“They had inside knowledge of how to rip off our system,” said Kevin Favreau, special agent in charge of the FBI’s Las Vegas division.
Favreau said the task force still has hundreds of cases to investigate. In many cases, investigators received help from members of the public. Favreau said anyone with information about mortgage fraud in Southern Nevada should call the hot line at 584-5555.
“We cannot do it alone,” he said.
Scott Hunter, a supervisory special agent with the FBI’s Las Vegas division, started the Southern Nevada Mortgage Fraud Task Force in the spring of 2008. He called Las Vegas “mortgage fraud ground zero.”
Hunter said the numbers announced Thursday represent only a portion of the work the group has done. He said that the mortgage fraud hot line has received 3,250 calls during the past two years.
“I’ve never seen a crime epidemic like this,” said Hunter, who has investigated white-collar crime for 17 of his 19 years in law enforcement. “It’s so pervasive.”
Hunter said the task force has targeted those who engaged in fraud for profit, “not fraud for housing.”
“They’re not lying on loans for homes they’re going to live in,” he said.
The agent said those who perpetrated the fraud recruited straw buyers with established credit to buy homes at inflated prices. They then walked away from the loans, often sending the properties into foreclosure.
“They treated these houses as if they were ATMs,” Hunter said.
He said the straw buyers sometimes participated in the fraud knowingly, and sometimes they were duped into participating.
The schemes often involved false appraisals, false financial qualifications for the straw buyers and false escrow documents to cover up skimming, authorities said.
Paul Camacho, special agent in charge of Internal Revenue Service Criminal Investigation in Las Vegas, said the task force might be preventing future crimes.
“It’s been our experience that fraudsters just migrate to other frauds,” he said.
The following agencies participated in Operation Stolen Dreams in Nevada: the FBI, IRS Criminal Investigation, the Housing and Urban Development Office of Inspector General; the U.S. Postal Inspection Service, the U.S. Secret Service and Las Vegas police.
U.S. Attorney General Eric Holder announced Thursday in Washington, D.C., that Operation Stolen Dreams has involved 1,215 criminal defendants nationwide. Those defendants are accused of causing more than $2.3 billion in losses.
As of February 2008, Nevada was the top state in the nation for investor-owned mortgage defaults, according to the website of the FBI’s Las Vegas division. Currently, 10 of the division’s approximately 130 agents are assigned exclusively to mortgage fraud investigations, a spokesman said.
On Thursday, real estate industry professionals praised those involved in the Southern Nevada crackdown on mortgage schemes.
William Ochs Jr., owner of Nevada Mortgage, said he supported the investigations and the resulting criminal charges.
Ochs said he has heard of countless mortgage-fraud scenarios, including tales of consumers whose loan-application information was reproduced, unbeknownst to them, on applications for additional mortgages.
“There’s no room for this (fraud) in any business,” Ochs said. “You’re here to help and assist people in one of the most exciting times of their life.”
Homebuyers are “absolutely” safer now than they were before the fraud roundups began, he added.
“Consumers should be much more comfortable and confident that home purchases these days are qualifying (for loans), and that their documents are pretty standard and specific,” he said. “Those processes protect not only you, as a consumer, but they let you know your neighbor is going through the same requirements to qualify.”
Robin Camacho, a Realtor with real estate brokerage Sellstate NRES, said the task force’s work sent a “strong message” to the real estate and mortgage industry.
“I’ve never seen these types of fraud personally, but I know many people around me who have,” she said. “It’s something we, as an industry, need to be much more diligent about watching out for.”
Robin Camacho, who is not related to Paul Camacho, called fraudulent mortgage practices the catalyst for the housing slump in Las Vegas.
“Prices went up really fast, and there were bad people who jumped in and took advantage of that. But those people are gone, and it’s a much safer market,” she said. “The market appears to be stabilizing, too, though it’s too late for unfortunate homeowners who were put in homes they couldn’t afford in the first place.”
Both Ochs and Robin Camacho said the real estate and mortgage professions have made significant strides in self-policing.
Nevada has issued tougher new educational requirements, and loan officers now must be licensed nationally and not just through the state, Ochs said. Plus, the number of mortgage companies in Nevada has dropped from more than 2,000 at the peak of the market to 200 today, while the number of loan officers has plummeted from 18,000 to around 2,000.
Robin Camacho said she is pleased that the task force’s work will continue. “Who better to see these problems coming, and report them to the task force?”
Contact reporter Carri Geer Thevenot at cgeer@reviewjournal.com or 702-384-8710.
Comments
Terms & Conditions
The following comments are provided by readers and are the sole responsiblity of the authors. The Review-Journal does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please use the Report Abuse button.
Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 24 hours. Please do not submit a comment more than once.
Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.
RSS
Twitter
Facebook
Roger, bone did an admirable job describing what I meant. Remember all the real estate "get rich" promotions? I own a couple "Rich Dad, Poor Dad" books, and thought 'let's make hay while the sun shines'. Friends of mine flipped houses, making good money till the music stopped and they got stuck with the last house. Same thing happened in the late 90's with everyone trying to out fox the Stock Market (Ladies Investor Clubs were all the rage!). Same result. Busted left with tech stocks. The Nasdaq, now at 2200, was OVER 5000 back then, remember? But please don't get me wrong! I, also, am curious why there wasn't ONE NAME mentioned. THAT is the dog that did not bark!
Do some investigative journalist work and publish a list of the names of the accused.
Seriously...wtf?
Bone, has a good point what ever happened in that political corruption case, dealing with property management companies, construction companies and attorneys that were allegedly involved. Ripping off all of those HOAS?
@Roger, I think Athos is saying that it took two to tango. However they explictly said in the article that the FBI is looking for people who committed fraud for profit. I know where Athos is coming from, there were a variety of reasons that people got in trouble. Some people had to have what their neighbors had. Others funded businesses on their equity, others became instant real estate investors. Not all of it had to do with these brokers shoving loans down your throat. It went both ways. People slammed their fists on the table and would threaten to go across the street to get the dirty deal done that the good guy wouldn't do.
Where are the names?! Also what the heck happened with the HOA corruption that the FBI started about 2 years ago? The one where the former cop who was an HOA president committed suicide right after the news aired? We want the names!!
@Athos, can you explain. Who is 'we' and what 'game' are you referring to ? ie, "we were all caught up in the game" and "the people arrested in this operation were not the cause of our inflated home prices. WE were." Just curious.
That's a start in Las Vegas. Next we need to do something about these little communist organizations that we call HOAs. They are great at collecting money for dues and fines
I found this quote..."First thing you're going to do when you go into a neighborhood, when you acquire a realtor, you're going to inquire about the comps. What are the recent sales? A lot of these areas, the comps were bogus," said FBI Special Agent Scott Hunter. EXACTLY! which has always been the basis for my complaints. The free market of supply and demand did not determine prices, they were manipulated by crooks. This is great these people are being called to justice but what about the legitimate homebuyers who now hold notes well in excess of the current values? "The FBI says the alleged fraudsters targeted communities built from 2003 to 2006. They infiltrated into those communities and inflated the housing bubble even more." So where do I go for recourse? maybe civil suits versus the accused ? is that an option?
To all the Monday morning quarterbacks, we were ALL caught up in the game. The one or two voices that cried 'beware, what goes up must come down' were drowned out by the roar of greed. No one I knew, saw the 40% drop. Looking back, it's easy to see where we were suckered, but the people arrested in this operation WERE NOT THE CAUSE OF OUR INFLATED HOME PRICES. WE WERE. Where is the task force busting illegal aliens purchases? Where is the task force investigating who gets the stimulus money? Can you trust the government to police itself?
Names! Names! We want their names. Where can we find the list?