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Florida Mortgage Fraud Suspects Headed to Court

Three Florida residents are on trial this week as defendants in an extensive mortgage fraud case, according to a report in the Daytona Beach News Journal. The Volusia County residents have been the subject of a 3 ½ year FBI investigation, which resulted in allegations that they defrauded millions of dollars from banks through false mortgage loan applications.

According to reports, the defendants targeted about 70 upscale, waterfront properties over the course of the investigation. They advised the owners that the properties were in need of repairs and convinced them to sell. Then, the suspects allegedly inflated the value and sale price of the house. A group of people, called “straw buyers” in the article, then reportedly applied for bank loans by misrepresenting their incomes and purposely misstating their intentions for the houses. Generally, straw borrowers usually have no intention of repaying the loan. Once the inflated loan was approved and the money distributed, the suspects allegedly worked with a closing agency to deposit the extra money into the account of a shell company. These funds were later split among the alleged co-conspirators.

What Constitutes Mortgage Fraud in Florida?

In Florida, any fraudulent activity that occurs in regards to the sale or financing of real estate is categorized as mortgage fraud. The term has become widely used since the beginning of the housing crash, as authorities increasingly investigate and prosecute potential fraud cases. According the mortgage lender Freddie Mac, mortgage fraud can take on many forms:

  • Fraud for property occurs when buyers provide the mortgage company with falsified financial information to secure a mortgage loan
    • Often includes the buyer and loan officer
    • Usually only one loan involved
    • No inflation of property value
  • “Industry insider fraud” often involves groups of industry professionals working together. This is reportedly the most costly type of mortgage fraud
    • Numerous participants
    • Usually multiple loans involved
    • Borrower may not be involved
    • Appraised property values
    • May include straw borrowers
  • Fraud   for Criminal Enterprise occurs when suspects launder illegally begotten funds into real estate ventures in hopes of “cleaning up” the money
    • Money laundering scheme
    • Usually involves property flipping
    • May involve a crime organization

Mortgage Fraud Penalties

Mortgage fraud penalties are often severe. These offenses are usually eligible for federal prosecution, making these cases even more serious for a vulnerable defendant. Under the Fraud Enforcement and Recovery Act, a mortgage fraud conviction can carry a maximum of 30 years incarceration and a $1 million fine, depending on the circumstances of the case. According to reports, if the defendants in the Volusia case are found guilty, they will not only face jail time, but they will also be expected to make financial restitution to the victims. Mortgage fraud case investigations can begin years before any charges are actually brought. So, even the suspicion of investigation is reason to contact an experienced and reputable Miami mortgage fraud attorney.

If you are the target of a Miami mortgage fraud investigation, Miami Attorneys Mycki Ratzan and Jude Faccidomo have the knowledge and skill to provide you with an aggressive defense. Call Ratzan & Faccidomo, LLC today at 305-600-3519 for a confidential and free consultation.

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