Tuesday, February 21 2006 @ 05:14 PM UTC
Contributed by: jron
Colorado is cracking down hard on real estate mortgage fraud. Federal and state officials are aggressively prosecuting agents, brokers, and homeowners engaged in a broad range of real estate fraud schemes.
Investigators uncovered hundreds of cases that had real estate agents, mortgage brokers and fake-document vendors collaborating to sell homes to illegal immigrants using forged drivers' licenses, Social Security numbers, and falsified income and tax documents.
The U.S. Attorney General's Office in Colorado has prosecuted about 90 grand jury indictments. They are facing charges ranging from mail and wire fraud to witness tampering and money laundering.
One year-long case recently resulted in the indictments of 10 defendants by three different grand juries in Jefferson County.
Investigators from the Colorado Bureau of Investigation said they discovered hundreds of houses were sold by the defendants to undocumented immigrants.
Fraudulent mortgage, real estate and foreclosure schemes have become so common in Colorado, that Colorado was named among the top 10 "hot spots" for mortgage fraud in the US, according to the Federal Bureau of Investigation.
The increased criminal activity has induced aggressive joint investigations that have included the CBI and FBI, the Colorado Attorney General's Office, the U.S. Department of Housing and Urban Development, U.S. Postal inspectors, along with various sheriff's agencies and police departments.
Brown and fellow investigators have seen hundreds of cases where home-buying transactions are based solely on falsified documents to acquire federally-backed loans. "What I guess I'm shocked at -- and what others in the lending industry say they're surprised about -- is how easily these documents were able to make it through the system," Brown said.
"We're seeing the fabrication of basically every kind of document imaginable," said John Harrison, an Internal Revenue Service criminal investigator and special agent. "We have seen a huge spike in the level of fraudulent mortgage activity, and I think it corresponds with cheap money and low interest rates."
Harrison and other IRS investigators spend most of their time tracking down criminals across Colorado who have forged tax documents to match falsified income statements. He's working on a case that involves investigators from numerous branches of the government.
"We refer to these cases as 'family affairs' because they often involve multiple jurisdictions," Harrison said.
The FHA loses money when these payments aren't made by non-qualified borrowers, with forged documentation, and a foreclosure ensues, investigators said.
"Every year, fraudulent real estate schemes victimize individuals and businesses from many walks of life, including struggling low-income families lured into home loans they can't afford, legitimate lenders saddled with over-inflated mortgages and honest real estate investors fleeced out of their investment dollars," said Terry Stuart, a special agent in charge of HUDís Office of Inspector General.