2 Con Artists Arrested for Mortgage Fraud

Allison Tussey —  February 9, 2012 — 1 Comment

Warren Jackson, 41, Chicago, Illinois, who allegedly stole more than $350,000 in a wide-reaching mortgage fraud scheme in which they promised to help desperate homeowners avoid foreclosure has been arrested and is being held in Cook County, Illinois, jail. Yolanda King, 46, Chicago, who was also charged in the scheme, was arrested on January 10, 2012.

Jackson was charged with one count of organizing a continuing financial crimes enterprise, four counts of financial institution fraud and three counts of theft by deception, one count of criminal mortgage rescue fraud, one count of forgery by delivery, and one count of false impersonation of an attorney. King was charged with two counts of financial institution fraud and one count of forgery by delivery.

Jackson and King are facing six to 30 years and four to 15 years in the Illinois Department of Corrections, respectively.

The indiictment alleges that Jackson orchestrated two mortgage-related schemes involving Chicago homeowners. King was charged for her role in helping Jackson perpetuate these schemes. The first scam targeted homeowners at risk of foreclosure, promising to save their homes by negotiating lower mortgage payments. The indictment further alleges that after collecting upfront fees, Jackson failed to negotiate or perform any services on behalf of the homeowners, placing their victims at even greater risk of foreclosure.

In the second scheme, called a “sale-leaseback” to purportedly save the homeowner’s home, Jackson used straw buyers to purchase homes from distressed homeowners, sometimes falsely promising them that they could pay rent for a year and then could potentially buy back the property. Jackson also tricked homeowners into unknowingly selling their homes to straw buyers by leading them to believe that they were signing paperwork for a new loan to help them avoid foreclosure. The indictment alleges that Jackson used the sale-leaseback scheme to transfer title from homeowners to straw buyers for the purpose of stripping the remaining equity from the home. Individual homeowners lost from $70,000 to $150,000 of equity in their homes as a result of the schemes.

Illinois Attorney General Lisa Madigan announced the arrest.

“These financial predators targeted desperate homeowners and made claims that they would save people’s homes, but their action amounted to crimes,” Madigan said. “When homeowners engage with con artists as opposed to legitimate housing counselors, it puts borrowers one step closer to foreclosure.”

Attorney General Madigan has aggressively targeted mortgage-rescue scams as they have risen dramatically in the wake of the national housing crisis. These arrests mark the first criminal charges brought by the Attorney General in a mortgage-rescue case. Madigan has previously established Illinois as the most aggressive state in the nation to combat this scheme, filing 50 civil lawsuits, which have so far resulted in 28 injunctions against scam operations and the courts’ ordering defendants to pay back $2 million to affected homeowners. Madigan has also issued 622 cease-and-desist letters ordering rescue operations to stop illegally charging homeowners upfront payments for rescue services.

The Attorney General has previously sued both Jackson and King. In December 2010, Madigan filed suit for their illegal operation and solicitation for a Chicago charity, We Stop the Killings, and obtained an injunction in July 2011 that permanently barred Jackson and King from soliciting, receiving or holding assets for any charitable purpose in the state of Illinois or on behalf of any Illinois-based charity.

Prior to that case, Madigan sued the defendants and W2X Inc., PTU1 Inc., Y 2 X LLC, and Goldberg Bail-Out Inc. in a civil case alleging similar mortgage-related fraud. Those lawsuits are ongoing.

Assistant Attorney General Anshuman Vaidya is handling the cases for Madigan’s Financial Crimes Bureau, and the case was investigated by Associate Director James S. Dorger of the Attorney General’s Public Integrity Bureau, with assistance from the Federal Bureau of Investigation.

The public is reminded that the defendants are presumed innocent until proven guilty in a court of law.

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Allison Tussey

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One response to 2 Con Artists Arrested for Mortgage Fraud

  1. for my records

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