Criminal charges have been filed against 25 Chicago area residents in what is believed to be one of the largest mortgage fraud schemes ever prosecuted in the District of Chicago, Illinois.
Those charged were named in one of three separate indictments returned by a Federal Grand Jury in Chicago, Illinois. All of those charged are scheduled to appear in U.S. District Court in Chicago. The investigation resulting in these charges was a joint effort between the Chicago FBI’s Safe Streets Gang Task Force (SSGTF) and the Postal Inspection Service’s Mail Fraud Team, and was initiated in 2004, following the arrest of 47 known and suspected members of a Chicago based street gang by the SSGTF, in an investigation code named “Operation Marveless.” The charges announced include mail fraud, wire fraud, money laundering and conspiracy, all of which are felony offenses.
In total, the three indictments allege that over 150 properties, half of which are in foreclosure, were involved in these fraudulent transactions, with potential losses from these fraudulent mortgages in excess of $25 million.
The first indictment alleges that Raymie Henderson, 45, Nowell Lando, 35, both of Chicago, and Augustus Wright, 48, Calumet City, Illinois, laundered in excess of $700,000, which were the proceeds from an illegal drug distribution operation centered on Chicago’s south side. Wright, Henderson and Lando are charged with using a portion of the drug proceeds to purchase and renovate real estate in the Chicago, Illinois area. The drug proceeds were allegedly laundered through a business owned and operated by Henderson and Lando, R & P New Development.
The second indictment charges two employees of mortgage brokerage company Equity Express, Inc., Larry Melvin, 37, Evanston, Illinois; and Maria Vega, 27, Country Club Hills, Illinois; along with two other individuals identified as Shaun Chaney, 40, Park Forest, Illinois; and Mary Dochee, 55, South Holland, Illinois, with operating a scheme that recruited individuals as straw buyers to purchase properties in and around the Chicago, Illinois area that they were not otherwise qualified to purchase. The indictment alleges that Melvin, Chaney and Vega prepared fraudulent mortgage applications that included false employment, asset and income information, which were designed to induce various lenders to issue mortgages to buyers who would otherwise not have been qualified. The indictment also charges Dochee with recruiting buyers and providing false rental information to obtain buyer financing.
The third indictment charges 18 individuals, including loan officers and processors, a Certified Public Accountant, a licensed real estate agent, a tax practitioner, a property manager, numerous property developers, and several property buyers, with devising and operating a scheme to defraud numerous lending institutions by means of false and fraudulent mortgage applications. The alleged leader of this scheme, Larry J. Skrobot, 54, of Matteson, Illinois utilized a land trust to purchase distressed properties in and around the Chicago, Illinois area. Skrobot and his co-defendants would then recruit straw buyers to purchase these properties. Skrobot and his co-defendants referred the buyers to loan officers, Varena McCloud, 44, Chicago, Illinois, and Joseph Miller, 47, Phoenix, Illinois. The buyers were not qualified to obtain the financing necessary to complete these transactions, and were aided by the loan officers in securing mortgage loans through the use of false employment, income and asset information during the application process.
Others named in this fraud scheme include:
Karl Allen Jr, 43, Westchester, Illinois;
Charlene Batalla, 26, Chicago;
Alonzo Braziel, 30, Chicago,
Hattie Brooks, 47, Chicago;
Kevin Earl, 35, Chicago;
James T. Green, 36, current residence is unknown;
Jospeh W. Green, III, 48, Westmont, Illinois;
Alfredo Hilado, 49, Bloomingdale, Illinois;
John Lewis, 60, Maywood, Illinois;
Christopher Marchetti, 34, Chicago Heights, Illinois;
Jonathan Marchetti, 29, Monee, Illinois;
Diane L. Robinson, 46, Chicago;
Donald Thomas, 49, current residence is unknown;
James Robert Thomas, 49, Chicago; and
Johnny White, 54, Harvey, Illinois.
In announcing these charges, Mr. Grant noted that the FBI views mortgage fraud as a growing and significant crime problem, with over 1,200 cases opened nationwide in 2007. “The joint investigative effort which led to the charges announced today is just one of the steps that the FBI, along with our state and federal law enforcement partners, are taking to combat this fraud which, as we have recently seen, can have a significant effect on the nation’s economy,” said Mr. Grant.
Inspector Brady added “Mortgage fraud destroys entire communities. As an agency, we will continue to aggressively investigate and seek prosecution of those seeking to do harm to the nation’s economic and financial infrastructure. The U.S. Postal Inspection Service takes this type of criminal activity very seriously and is committed to protecting consumers and the business community from fraud schemes involving the mail.”