4 Indicted in Joint Mortgage Fraud Investigations

admin —  June 4, 2010 — 1 Comment

Jimmy Pililimis, 36, Chicago, Illinois, Anthony Palermo, 41, Chicago, Illinois, have been indicted on multiple felony financial charges following a joint city, county and federal investigation that is part of a sweeping new crackdown on mortgage fraud in Cook County, Chicago.

Pililimis operates a Chicago-based kitchen and bath business. Pililimis is charged with Organizing a Continuing Financial Crimes Enterprise and Identity Theft, both Class X felonies punishable by six to 30 years in prison. He is also charged with Financial Institution Fraud, Loan Fraud, and multiple counts of theft.

Palermo operates a Chicago-based mortgage company. Palermo is charged with Financial Institution Fraud, Loan Fraud, Attempted Identity Theft and multiple counts of theft.

In addition, two unidentified co-defendants have been charged with multiple felony financial- related charges.

According to prosecutors, the defendants are charged in connection with three schemes to defraud, the first in which Pililimis is alleged to have provided one of the co-defendants with fraudulent income tax returns, fake pay stubs and phony W-2 forms in order to obtain nearly $28,000 in automobile loans from a credit union.

In the second scheme, the co-defendants functioned as so-called “straw purchasers” and one of them was provided with false employment documents, fake W-2 forms and phony bank statements by Pililimis in order to obtain a $360,000 loan for a mortgage on a home in Chicago, Illinois’ Englewood community.

After the sale of the property, the home went into foreclosure proceedings and, since the time of the sale, numerous arrests have taken place at the property for charges ranging from gambling to weapons offenses. The home has also been cited by the City of Chicago for housing violations.

After targeting the defendants, investigators and prosecutors conducted a pro-active investigation into Pililimis and Palermo’s third scheme, using undercover officers and agents to pose as potential straw purchasers and utilizing court-approved, covert audio and video devices to record the defendants as they plotted to defraud another lending institution out of more than $350,000. The case marks the first time that county prosecutors have utilized electronic surveillance in a sting operation targeting mortgage fraud.

The two businessmen and two unnamed co-conspirators were indicted as a result of the ongoing investigation, which was conducted by a new Mortgage Fraud Unit within the Cook County State’s Attorney’s Office, in conjunction with the Chicago Police Department Financial Crimes Unit and the Inspector General’s Office of the United States Department of Housing and Urban Development.

According to State’s Attorney Anita Alvarez , the dedicated “Mortgage Fraud Investigations and Prosecutions Unit” was created as a result of a $2.3 million federal grant from the American Recovery and Reinvestment Act, and it will conduct pro-active mortgage fraud investigations and coordinate takedowns of corrupt appraisers and brokers.

The new unit will also have a unique community-based approach, according to Alvarez, with mortgage fraud prosecutors working in the State’s Attorney’s Community Justice Centers on the city’s North and South sides. A third office is scheduled to open this summer in west suburban Oak Park.

Rampant mortgage fraud is destroying the quality of life in so many of our communities and it is having a direct impact on neighborhood crime when abandoned homes become havens for drug dealing, prostitution or other violent crime,” Alvarez said.

Recognizing that our county resources are limited, we have sought and received federal stimulus money that we intend to use to take a much more aggressive approach in tackling this crime, working from within the communities that are affected. Today’s indictments are the first in what we expect will be an effective wave of mortgage fraud prosecutions in cooperation with our investigative partners at the local and federal levels.”

Traditionally we have prosecuted mortgage fraud reactively after the crime had occurred, when the victims had already lost their money and the properties were headed into foreclosure. We are now going to target this crime proactively and instead of merely chasing a paper trail, we intend to chase the defendants themselves and work to prevent the fraud before it occurs.”

Barry McLaughlin, Special Agent In Charge for HUD’s Inspector General’s Office, said his agency is committed to working with local police and prosecutors in partnership to address mortgage fraud.

We have all seen how mortgage fraud has destroyed areas throughout Cook County and we know that these crimes are constantly evolving,” said McLaughlin. “The Office of Inspector General stands ready with the Cook County State’s Attorney and the Chicago Police Department to continue to develop new and creative approaches to eradicate this cancer on our communities.”

Sergeant John Lucki, commanding officer of Chicago’s Financial Crimes Unit, said the arrests represent the pervasive nature of the problem of mortgage fraud and how it extends to other communities.

Here we have revealed a group of economic criminals operating in Cook County’s northern suburbs who are exploiting one of Chicago’s most devastated housing markets in the Englewood community, depleting legitimate economic resources, community and business efforts by stealing away mortgage monies for their own self-serving greed,” Lucki said.

Alvarez said her office is also stepping up efforts to work with business groups, neighborhood organizations and others directly affected by mortgage fraud. Her office has posted up-to-date mortgage fraud information on its website (www.statesattorney.org) and established a special email tip line for citizens to provide information about suspected mortgage fraud.

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One response to 4 Indicted in Joint Mortgage Fraud Investigations

  1. Was Anthony Palermo sentenced? Cannot find any news story relating to this.

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