Indictment Handed Down in Equity Stripping Scam

Allison Tussey —  May 1, 2012 — Leave a comment

Tonii Carlos Greene, 52, Eagan, Minnesota, has been indicted for participating in a $3 million mortgage fraud scheme premised on the purchase of rundown houses to be rehabilitated and then sold. Instead, however, the equity was stripped from the homes, and the lenders were defrauded.

The defendant is charged with two counts of conspiracy to commit wire fraud, two counts of conspiracy to commit money laundering, seven counts of wire fraud, two counts of money laundering, and one count of monetary transactions in criminally derived property.

The indictment was unsealed following Greene‘s initial appearance.

The indictment alleges that from October of 2005 through 2007, Greene engaged in the scheme, which involved the submission of materially false information to lenders who were financing property sales. That information purportedly included representing in loan closings that large sums of the sale and loan amounts were being paid to real estate agents, when, in fact, most of those funds were pledged and paid to others in the form of kickbacks. The kickbacks were allegedly paid to property sellers in return for undisclosed reductions in the sale prices.

They also were allegedly used to secretly fund down payments for property purchases. Moreover, according to the indictment, some kickbacks were used for purposes totally unrelated to the real estate transactions.

The indictment also alleges that Greene conspired to conduct financial transactions involving the proceeds from the mortgage fraud scheme. In addition, Greene allegedly convinced investors to provide capital for the purchase of homes, among other purposes, but, instead, spent the money on himself. He also purportedly used later investments to repay or “hush” earlier investors.

If convicted, Greene faces a potential maximum penalty of 20 years in prison on each count of wire fraud and money laundering, five years on each count of conspiracy to commit wire fraud count, and ten years for making illegal monetary transactions. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant United States Attorney Robert M. Lewis.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.

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Allison Tussey

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