Loan Closing Agent and Purchaser Plead Guilty to Fraud Charges in Cash Back at Closing Scheme

admin —  January 8, 2007 — 3 Comments

Jill M. Lehn, 39, Prior Lake, Minnesota, pleaded guilty to one count of wire fraud and one count of money laundering in connection with a cash back at closing scheme. Isadore Stewart pleaded guilty to one count of wire fraud.

Court documents filed in the case state that between December of 2004 and August of 2006, Lehn, a mortgage loan closing agent, prepared fraudulent closing documents relating to over sixty real estate transactions. In each of those dealings, the buyers, including Stewart, signed the documents knowing they were fraudulent in that they overstated the true purchase price of the properties. Lehn then provided the sham documents to corporate lenders and concealed that a portion of the loan proceeds would be paid out to the property purchasers and to other individuals. Specifically, the buyers pocketed the difference between the actual purchase price of the property and the inflated purchase price stated on the bogus loan documents prepared by Lehn. In total, as a result of the fraudulent documents, the buyers of the properties obtained over $3 million in concealed payments. Stewart illegally obtained approximately $271,333 between April and July of 2006 with respect to real estate transactions involving two properties in Minneapolis and one in Orono, Minnesota.

Both Lehn and Stewart acknowledged during court proceedings that they knew lenders relied on the actual purchase prices paid by the buyers when authorizing loans to assure that the loans were fully collateralized and that lenders had loan standards that did not permit payments of loan proceeds to buyers.

Stewart and Lehn face a maximum potential penalty of twenty years in prison and a $250,000 fine for wire fraud. Lehn also faces up to ten years in prison and a $250,000 fine for money laundering

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3 responses to Loan Closing Agent and Purchaser Plead Guilty to Fraud Charges in Cash Back at Closing Scheme

  1. With all the credit evaluation tools now available to the mortgage lending industry and all of the lending reforms that the industry could lobby for at every level one has to conclude that the industry is willing to live with a certain level of fraud to sustain itself. When it really starts to hurt the bottom line the industry will have to temper its greed and enact smart reforms.

  2. My comment is could I call a lawyer if my landlord says that they are going to take me to could for not paying the whols amoout of my rent, If the house that I’m renting has been foreclosed on. Is there any advice that you could give me on to what action I can take to slove this problem I having.The bank that took over this house is sayiong that I have until the first of next month to have left the house. I needed most of the money that I was using to pay my rent to find me some other place to go.

  3. Lehn’s husband should be in the slammer too. No way he didn’t know about his wife bringing home $270,000 in cash for mortgage deals.

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