A federal jury returned guilty verdicts on mail fraud and wire fraud charges against Demetrius Barren and Julian Bishop. Each of the men faces up to 15 years in prison. Barren and Bishop were indicted in July 2002 along with Carl Miller and Kenneth Washington, in connection with an alleged property flipping scheme in Chicago, Illinois. Prosecutors alleged that the participants in the scheme duped investors out of millions of dollars.
The original indictment alleged a scheme whereby Barren would locate and purchase dilapidated properties in Chicago, Illinois and have appraisers, such as Washington, prepare inflated appraisals that concealed the need for rehabilitation and repair. Potential purchasers would be told that no down payments or closing costs would be required and that Barren would assist with mortgage payments.
The loan applications would be processed through loan officers and brokers such as Miller and Bishop. False information and/or documents including false verifications of deposit, employment and income and inflated appraisals would be submitted to lenders to support loan applications for unqualified borrowers. The properties would then be flipped to the borrowers at inflated values. Click here to view the indictment
"If things seem too good to be true, they probably are. That was the problem with a lot of the homebuyers in this case that testified for the government. The deal was too good to be true -- no down payment, everything was going to be rehabbed, I'll cover your mortgage payments, I'll take care of everything. If things seem too good to be true, they probably are."
- U.S. Attorney Stephen Kubiatowski.
Carl Miller and Kenneth Washington previously entered guilty pleas.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.