Seven men and one woman were arrested on suspicion of having provided forged documents to purchase FHA insured homes. The defendants are believed to have purchased homes using fraudulent citizenship and/or financial documentation. Those arrested include:
Edgar De La Rosa
Manuel Barron
Adela Hernandez
Ruben Martinez
Ventura Moreno
Manuel Jilenez-Galindo
Arturo Flores
Inocencio Landa-Madera
The homes were sold by participants of a mortgage fraud ring operating in Jefferson County, Colorado. Between July and September 2005, ten people were indicted as part of that operation. They were doing business out of the ReMax 100 office in Lakewood, Colorado. In three separate indictments, the alleged illegal activity was the same: real estate agents, loan officers and sales agents were accused of working together to sell single-family homes to 256 persons who, because of their citizenship and/or financial circumstances, were not qualified for home loans.
According to the indictments, the defendants in the mortgage fraud ring were able to obtain loans for the unqualified buyers by creating false documents concerning the homebuyer’s identity, employment and credit history, showing that the unqualified homebuyers were in the US legally, and then submitting these false documents to legitimate mortgage lenders. They each earned commissions or other financial remuneration for each of the fraudulent house sales.
Colorado District Attorney Scott Storey says, “The illegal activities involved in the sale and the purchase of these homes constitutes identity theft as well as mortgage fraud. All of the social security numbers used in these transactions belong to actual people. It is our job as protectors of the public trust to hold anyone who breaks the law accountable for their conduct.”
"To combat this type of crime, it's critical that agencies work together to share information on such schemes as this," said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. "ICE has created a local Document and Benefit Fraud Task Force composed of various agencies for this very purpose. It's vital that the people who receive any such government benefit are positively identified. Otherwise, it's the American taxpayer who may be required to pick up the tab for defaulted loans." Copp heads a four-state area which includes: Colorado, Wyoming, Montana and Idaho.
All of the 191 houses involved were purchased using HUD-guaranteed loans. "This action is evidence of our continuing commitment to make sure HUD's programs are administered in accordance with the law and are free from fraud and abuse. I would like to complement the staff at our Denver Homeownership Center who uncovered this abuse," said Jereon Brown, HUD Deputy Assistant Secretary. "As much as we intend to expand the FHA program to help more families become homeowners, we will not do so at the expense of the financial integrity or reputation of the Federal Housing Administration."
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.