The Chicago Police have revealed that they are investigating a mortagage fraud scheme being perpetrated in Chicago, Illinois. The investigation is known as "Operation This Old House." According to police statements, Police discovered that gangs are using real estate transactions to launder money.
"Gang investigators working with the IRS have executed search warrants that uncovered more than 100 fraudulent mortgage [applications] involving more than $70 million," Cline said. Cline said he expected the local U.S. attorney's office to issue indictments stemming from the investigation within months.
Of course, this isn't the first time the industry has seen large scale money laundering. A few years back there was a large fraud in Texas beset by rumors that the mortgage fraud scheme was a money laundering front for the Mexican Mafia. Cash comes out of these deals squeaking.
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.