Real Estate Agent Bilks Lenders out of $3.3
Steven Carver, Carver and Associates Real Estate, Minnetonka, Minnesota, orchestrated an elaborate mortgage kickback scheme that cost lenders $3.3 million and put more than 18 homes into foreclosure or short sale.
Allegations against Steven Carver are the latest in a string of enforcement actions taken in response to a growing trend of mortgage fraud. Mortgage fraud accounts for roughly $10 billion in annual losses.
Common mortgage frauds include: inflated appraisals, stolen identities, false loan applications, fraudulent supporting loan documentation, and kickbacks similar to those allegedly used by Carver.
According to allegations in the statement of charges, on 18 separate occasions Carver arranged real estate transactions at inflated prices totaling nearly $6 million in fraudulent mortgages.
In each instance, Carver allegedly arranged purchase agreements for tens of thousands of dollars more than each home was worth, delivered undisclosed kickbacks from loan proceeds to the buyers, and collected tens of thousands of dollars in inflated commissions for himself.
Charges against Carver – who was a licensed real estate broker in Minnesota – include allegations that he bundled multiple home purchases to obstruct lenders from making informed lending decisions. The Statement of Charges also alleges that Carver omitted information on loan documents in order to mislead lenders, using creative provisions like rent guarantees or carry-back loans to camouflage kickback payments.
In one complaint, Carver allegedly brokered purchases for $40,000 to $60,000 above the fair market value in the purchase of six homes, which resulted in a commission for Carver exceeding $41,000 and kickbacks totaling more than $155,000. All of the properties ultimately ended up in foreclosure or short sales.
Minnesota Department of Commerce investigators attempted to speak with Carver in June 2011 regarding these allegations, but were subsequently notified that he had left the state and would be leaving the country within days to sail around the ocean for "a couple of years." Suspicious of Carver's story, Department investigators visited his Minnetonka residence and found him cleaning the swimming pool in his backyard, roughly 1,200 miles from the Georgia location he had reportedly called from.
Steven Carver and Carver and Associates Real Estate were notified that a prehearing conference on the case will be held at the Office of Administrative Hearings on February 16, 2012 at 1:00 p.m.
The Minnesota Department of Commerce is continuing its efforts to root out mortgage fraud in a troubled real estate market. Commissioner Mike Rothman issued the statement of charges.
"This was a deliberate, carefully-orchestrated scheme designed for one purpose: to fraudulently rake in thousands of dollars under the table," said Commissioner Rothman. "Mortgage fraud is not a victimless crime. It hurts homeowners, businesses, our neighborhoods, and our economy. That is why the Commerce Department will not relent in our efforts to snuff out fraud and ensure all Minnesota consumers are treated fairly under the law."
"The economic recession and depressed home values have created the perfect storm for mortgage fraud and other real estate scams in Minnesota," said Commissioner Rothman. "Our Enforcement Division has been vigilant in taking swift and definitive action against scam artists who take advantage of consumers. We are focused on weeding out bad actors, and restoring trust and stability in the real estate market."
Modify My Loan US, LLC
The Commerce Department took additional action in another alleged mortgage fraud scheme. On January 18, 2012, Commissioner Rothman delivered a consent order to Mark Abdel, minority owner of Eden Prairie-based Modify My Loan US, LLC. In the order, the commissioner ordered that Abdel pay a $25,000 civil penalty and be barred from engaging in any further mortgage origination activity in Minnesota. Up to $10,000 of Abdel's civil penalty would be stayed under conditions outlined by the commissioner.
In August 2011, the Department of Commerce issued a statement of charges alleging Modify My Loan US, LLC and its owners defrauded approximately 200 homeowners, charging consumers more than $362,000 in up-front fees. Allegations against the company included: operating in Minnesota without a license; using false advertising; failing to disclose to customers its precarious financial condition; charging fees for loan modification services which were ultimately not provided; and failing to make promised refunds.
Courtesy Mortgage Fraud Blog