David Saks: Seven Arraigned In Illinois for Mortgage Fraud Scheme

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Seven Arraigned In Illinois for Mortgage Fraud Scheme

                                                Seven Arraigned for Mortgage Fraud Scheme

The following individuals were arraigned:

Gayle Tracy, 50, Batavia, Illinois, faces 12 charges: 3 counts each of Conspiracy to Commit a Financial Crime and Financial Institution Fraud; 2 counts each of Organizer of a Continuing Financial Crimes Enterprise and Theft by Deception; and 1 count each of Continuing Financial Crimes Enterprise and Money Laundering.

Brent Bickhaus, 50, Niles, Illinois, faces 1 count each of Conspiracy to Commit a Financial Crime, Financial Institution Fraud and Money Laundering.

Richard Simmons, 31, Chicago, Illinois, faces 11 charges: 3 counts each of Conspiracy to Commit a Financial Crime and Financial Institution Fraud; 2 counts of Theft by Deception; and 1 count each of Continuing a Financial Crimes Enterprise, Money Laundering and State Benefit Fraud.

Lorenzo Crooks, 38, Chicago, Illinois, faces 9 charges: 3 counts each of Conspiracy to Commit a Financial Crime and Financial Institution Fraud; 2 counts of Theft by Deception; and 1 count of Continuing Financial Crimes Enterprise.

Frances McCormick, 64, Country Club Hills, Illinois, faces 6 charges: 2 counts each of Conspiracy to Commit a Financial Crime and Financial Institution Fraud and 1 count each of Theft by Deception and Money Laundering.

Catherine Denwood, 42, Naperville, Illinois, faces 1 count each of Theft by Deception, Conspiracy to Commit a Financial Crime and Financial Institution Fraud.

Mark Schwarzbach, 43, Wayne, Illinois, is charged with 1 count each of Financial Institution Fraud and Money Laundering.

Seven individuals from the suburbs and Chicago are facing mortgage fraud related charges for their participation in an elaborate mortgage fraud scheme that centered around three different residential properties in Chicago's Englewood and Back of the Yards neighborhoods.

According to prosecutors, the defendants are alleged to have devised a scheme to induce lenders into providing funding for real estate transactions. The defendants then split the proceeds from the sales of these properties through a series of complex financial transactions. The defendants face charges that include money laundering, theft by deception and conspiracy to commit a financial crime.

According to prosecutors, Denwood and McCormick would pose as straw buyers of properties controlled through a trust by Bickhaus and Tracy. Crooks would then help Denwood and McCormick prepare fake loan application documents which Crooks would then submit to legitimate lenders. Throughout the process, Simmons acted as a real estate agent, bringing all parties together. Simmons, however, does not hold a real estate license. Schwarzbach conducted closings, receiving kickbacks in addition to his normal closing fees.

After the closings, the proceeds from the sales were split among the defendants. The buyer, Denwood or McCormick, would never make a payment on the loan. The fraudulent real estate transactions occurred in April, June and October of 2010. In all, the defendants split proceeds of approximately $750,000 from the three transactions.

All seven individuals were arrested on April 28, 2011. Bonds were set by Judge Domencia Stephenson, who ordered defendants to surrender their passports and to provide proof the money they are using as bond is from legitimate sources and not the proceeds of this scheme.

Bond was set at $75,000 for Bickhaus, Schwarzbach and Denwood; $100,000 for Crooks, Simmons and McCormick; and $200,000 for Tracy. All the defendants pled not guilty before Judge James Linn. Schwarzbach has a next court date of June 30 and all the other defendants are due in court July 12, 2011.

The Office of Cook County State's Attorney Anita Alvarez announced the charges.

State's Attorney Alvarez thanked the U.S. Department of Housing and Urban Development, Office of Inspector General, U.S. Marshal's Great Lakes Task Force, and the Cook County Sheriff's Police Fugitive Unit for their efforts and assistance, as well as Assistant State's Attorneys Deidre Dyer and Matthew Jannusch of the Mortgage Fraud Unit for their handling of this case.

The public is reminded that charging documents contain allegations that are not evidence of guilt. The defendant is entitled to a fair trial at which the state has the burden of proving guilty beyond a reasonable doubt.

Thanks Rachel & Mortgage Fraud Blog




David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • June 15 2011 05:46PM

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