Ringleader Sentenced for Scam Involving Inflated Appraisals
Robert Alexander, 36, Phoenix, Arizona, was sentenced to 30 months in prison by U.S. District Court Judge James A. Teilborg on Feb. 29, 2012. Alexander, a real estate agent, represented buyers who purchased multiple homes with loan applications containing false information and concealing from the lenders "kick backs" to the buyers. Alexander pleaded guilty to Conspiracy to Commit Wire Fraud. One other co-conspirator has pleaded guilty for his involvement in the conspiracy.
As previously reported by Mortgage Fraud Blog, between Sept. 2005 and Aug. 2006, Alexander found sellers of distressed properties and offered to pay more than the asking price for those properties. He then obtained inflated appraisals to support the higher offers and the resulting loan amounts. To further the scheme, Alexander recruited buyers that he knew would not be qualified to purchase multiple homes, and then facilitated the submission of loan applications containing false information for those buyers. At closing, Alexander instructed the escrow officer to disburse monies to third party entities. Alexander obtained both a commission and, in many cases, a bonus from the fraudulent
transactions. The conspiracy involved as many as 44 homes that went into foreclosure resulting in estimated losses of $2,500,000.
Ann Birmingham Scheel, Acting U.S. Attorney for the District of Arizona, highlighted the significance of this sentence by stating, "Mortgage fraud has destroyed property values, lending institutions, and entire neighborhoods in our community. It has resulted in the loss of tax revenues and jobs. To those who engage in mortgage fraud--particularly real estate industry professionals in whom the public places trust-- you can expect to be prosecuted."
"Mortgage fraud has been a major factor in the demise of our real estate market in Arizona," said Dawn Mertz, Special Agent in Charge, Internal Revenue Service, Criminal Investigation. "IRS Special Agents will continue to use our financial expertise to aggressively pursue those individuals involved in these crimes."
The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigations Division. The prosecution is being handled by Kevin M. Rapp Assistant U.S. Attorney, District of Arizona, Phoenix.
Courtesy Mortgage Fraud Blog