Ex-Loan Officer Sentenced to More Than 12 Years in Prison for Mortgage Fraud Scheme Involving Dozens of South Side Properties
|U.S. Attorney’s Office May 02, 2013|
CHICAGO—A former loan officer was sentenced today to more than 12 1/2 years in federal prison for engaging in a mortgage fraud scheme involving 65 real estate transactions with properties located mostly in economically depressed neighborhoods on the city’s south side which netted him personally more than $700,000. The defendant, Fred Haywood, worked as a loan officer or processor for several different mortgage brokerages during the scheme, which occurred between 2001 and 2007.
Haywood, 42, of Chicago, was sentenced to 151 months in prison and ordered to pay more than $1.4 million in restitution to various lenders by U.S. District Judge Ronald Guzman. Haywood pleaded guilty in April 2012 to wire fraud.
Haywood was the last to be sentenced among six defendants who were charged in 2008 and 2009 and subsequently pleaded guilty, and his was the longest term of incarceration.
Haywood’s fraudulent acts included qualifying borrowers for loans based on false information submitted to lenders, including false information about their income, assets, employment, intention to occupy the property, and source of down payment. Court records also established that he continued his fraudulent conduct after he was indicted and while on pretrial release.
During the scheme, Haywood and his co-schemers recruited buyers with good credit to purchase properties, knowing at the time that these buyers did not have sufficient income to qualify for mortgages, had no intention of actually living in the properties they were purchasing, and had no intention of fulfilling any long-term payment obligations on the loans they obtained. Instead, he and others recruited the buyers by promising to pay them for acting as nominees and for putting the properties in their names. Haywood knew that the false statements and documents submitted to lenders were material to their decisions to make loans.
The sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Pete Zegarac, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.
The government was represented by Assistant U.S. Attorney Jason Yonan.