Real-Life Examples of Mortgage Fraud Cases
In our previous blog, “Is Mortgage Fraud a Felony?” we gave a brief overview of what is considered mortgage fraud and the types of mortgage fraud that are commonly committed. In this blog, we will discuss mortgage fraud case examples that have occurred within the past few years.
Eric Hill | Mortgage & Real Estate Commission Fraud
Eric Hill is a real estate agent in Atlanta, GA. In early 2022, he was sentenced for participating in a mortgage fraud scheme that grossed over $21 million in fraudulent mortgage loans. Most of the fraudulent loans were also insured by the Federal Housing Administration (FHA), which also lead to over $850,000 in paid claims for defaulted mortgage loans. Hill also reportedly defrauded his employer for over $480,000 for real estate commissions.
Eric Hill and Robert Kelske were real estate agents, and they reportedly helped hundreds of homebuyers purchase homes even if they were unqualified by committing fraud. Specifically, they coached the homebuyers concerning what types of assets they should claim to have as well as what employment and income they should include on the application.
Hill and Kelske worked with the other defendants, who were document fabricators, to alter their buyer’s bank statements and other financial documents. The document fabricators not only increased the assets in buyers’ bank statements but also:
- Created fake bank entries that reflected false direct deposits from employers (that Hill and Kelske selected).
- Created fake earnings statements to match the falsified bank deposit information.
Other defendants also acted as employers and fielded calls and emails from lenders to very the false information in the buyers’ applications. Hill and Kelske also worked with Anthony Richard and Cephus Chapman, who are also real estate agents; they falsely claimed to represent buyers to receive a commission from the sale; however, they never worked with any of the homebuyers they claimed to represent.
The agents would tell the closing attorney they were unavailable for the home closing and would include their bank information and wire instructions for their commission. When they received the commission, they would give a large portion of the commission to Hill and Kelske for adding them to the deal.
Hill pled guilty and was sentenced to two and a half years in prison as well as three years of supervised release. His co-conspirators have also been charged and sentenced for their roles in the fraud.
George Kritopoulos | Decade-Long Mortgage Fraud Plot
George Kritopoulos, a resident of Salem, MA, was convicted on May 27, 2022, for his involvement in a 10-year mortgage fraud plot that accounted for at least two dozen fake loan transactions totaling $6.5 million and $3.8 million in mortgage lender losses.
Kritopoulos along with co-conspirators, Joseph Bates II and David Plunkett, defrauded banks and other financial institutions from 2006 to 2015. They submitted false information to those institutions on behalf of borrowers that were recruited to purchase properties in Salem—typically multi-family buildings with two to four units that were converted into condos by the co-conspirators. Kritopoulos recruited the borrowers to purchase individual units, which were then financed by mortgage loans also obtained by fraud.
The false information submitted to lenders included falsified information concerning the borrowers’:
- Intent to occupy the property
Many of the false employment information claimed that the applicants were employees of shell companies that Kritopoulos supposedly owned and significantly inflated their income based on fake information concerning their wages. As the borrowers did not have incomes that could support repaying the home loans, 19 out of 21 borrowers defaulted on their payments.
While under investigation, Kritopoulos asked Bates and Plunkett to make false statements and false documents to make the shell companies seem more legitimate, which is why he was charged with obstruction. However, in the end, Bates and Plunkett pled guilty for their part of the mortgage fraud schemes.
Kritopoulos was convicted of:
- one count of conspiracy,
- two counts of wire fraud,
- six counts of bank fraud,
- one count of obstruction of justice, and
- one count of aiding the preparation of a false income tax return.
The penalties for each of these offenses are serious, and the breakdown of the specific penalties is as follows:
- Bank and wire fraud each carry a penalty of up to 30 years in prison and five years of supervised release (for each count).
- Conspiracy carries a penalty of up to five years in prison and three years of supervised release.
- Obstruction of justice carries a penalty of up to 20 years in prison and five years of supervised release.
- Aiding in the preparation of false tax returns carries a penalty of up to three years in prison and a year of supervised release.
All the aforementioned charges also require those convicted to pay a fine of $250,000 or twice the amount of gross gain or loss depending on whichever is greater.
$10 Million Mortgage Fraud & Identity Theft Case
Six South Floridians and one New Jersey resident were sent to federal prison for their role in a fraud scheme that included creating and using fake passports, stealing identities, impersonating homeowners, and falsifying loan documents. The goal of the fraud was to convince lenders to provide millions of dollars of loans on unencumbered residential properties, and the defendants gained nearly $10 million of home equity.
According to information from the Department of Justice (DOJ), the scheme started with the defendants identifying residential homes with no mortgage and absent owners in high-end South Florida neighborhoods. Then, using the true homeowner’s information, they created foreign passports with images of the defendants and co-conspirators. The fake passports were used to apply for mortgage loans from private lenders and to open bank accounts in the real homeowners’ names, and when the loans were approved, the money was sent to these accounts.
Each of the seven defendants was sentenced to prison:
- Alejandro Boada Oliveros was sentenced to 46 months.
- Carlos Rafael Castaneda Mendez was sentenced to 78 months.
- Isbel Rodriguez Batista was sentenced to 30 months.
- Jonnathan Jesus Gonzalez was sentenced to 44 months.
- Katherine Hansen Mendoza was sentenced to seven months.
- Lilia Rosa Morales Moreno was sentenced to 30 months.
- Yanjeisis Alejandra Pompa Villafane was sentenced to 28 months.
Hubbs Law Firm is equipped to help you or a loved one build a solid defense case if you have been charged with committing mortgage fraud. Backed by decades of legal experience, our attorneys have a proven track record of success and are known for their negotiation and trial skills.
Call (305) 570-4802 or complete our online contact form to schedule a consultation today.