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Current Indiana Mortgage News
Legislative Update: Indiana Requires Cautionary
Notice for Borrowers in Foreclosure
Indiana passed a bill
requiring that a cautionary notice be provided to a borrower at the time
a foreclosure proceeding is commenced. The notice warns a borrower to be
careful of persons who offer to "save" the home from foreclosure. The
bill becomes effective July 1, 2007.
Legislative Update: Licensing and Registration
Requirements Amended
House Bill 1717.
Indiana passed a bill making several changes to the licensing and
registration requirements of the Loan Brokers Act. Among the changes:
loan brokers must employ a registered principal manager at each office
location; all originators, principal managers, and ultimate equitable
owners of a loan broker must submit to criminal background checks; and
certain entities exempt from licensing must file a notification with the
Securities Commissioner. In addition to changes affecting licensing and
registration requirements, amendments were also made to various other
provisions of the Act. The bill becomes effective July 1, 2007; however,
companies doing business in Indiana prior to the effective date of the
bill have until January 1, 2008 and/or July 1, 2008 to comply with the
new provisions.
Broker is
Indicted on Mortgage Fraud Charges 05/2007
Justin L. Stuckey, 34,
Fort Wayne, is charged in a five count Indictment with wire
fraud for acts which occurred April 17, 2002, through June 21,
2002. Stuckey owned and operated Maximum Mortgage, a
mortgage brokerage company doing business in Fort Wayne. Maximum
Mortgage obtained financing for the purchase of real estate in
Fort Wayne from various mortgage lenders including ABN AMRO
based in Ann Arbor, MI. Alliance Property
Management is a property management company that manages
numerous rental properties in Fort Wayne.
According to the
Indictment, Stuckey caused loan
applications to be submitted to ABN AMRO through its “FLY”
program, (a program where little documentation is required and
brokers essentially approve their own loans) based on fraudulent
information and misrepresentations.
Stuckey introduced two
individuals (whose names were withheld from the indictment)
wanting to purchase rental properties to the owner of Alliance
Property Management. The defendant told them that he was the
only person that could get them the financing they needed in
order to purchase the number of rental properties they wanted.
Alliance Property gave
the two individuals a list of properties and told them to pick
out some properties they thought that they would be interested
in purchasing. Over the course of 3 closings, one of
the individuals eventually purchased 28 individual properties.
Stuckey submitted
applications and obtained mortgage loans on the above properties
by making significant misrepresentations about the individual’s
rental-ownership history, among other things. The total cost
for the above properties was $2,158,000.00.
Indiana
Builder Sentenced for Loan Fraud 04/2007
Eric H. Tauer,
53, Hendricks County, Indiana, was sentenced to seventy-eight
months imprisonment for money laundering and fraud charges in
federal court in Indianapolis, Indiana.
Tauer was
indicted by a federal grand jury on February 16, 2005, for ten
counts of bank fraud, two counts of money laundering and one
count of conspiracy. The charges were in connection with the
defendant’s operation of an extensive real estate business in
Hendricks County, Indiana which consisted of sub-division
development, real estate sales and home construction. In 1998
Tauer was operating a home construction business under the name
Royal Haven Builders, Inc., building several homes per year,
principally in the Avon area of Indiana. In addition to
building homes, he also owned some of the sub-divisions where he
was constructing homes. The defendant found that his real estate
development and home construction business required funding
beyond what he was able to raise through bank financing or
investor financing and by 1998 he was engaged in check kiting
and bank loan schemes.
Tauer reached a
plea agreement with the government, which was filed on July 28,
2006. Pursuant to that agreement, he plead guilty to one count
of bank fraud involving the check kiting and the conspiracy
charge which involved a loan fraud scheme.
The defendant
entered his plea of guilty to those two charges on September 20,
2006, and sentencing was withheld pending Tauer‘s continued
cooperation with the government, which included testimony as
needed before a grand jury and his testimony at the trial of a
co-defendant.
The court
sentenced Tauer in accordance with the plea agreement to
concurrent terms of 78 months imprisonment on the bank fraud
count and 60 months on the conspiracy count of the indictment.
The defendant was also sentenced to 5 years of supervised
release which commences at the time of the defendant’s release
from prison. The Court ordered restitution in the amount of
$9,069,057.89, which is mandatory. The court stated that due to
Tauer‘s financial condition, it would not impose a fine. The
defendant will be permitted to voluntarily surrender to a
facility to be designated by the U.S. Bureau of Prisons.
Second
Indianapolis Man Sentenced in Promised Land Mortgage Fraud
Flipping Case 02/2007
John Wagner, 46,
Indianapolis, was sentenced to 37 months following his guilty
pleas to conspiracy to commit mail fraud and money laundering.
From late 2000 to early
2002, Romero Brice (who was sentenced on February 20 to 87 months in
prison) was the owner of Promised Land Mortgage. Brice fraudulently
obtained over $4,000,000.00 in loans from ABN-AMRO by submitting false
loan applications, fraudulent financial documents, and falsely inflated
appraisals for the purpose of obtaining mortgage loans. Brice located
and obtained at fair market value properties in low income neighborhoods
of Indianapolis. He then used “investors” to repurchase the
properties a very short time later at 3-4 times their fair market value.
John Wagner was Brice’s
main recruiter of investors. Wagner recruited numerous individuals to
participate in the scheme, many of whom were relatives. Wagner also
held investor meetings at the business office he set up to perpetuate
this scheme, and gave presentations to investors to convince them to
participate in the scheme. Wagner set up a company called Family
Connections LLC, which was used by him to participate in and perpetuate
the scheme.
The investors were
encouraged by Wagner to buy 3-4 properties at a time, for “no money
down.” They were given $10,000.00 per property back at closing by Brice.
Wagner was generally given $1,000.00-2,000.00 by Brice to locate and
bring in the investors. Wagner was also instrumental in obtaining the
false down payment monies “fronted” for the second sales; Wagner
instructed investors to provide these monies, explaining that they were
helping other investors by loaning them money to purchase properties.
The investors who provided the down payments received their fronted down
payment plus $500.00 back at closing; Wagner sometimes received
additional monies from Brice subsequent to closing for obtaining the
down payment monies. In addition, Wagner provided the upfront money for
the first (cash) sales on some occasions. After the second closing,
Wagner received this money back, plus several thousand dollars per
property for providing the money.
All of the fraudulent
mortgages were obtained thru ABN-AMRO, a Michigan lender. Brice
submitted false loan packages to the lender to obtain the mortgages.
Along with the fraudulent appraisals, the loan packages included false
loan applications, showing that the investors had assets and bank
account balances far in excess of what they had. ABN-AMRO approved and
financed at least eighty-three loans, based upon the false documents
submitted by Brice. Wagner was directly involved in fifty-three of the
eighty-three loans obtained by Brice. The total amount of those 53
loans was approximately $2,666,400.00. The total amount of loss suffered
by ABN-AMRO on these 53 loans was approximately $1,753,600.00.
Wagner will be required
to serve 2 years supervised release following his release from
imprisonment. Wagner was also ordered to make restitution in the amount
of $1,753,600.00.
Charged with Mortgage
Fraud and ID Theft 02/2007
Erick Ramon Anderson, 30,
Indianapolis, Indiana, was indicted for 7 counts of identity theft and 4
counts of bank fraud.
The indictment alleges that
Anderson purchased five Indianapolis, Indiana properties and obtained or
attempted to obtain two vehicle loans using the personal identifiers of
three men, including their social security numbers. These men do not
know Anderson and had not given permission for him to do this. The
indictment additionally alleges that Anderson committed bank fraud by
depositing $13,800 in funds from four different checks purportedly
authorized by a fourth man into an account that Anderson controlled.
The fourth man gave no such authority.
Anderson faces a maximum
possible prison sentence of up to 15 years on each count of identity
theft and a maximum possible fine of $250,000 for each count. Anderson
faces an additional possible prison sentence of up to 30 years for each
count of bank fraud charged in the indictment, and a maximum possible
fine of $250,000 for each of those counts.
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