PHILADELPHIA – A local mortgage broker on Thursday was charged in a federal indictment with masterminding a $4-million mortgage fraud scheme he allegedly ran through Police & Fire FCU.
The indictment alleges that John McElroy, 53, entered into at least 13 fraudulent real estate deals in Florida, New Jersey and Pennsylvania by falsifying documents to obtain mortgages and equity payouts on properties.
The real estate deals were financed through a variety of lenders, including Countrywide, IndyMac, Northwest Savings Bank, American Freedom Assurance, Amtrust Bank and Philadelphia’s Police & Fire FCU, where McElroy had an account he used to process the mortgage loan proceeds and pay accomplices, the indictment claims.
McElroy allegedly established fake companies and submitted false claims to obtain funds, but the companies conducted no business and provided no services. Authorities said the transactions, which occurred between December 2006 and September 2008, resulted in losses of more than $4 million to mortgage companies, banks and credit unions.
Prosecutors are seeking $4 million in forfeiture and a money judgment of more than $526,000.
McElroy, who was charged with multiple counts of wire fraud, making false statements on loan applications, money laundering and related offenses, appeared before a federal magistrate yesterday afternoon and was released on house arrest with electronic monitoring.
