Eleven defendants, including five licensed loan originators, have been indicted for a mortgage fraud scheme that cost lenders $8 million.
Between August 2004 and October 2012, the defendants allegedly plotted to fraudulently obtain at least $14.5 million in residential mortgage loans from lenders JPMorgan Chase (JPM), First Franklin Financial Corp., Franklin First Financial, Village Capital & Investment, United Wholesale Mortgage and RBS Citizens Bank. Ten defendants were indicted Tuesday in the United States District Court in Chicago.
Led by alleged ringleader Keith Austin, who owned real estate companies Icy Investments and Kesha & Icy Investments, the scam involved persuading straw buyers to submit falsified financial documents in order to receive loans to purchase Chicago-area properties. Five of the defendants, including Austin, also persuaded homeowners to tell lenders they were selling their homes at falsely inflated prices. The defendants then reaped the proceeds from the loans, distributing the money among themselves and others.
The con ultimately cost lenders $8 million when they could not fully recover the loans through foreclosures and property sales.
Austin was charged with six counts of wire fraud, three counts of bank fraud, one count of aggravated identity theft and one count of obstruction of justice. Nine alleged co-conspirators were variously charged with counts of wire fraud and bank fraud.
The indictment also seeks forfeiture of more than $8 million from Austin and four other defendants, as well as $6,800 seized from Austin's home and Austin's 2007 Lexus.
Brandie Roberts, a former closing agent for a title company who was also allegedly involved in the scheme, was separately indicted on two counts of wire fraud. Her indictment seeks forfeiture of at least $68,366.
All eleven defendants will arraigned on dates yet to be determined, according to a Wednesday press release from the U.S. Attorney's office.