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April 24, 2014

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Real estate agents among 123 accused in mortgage fraud probe

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Sam Morris / Las Vegas Sun

IRS Criminal Investigation Special Agent in Charge Paul Camacho briefs the media on a nationwide sweep that targeted mortgage fraud across the country Thursday, June 17, 2010. The operation has resulted in 123 people in Southern Nevada being charged, convicted or sentenced in connection with the probe.

Updated Thursday, June 17, 2010 | 6:19 p.m.

A nationwide sweep that targeted mortgage fraud across the country has resulted in 123 people in Southern Nevada being charged, convicted or sentenced in connection with the probe.

The announcement was made Thursday at the Lloyd D. George federal courthouse in downtown Las Vegas. The investigation was dubbed Operation Stolen Dreams.

Authorities said the defendants allegedly engaged in hundreds of “straw buyer” transactions involving hundreds of Las Vegas area properties with a total loss of more than $246 million.

Officials said 73 of the 123 suspects in the case worked in the local real estate industry, including 30 loan officers, 24 real estate agents, six loan processors, five settlement agents, four mortgage brokers, two appraisers and one builder. Charges against 72 of the 123 suspects were filed this week, U.S. Attorney's Office spokeswoman Natalie Collins said.

The Southern Nevada Mortgage Fraud Task Force conducted 25 criminal investigations during the probe.

“Those 25 identified criminal investigations are just the beginning and comprise just a portion of the Mortgage Fraud Task Force’s active case and current work load,” U.S. Attorney for Nevada Daniel G. Bogden said.

Other investigations are expected in the coming months.

"The Southern Nevada Mortgage Fraud Task Force still has hundreds of cases to investigate," said Kevin Favreau, special agent in charge of the Las Vegas FBI office.

Nationwide, the probe has resulted in officials identifying 1,215 defendants resulting in about 500 arrests with alleged losses surpassing $2.3 billion, officials said.

Southern Nevada has been especially hard hit with mortgage fraud.

“Very few of the offices within the FBI have seen as much fraud in the real estate industry as we’ve seen here in Southern Nevada,” Favreau said.

The Greater Las Vegas Association of Realtors released a statement this afternoon praising officials for investigating fraud in the industry and saying its 12,500 members are barred from participating in the kind of schemes alleged by prosecutors.

"We support and cooperate with such efforts by local, state and federal regulators and law enforcement agencies to aggressively investigate and prosecute anyone in the real estate industry suspected of fraud," association President Rick Shelton said in the statement. "The fraudulent activities alleged by the Southern Nevada Fraud Task Force are harmful to homeowners, law-abiding members of the real estate industry and the public at large. GLVAR members receive the highest level of professional training and must abide by a strict code of ethics that prohibits such behavior."

While this nationwide effort to stop mortgage fraud began March 1, the local task force was formed in 2008 after the FBI noticed an increase in the number of complaints during the summer of 2007, Favreau said.

When home prices began to fall in Southern Nevada, it became more difficult for criminals to carry out their scams, officials said.

FBI Supervisory Special Agent Scott Hunter said many of the homes involved in the scams eventually went into foreclosure.

“They used these houses kind of like ATMs,” Hunter said of the alleged scammers. “They took as much money out of them as they could, and when they were done taking the money out they left it and basically left Southern Nevada in a wreckage.”

The alleged fraud artificially inflated home values in neighborhoods where the scams took place, leading to innocent homebuyers overpaying and having a higher chance of foreclosure when the economic hardships hit, Hunter said.

Agencies that participated in the Nevada probe include the FBI, the U.S. Housing and Urban Development Office of the Inspector General, the U.S. Postal Inspection Service, the Secret Service, the IRS Criminal Investigation unit, the Social Security Administration’s Office of the Inspector General and Metro Police.

Anyone with information about mortgage crimes can contact the task force at (702) 584-5555.

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