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mortgage fraud- money laundering - offshore shipment scam continues (now going worldwide!)

...and again, something in this story jumps right out at me:

snip...

"...A former Philadelphia resident who spent some of his time in a federal prison in Georgia concocting a scheme to defraud Cendant Mortgage Corp. of $2 million was indicted Tuesday by a federal grand jury in Camden.
Reginald Greene, 47, known as "Amin," was indicted on charges of wire fraud and money laundering. Also indicted on money laundering charges was Michael Umali, 38, known as "Khadafi," a resident of Oxen Hills, Md.

The pair had met in the federal prison system and worked with a Cendant employee, not named in the indictment, to arrange the wire transfers of cash to cover 15 purchases of residential properties, according to the indictment. Closings of the properties were all scheduled for Sunbelt Title Company in Miami, Fla.

end snip...

More details here.

I cant quite put my finger on it, but something in that story just sort of jumps right out at me...

Oh, and its not like were alone in the US with a sudden outbreak of 'mortgage fraud'. Like all things truly modern, its a "global phenomenon":

snip...

More ambitious fraudsters appear to have taken out multiple mortgages and walked away with the cash, and the scam has been mimicked here.

Persimmon sold apartments in one of its Thamesmead developments to a property developer, Atrex, at a deep discount. Atrex is then believed to have created false identities to borrow from lenders at inflated prices, and then pocketed the difference.

In other cases, it is believed to have used “mortgage mules” ? genuine people, but who had no connection with the properties in question. A&L has since ordered its surveyors to make more stringent checks amid fears that genuine buyers in new-build developments could be left stranded in negative equity with loans worth more than their properties because they have been forced to pay inflated prices for flats.
snip...

“The investigation has established that between May and November last year, a company bought 84 off-plan new-build flats in Thamesmead. The company then resold the flats at greatly inflated prices using mortgage brokers and chartered accountants to fraudulently provide inaccurate mortgage applications for the genuine buyers. In most cases the buyers would not otherwise have qualified for a mortgage.

“The fraud came to light following reports from banks and building societies when either the properties came to be sold or repossessed and the true property value was realised by the lender. The full loss to the lenders cannot be ascertained but the benefit to the conspirators is estimated in the region of £3m-£4m. The investigation is ongoing and arrests have been made.”

A spokesman for Persimmon admitted selling to Atrex, but said it had made the necessary checks.

“We have developments across the region that attract interest from both private and buy-to-let investors and at the Pinnacles in Thamesmead we sold approximately 40% of the apartments to a single property company, Atrex Property Company Limited,” the spokesman said.

“It is not our policy to discriminate against any purchaser wishing to buy the property within an expected time-scale from the date of the reservation. The formal procedure that we require is a money-laundering identity check.

“We meet our legal requirements but are always reviewing our procedures to ensure they are as effective as they possibly can be.”

end snippage...

One of the things about globalization that we didnt think of is how a scam, once perpetrated, can travel half way around the globe before the local market has any idea that its underway.

UPDATE: Welcome Pajame-hedeen! The story has been going on for awhile, and was first noticed by this blog as the great "pot house" story of 2006. This story, and its trail seems to be just the start of what has become known as the great sub-prime mortgage collapse.

The news updates on the radio every 15 minutes are telling you that your neighbors are foreclosing on their homes at a huge increasing rate. What's really going on is that people( in my opinion, organized crime and yes, even Jihadists) have been scamming banks on a gobal basis, taking advantage of what can only be called crappy unethical banking practices that are none too interested in looking closely at the paperwork on these deals and their partners in shady real estate practices across the western world.

"mortgage mules"? Just remember, you heard the term used here first...

Posted @ August 22, 2007 08:02 AM | Current Affairs