Nine indicted in $11 mln Missouri mortgage fraud

KANSAS CITY (BestGrowthStock) – A Kansas City-area mortgage loan officer and an area real estate agent were among nine people indicted in an $11 million mortgage fraud scheme that involved a network of fictitious businesses and straw buyers, authorities said on Monday.

The scheme ran for about a year, starting in 2005, and caused mortgage lenders to loan $11.1 million on 16 residential properties in several Missouri communities.

The sale prices for the properties were illegally inflated and more than $2 million was paid to buyers solicited to help in the conspiracy, U.S. Attorney Beth Phillips said.

According to the indictment, the defendants submitted fraudulent mortgage applications seeking loans in excess of the actual sales prices. In order to divert the loan proceeds without the lenders’ knowledge, the buyers created fictitious businesses that issued false invoices that claimed the businesses had provided work and services for which they were entitled to receive loan proceeds.

Those indicted were: real estate agent Leann Turner of Blue Springs, Mo.; Bruce Williams, a mortgage loan officer from Kansas City, Kan.; Anthony Hicks, a mortgage loan officer from Little Rock, Ark.; real estate agent Zelda Jackson of Newbury Park, Calif.; broker Carole Colson of Lake Worth, Fla.; and buyers Mark P. Billey of Buena Park, Calif.; and James Nash, Arman Nshanian, and Linda Johnson, all of Corona, Calif.

The nine were charged in a 35-count indictment returned by a federal grand jury in Kansas City, Mo., on November 19.

The latest indictment is part of a wave of mortgage fraud cases around the United States in recent years.

Suspicious activity reports related to mortgage fraud rose 5 percent to more than 67,000 in 2009, according to a report issued in June by the U.S. Federal Bureau of Investigation. In the first quarter of 2010, the number of reports hit nearly 38,000.

(Reporting by Carey Gillam; Editing by Jerry Norton)

Nine indicted in $11 mln Missouri mortgage fraud