Why sell crack when taking money from a careless lender is so much easier and more profitable?
From the San Diego Union Tribune:
Federal prosecutors indicted 24 people in a massive mortgage fraud scheme that they said was led in part by a gang member from San Diego and netted participants $11 million in profits.
In an indictment unsealed yesterday, prosecutors laid out a wide-ranging racketeering conspiracy that ran from 2005 to 2008 and targeted homes across the county. Among the identified leaders was Darnell Bell, a documented member of the Lincoln Park street gang.
Bell, 38, used his status in the gang to recruit other members for the scheme and "maintain discipline," according to the indictment.
The sweeping conspiracy involved almost every element in the real estate transaction chain. The defendants include a real estate broker, a group of straw buyers, an escrow officer, an appraiser, tax preparers and a notary.
Prosecutors allege the network used fake buyers to purchase homes for more than the asking price, with the defendants pocketing the overage. Lenders were duped into funding mortgages for the inflated price and later suffered losses when the buyers walked away and the property was foreclosed.
The value of the properties involved is estimated at $100 million.
I'm wondering if the lenders were also "duped" into lending this $100+ million without income documentation or down payments.
Posted by James Hamilton at April 12, 2009 07:13 AM"