Twenty-one people were indicted in Georgia in connection with an alleged multimillion-dollar fraud scheme, media reports said Monday.
The U.S. Attorney for the Northern District of Georgia unsealed a superseding grand jury indictment charging 21 individuals in an alleged complicated mortgage fraud scheme said to have operated between June 2004 and April 18, 2006, reports said.
The indictment includes 99 counts, including bank fraud, wire fraud, mail fraud, conspiracy, money laundering and identity document fraud, according to reports.
The case was initially instituted on April 22, 2005, with a magistrate complaint against Virginia Rose Novrit, an alleged straw borrower who was accused of having attempted to obtain more than $6.6 million in mortgages for which she was not qualified, reports said.
On July 5, 2005, a 20-count indictment was filed charging Novrit and her boyfriend, Clarence Lorenzo Davis, aka C. Dave Davis, who is accused of falsely verifying employment for Novrit through his company. The superseding indictment naming the additional 19 defendants was filed under seal by the U.S. Attorney on April 19.
According to the indictment, the defendants would recruit “straw borrowers,” including illegal aliens, to purchase residential properties from builders and others, often at fraudulently inflated prices, reports said.
The “straw borrowers” would then obtain artificially inflated appraisals to support the purchase prices, often hundreds of thousands of dollars over the list prices, the indictment alleged, according to reports.
The defendants would then obtain fraudulently inflated mortgage loans in the names of the unqualified straw borrowers with the excess loan proceeds to be disbursed to the straw borrowers, their recruiters, those fronting borrower down payments, the builders and other sellers, according to the legal papers, reports said.
The loan applications allegedly contained misrepresentations regarding borrower employment, income, assets, liabilities and/or intent to occupy, reports said.
Down-payment information was also allegedly misrepresented, as down payments were either made by way of cashier’s checks drawn from loan proceeds disbursed at closing or by way of loan from a co-conspirator, the legal papers alleged, according to reports.
Shell companies were also utilized to funnel loan proceeds to recruiters, straw borrowers, those fronting down payments and other co-conspirators, the legal papers alleged.
According to the indictment, some of the straw borrowers were told that the mortgages, insurance and taxes would be paid for them and that they would make additional money when the properties were sold, reports said.