Industry News

Ex-police officer sentenced, fined $1.1 million for mortgage fraud

Indianapolis case involved 15 people, 99 fraudulent loans

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A former Indianapolis police officer who moonlighted as an appraiser was sentenced to 57 months in federal prison Wednesday and ordered to pay $1.1 million in restitution after he was convicted of conspiracy, money laundering and wire fraud charges related to inflated mortgage loans. Michael C. Smith, 45, who was fired from the police department after a jury convicted him in September, was one of three people sentenced this week in two mortgage fraud schemes in which 15 people have been sentenced to federal prison. The schemes involved mortgage brokerages Quantum Investments and American Savings Mortgage, which used inflated appraisals to obtain loans on properties in excess of their true value, prosecutors said. Prosecutors have said American Savings Mortgage obtained financing for residential properties in Indiana cities including Indianapolis, Marion, Fairmount, Kokomo and Anderson, generating 99 fraudulent loans that resulted in losses of $3.4 million. Kenneth McKinney, 40, p...