Industry News

Three convicted in Indianapolis mortgage fraud ring

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

ABN AMRO Mortgage Group lost $2.7 million by making 83 loans to a mortgage fraud ring that bought homes in low-income Indianapolis neighborhoods and then paid straw buyers to purchase them at three to four times their fair market value.

Three people have been convicted in the case and sentenced to prison, including a mortgage broker and an appraiser.

Romero Brice, 37, the owner of Promise Land Mortgage, was sentenced Tuesday to seven years and three months in prison after pleading guilty to conspiracy to commit mail fraud and money laundering. Brice was also ordered to pay $2.6 million in restitution.

John Wagner, 46, who allegedly recruited buyers for Brice, was sentenced Friday to three years and 1 month imprisonment after pleading guilty to conspiracy to commit mail fraud and money laundering. Wagner, who prosecutors said was directly involved in 53 of the 83 loans obtained by Brice, was ordered to pay $1.7 million in restitution.

Appraiser James Spicer was convicted of preparing false appraisals on the properties, Susan W. Brooks, United States attorney for the Southern District of Indiana, said in a statement. Spicer, who also pleaded guilty to playing a similar role in another mortgage fraud ring, was sentenced Nov. 22 to two years and six months in prison and ordered to pay restitution of $4.9 million.

According to prosecutors, Brice encouraged investors to buy several properties at a time for no money down, paying them $10,000 per property at closing. Investors would front the down payment for second sales, and receive their fronted down payment back plus $500 at closing, prosecutors said.

4 tips to raise your real estate business’s online profile
As a real estate professional, you know how important it is to get your name in front of prospective clients. With the modern digital world increasingly mobile, the opportunity to create real impact and grow your business is yours for the taking ... READ MORE

The loan packages relied on fraudulent appraisals and falsified loan applications inflating investors’ assets and bank balances. Brice created a company, Your Insurance Source, to deceive the lender that buyers had homeowners insurance, prosecutors said.

All told, between 2000 and 2002, Brice obtained more than $4 million in fraudulent loans from ABN AMRO. Brice set up a business, Greenhouse Resources, to collect loan proceeds, kicking back money to investors and those who recruited them, prosecutors said. None of the loans was repaid, and the properties went into foreclosure.

Headquartered in Ann Arbor, Mich., ABN AMRO and its $224 billion mortgage servicing portfolio are being acquired by Citigroup Inc., which will also move the company’s 2,500 wholesale brokers to CitiMortgage Inc. The combined companies will be the third-largest U.S. mortgage loan originator.