Industry NewsMortgage

Fraud schemes net 16-year sentence

400 victims, 20 properties in Ponzi, mortgage fraud scams

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A 63-year-old woman accused of organizing a Ponzi scheme and mortgage fraud ring has been sentenced to nearly 16 years in prison and ordered to pay more than $9 million in restitution after pleading guilty to wire fraud, mail fraud, and money laundering.Patricia Morgen admitted that there were more than 400 victims in a Ponzi scheme that solicited investments in a company called Chicago Development and Planning, which promised to invest in real estate to be rented or resold for profit, prosecutors said.In another scheme, Morgen and a co-defendant submitted fraudulent loan applications to acquire more than 20 properties, most of which were occupied rent-free by Chicago Development and Planning employees, including Morgen herself.The U.S. Securities and Exchange Commission (SEC) began investigating Chicago Development and Planning in 2004, and Morgen was indicted by a federal grand jury on Nov. 20, 2008.In her Dec. 16 guilty plea, Morgen admitted that when she learned of the SEC's invest...