Mortgage fraud rampant across the country

40 people indicted in 

Texas-Florida mortgage fraud scheme

Forty people have been arrested and charged in connection with a major mortgage fraud scheme in the Eastern District of Texas.  On March 10th, 2010, a 16-count indictment was returned by a federal grand jury.  The charges include one count of conspiracy to commit mail and wire fraud, 12 counts of mail fraud, and three counts of money laundering. 

The 40 defendants are from Texas, Florida, Massachusetts, Tennessee, and Georgia, are charged with one count of conspiracy to commit mail and wire fraud. Many of the defendants are also charged with various counts of mail fraud and money laundering.

Texas Mortgage Fraud Scheme Continued

John Barry, 41, of Windemere, Fla., owned and operated, TKI Group, Inc. and JAB Consulting, based in Florida.  Barry solicited real estate agents, property finders, mortgage brokers, title company attorneys or escrow officers, property appraisers, and straw buyers to facilitate his scheme. 

According to the indictment, Barry was able to convince lenders to approve mortgage loans for which the property values were inflated.  There were at least 114 properties, all residential.  The properties were located in the Texas cities of Allen, Arlington, Cedar Hill, Coppell, Corinth, Cypress, Dallas, Flower Mound, Fort Worth, Frisco, Granbury, Heath, Highland Village, Houston, Keller, Lantana, Lewisville, Little Elm, Lubbock, Magnolia, McKinney, Plano, Roanoke, Southlake, Spring, The Woodlands, and Willis.

U.S. Attorney Bales specifically noted the breadth of the financial scheme, 

“This indictment brings to light a criminal scheme that is quite breathtaking in its scope and beyond disturbing as far as the boldness of the fraud. The agents have done a remarkable job putting together this investigation and we look forward to presenting all of the evidence in court. Hopefully, others involved in mortgage fraud will be taking notice—we will be relentless in discovering, exposing and holding accountable those who have committed similar crimes.”

If convicted, the defendants face up to 20 years in federal prison for the conspiracy charge, up to 20 years in federal prison for each count of mail fraud charge, and up to 10 years in federal prison for each count of money laundering.