Investigators Uncover Florida Mortgage Scam; 11 Defendants Indicted For Conspiracy
Using stolen identities and fictitious buyers to apply for bogus Florida home loans, 11 people in South Florida ran an elaborate mortgage fraud and property flipping scheme in Broward County.
Fortunately, the Miami Herald reports, investigators have pulled the plug.
An investigation by local, state and federal agencies uncovered the ring, which conned banks into issuing around $12 million in illicit Florida home loan funds from 2002-present.
Yvette Scott Patterson, the alleged mastermind, is accused of thinking up and carrying out a scheme to submit fraudulent mortgage applications using the false data through her mortgage company, Khadmilroy Inc.
Patterson, her husband Delroy Patterson, 45, and nine other defendants have been charged with conspiracy to commit mail, wire and identity fraud. The Pattersons are currently in Jamaica, where the U.S. government is seeking their extradition. Of the nine other implicated parties, some were in jail on other charges, two were arrested Tuesday, and others are at large.
The group is believed to have profited from the sales of the fraudulently purchased property as well as more than $300,000 earned in broker’s fees through Patterson’s Florida mortgage lender. The case illustrates what so many officials have been talking about for months - the growing problem of real estate crime in Florida.
The Sunshine State ranked first in home loan-oriented fraud in a 2006 study. Fraud involving home loans is among the fastest-growing white-collar crimes in the country, particularly in areas like the South Florida housing market where the run-up in home values has been so extreme over the past five years.
In the Florida mortgage loan scam conducted by Patterson et al., the crew allegedly operated with the intention of financing a home in Sunrise. The indictment states that the defendants allegedly filled out a Florida home loan application with phony documentation and a stolen identity.
Using the same methods, the gang resold the property a year later, to a victim whose identity was also stolen, in order to get a $190,000 Florida home mortgage. Finally, in November of 2004, the defendants sold the home a third time to a victim by taking out a mortgage loan in the victim’s name for roughly $239,000.
In the surging Broward County real estate market, Patterson & Co. were able to up the value of the property by 40 percent in a little over two years. At the same time, they pocketed tens of thousands in fraudulent broker’s fees.
