While having second thoughts, a recruited home buyer called the FBI alerting the law enforcement agency of a wide-spread land-flipping scheme in progress. Two years later, indictments were brought against 20 real estate professionals and home buyers who participated in actions which resulted in defrauding mortgage lenders and insurers out of over $10 million spread over 80 property transactions.

Joining the investigation, code-named "Operation Rogue Mortgages," was injured party HUD, the U.S. Department of Housing and Urban Development Office of Inspector General. HUD is on the hook for more than $3 million in fraudulent mortgages attributed to the scheme.

The indictment alleges that beginning in August 1995, defendants Brian Parr, a real estate investor also known as Ahmad Martins, and Robert Voltl, an Inverness attorney who was a member of Attorneys’ Title Guaranty Fund, a Loop title company, conspired to purchase south and west side Chicago homes and immediately resell them at fraudulently inflated prices, typically using the proceeds from the second sale to pay cash for the initial purchase. Eventually, the “spread” between the initial purchase price and the resale exceeded $100,000 per property, which the defendants reaped as profit and used to pay certain defendants who participated in the scheme. The indictment seeks forfeiture of $4.4 million in allegedly fraudulent spread proceeds.

Parr and other defendants allegedly recruited buyers to immediately purchase the properties from Parr at fraudulently inflated prices, using the mortgage loans to the second buyers to pay off the first closings in many cases. Some of these second purchasers were paid cash to serve as “straw purchasers” of the properties, while others were lured by representations that they could purchase homes with no money down and receive cash back at closing.

Other defendants, including mortgage brokers Tamira Smyth, also known as Tamira Russo, and Nancy Zimmerman, who acted as agents of the lenders, allegedly facilitated the fraudulent second purchases by creating and causing the creation of false documents on behalf of the recruited second purchasers. The false documents, which included credit, employment and financial records and information regarding the source of downpayment, were submitted during the mortgage application and approval process to ensure that the second purchasers qualified for the mortgage. In some instances, defendants deposited money into the second purchaser’s bank accounts to create inflated balances.

Assistant United States Attorney Patrick M. Collins told Realty Times that he was unable to comment on whether or not some of the buyers knew or did not know that documents were being altered to allow them to falsely qualify to buy homes.

"A lot (of the homes) have gone into foreclosure," said Collins. "Some wanted to own a home."

Two other defendants, Melva Crittenden-Wynn and Reginald Owens, both of whom are Illinois Certified Residential Appraisers, allegedly prepared fraudulent appraisals that supported the inflated second purchase prices, the indictment alleges. Owens was also certified to perform HUD/FHA appraisals.

The 20 defendants represent virtually every player in the real estate transaction: a real estate attorney, two paralegals, two mortgage brokers, two real estate appraisers and two real estate agents and face stiff penalties of possibly five years imprisonment and fines of $250,000 on charges that include wire and mail fraud and making false statements in connection with fraudulent residential mortgage loans.

Published: July 27, 2000

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.