“Mortgage fraud is clearly rampant in Arizona and elsewhere”
The defendants, including a real estate agent, college students and family members living in the three states are accused of defrauding lenders out of $8 million. Group members led the high life by using phony incomes, Social Security numbers, bank accounts and assets to get loans for upscale homes and luxury cars, according to the 38-count indictment handed up by a federal grand jury in Phoenix.
The ringleader set up a phony Tempe company that would verify income for the others when the lenders called.
Ken Huffer, assistant special agent in charge for the Secret Service in Arizona, said the case began about 18 months ago with a tip about people borrowing huge amounts of money for homes and cars even though they had no jobs.
Huffer said the scam lasted several years because properties were acquired at a time when Arizona real estate values were skyrocketing, so those who fraudulently borrowed money were able to avoid foreclosures.
I love that part. If you take crazy risks in real estate investing but appreciation turns out to be 25% a year, you’re golden. I guess you can even commit outright fraud and be saved by crazy appreciation… at least for awhile.