A hedge fund-backed real estate speculator and rental property owner in Columbus, Ohio, is facing 35 years in prison for his role in a mortgage fraud scheme that fraudulently secured more than $2.6 million in mortgage loans. Donald F. Green, 48, pleaded guilty in U.S. District Court last Friday to one count of income tax evasion, one count of conspiracy to commit bank fraud and wire fraud, and one count of bank fraud.

According to Green’s plea agreement, Green bought houses usually in need of substantial repairs in distressed neighborhoods in Columbus, Ohio, in 2003 and 2004 at or near their true-market value. In 2003, Green developed a working relationship with Jonathan L. Boyd, a loan officer at Summer Tyme Mortgage. Boyd would recruit straw buyers to purchase Green’s properties using fictitious income numbers in order to increase their reported credit worthiness. Court documents also reveal that Boyd arranged for inflated appraisals of many of those properties by Darneil Gaither. All three–Green, Boyd, and Gaither–used false information to obtain approximately $2,651,200 in mortgage loans.

In 2004, Green sold similar houses to other straw buyers through a scheme set up by codefendants Aryeh Schottenstein, Jeffrey Lieberman and Shawn Griffin in an investment program with Stillwater Capital Partners. Stillwater paid Griffin substantial amounts of money to renovate these properties provided by Green, but Griffin failed to follow through on any renovations. Green received consulting fees on several of these deals yet failed to report the income on his tax returns.

Green also gave his tax preparer schedules of fictitious improvements made on many of the properties in order to reduce his capital gains profits and therefore his taxes on the sale of the properties. By not reporting all of his income, Green fraudulently avoided an additional tax due and owing of $100,332.97 for 2003, and $130,043.19 for 2004.

Green and the others were indicted in August, 2007. Charges are still pending against Boyd and Gaither. Schottenstein, Lieberman and Griffin have plea agreements pending.

• Mortgage Fraud Law Goes into Effect in North Carolina: Among the list of new laws taking effect tomorrow in North Carolina–a law making it easier to prosecute residential mortgage fraud by defining the practice and creating tougher punishments for repeat offenders.
• Mortgage Inquiries Swamping Arizona: Arizona’s mortgage regulator has shut down a handful of firms for fraud and other illegal lending practices this year, but at least 40 other investigations are stalled because there is no money to fund them.
• California Real Estate Firm Investigated for Fraud: Federal investigators are looking into Crisp & Cole Real Estate’s operations for possible mortgage fraud after a federal raid of 13 of the now-defunct California company’s offices.
• New Jersey Lawyer-Judge at Center of Land-Flip Investigation: A NJ lawyer who is also his town’s judge may have played a central role in a scheme to defraud lenders by obtaining mortgages based on inflated appraisals of run-down properties.
• Minnesota Mortgage Firm is the Focus of Fraud Probe: Investigators are probing mortgage fraud complaints involving Universal Mortgage and several of its employees that are said to have used straw buyers to buy property at inflated prices.
• Guilty Plea Entered in Missouri Fraud Case: A 30-year-old man from St. Louis is the fifth person implicated in a mortgage fraud ring involving dozens of homes and millions of dollars in real estate transactions dating back to 2005. Daniel Mann pleaded guilty to conspiracy to commit wire fraud and now faces a maximum penalty of five years in prison. Mann admitted to arranging a number of fraudulent real estate transactions that were part of a larger fraud ring coordinated by another person who pleaded guilty in September to similar charges and will be sentenced in December.
• Canadian Paralegal Convicted in $30 Million Mortgage Fraud Scam: An Edmonton fraudster has been convicted of supporting a criminal organization by helping to swindle unsuspecting real estate investors out of nearly $30 million. Sixty-one-year-old Terry Ellis was found guilty of 12 counts of fraud and one count of forgery in connection with a massive mortgage fraud believed to be the biggest in Alberta history.
• Editorial Questions Michigan Attorney General’s Record on Real Estate Fraud: In the state hardest hit by real estate and mortgage fraud-related foreclosures, its attorney general, Mike Cox–who has won nationwide notoriety for locking up parents behind in their child support payments–has yet to file a single criminal complaint against any mortgage broker or lending entity.
• Two Sentenced in Connection with $15 Million Mortgage Fraud Case in Ohio: Two people have been sentenced to prison in connection with what prosecutors describe as a mortgage fraud scam in upscale Cleveland suburbs. Builder and developer, Edward Emery received a sentence totaling 34 months and a fine of $10,000. Eloise Anderson will spend nearly a year in prison and has been ordered to pay $35,000 in restitution.

A pair of brothers from New York’s Staten Island are headed to jail after pleading guilty to a Real Estate Fraud scam that appears to have involved members of the infamous Gambino crime family. Thirty-year-old James LaForte, Jr. and his 36-year-old brother, Joseph LaForte, posed as attorneys for banks in real estate transactions that netted the two and their parents over $14 million in illegal proceeds.

According to Staten Island Live, the younger LaForte has been sentenced to five to 15 years in prison for his role in the scam, while his older brother netted three-and-a-half to 10 years behind bars.

From silive.com and the Staten Island Advance:

James LaForte Jr. and Joseph W. LaForte fronted a Mineola, L.I. law firm and acted as attorneys for banks in real-estate transactions. Along with their parents and other conspirators, they ripped off three dozen personal clients and lending institutions of more than $14 million over 17 months, ending in August 2005, prosecutors said…

Nassau County prosecutors said the siblings and their parents, James LaForte Sr. and Tina LaForte used a relative who was a criminal defense attorney on Staten Island to set up a law office in Mineola to close real-estate deals.

The ill-gotten proceeds allegedly paid for pricey cars, a boat, real estate and mortgages on homes owned by the defendants and their wives. Most of the 36 victims were from Long Island and Queens.

James LaForte Sr., 61, of New Dorp, is the son of Joseph (Joe the Cat) LaForte, a reputed capo in the Gambino crime family.

Is anyone really surprised the Mob is involved in Real Estate Fraud? For more, read Swindling siblings sentenced in real estate scam

Many people believed this day would never come, but exactly one year to the day from when he was apprehended by Federal authorities, this nation’s most notorious Real Estate and Mortgage Fraud-related criminal has finally been sentenced for his role in a brazen string of acts that stunned nearly everyone who had ever played a hand in Real Estate and Mortgage Fraud forensics.

Thirty-eight-year-old Matthew Bevan Cox, the poster child for Real Estate and Mortgage Fraud in this country… the same man who kept federal authorities at bay for over three years and was the subject of an intense nationwide manhunt (and whose face landed on the U.S. Secret Service’s list of the Most Wanted Fugitives for his role in numerous Real Estate and Mortgage Fraud scams)… cried like a little baby in U.S. District Court in Atlanta yesterday afternoon, and was promptly sentenced to serve 26 years in Federal prison AND pay his victims up to $12 million in restitution.

For those of you who have never heard Matthew Cox talk about his crimes, the following clip, from NBC affiliate WSMV-TV in Nashville, Tennessee, will give you a small taste of what was going his mind:

Matthew Cox was indicted by a Federal grand jury in Atlanta in late-September of 2005 on 42 counts of mortgage fraud, identity theft, money laundering, and conspiracy. The Middle Districts of Tennessee and Florida filed criminal charges against Cox in April of this year, charging him conspiracy to commit mortgage fraud, aggravated identity theft, and passport fraud.

Cox, who was pleaded guilty to all charges on April 10th of this year, was apprehended on November 16, 2006 in Tennessee after a Nashville man read about him in a local newspaper and tipped off U.S. Secret Service agents. In the world of Real Estate and Mortgage Fraud forensics, no one person’s name sends a shiver up the back of a spine more so than Matthew Cox, who was also known as Maxwell Price, David Richard Freeman, Gerald Scott Cugno, Michael Shawn Shanahan, Gary Lee Sullivan, Michael John Eckert, Michael White, Kevin White, David White, James Redd.

Matthew Cox used stolen identities to obtain drivers licenses, purchase vehicles, lease mail drops, rent apartments, and open bank accounts to receive Real Estate-related scheme proceeds throughout the states of Georgia, Florida, Alabama, South Carolina and North Carolina. Cox’s accomplice in many of his scams– Rebecca Marie Hauck–was sentenced on November 15, 2006 (the day before Cox was captured) by a U.S. District Judge in Georgia to serve 5 years and 10 months in prison for her role in the now infamous string of mortgage and bank fraud-related crimes.

How Cox be able to afford the $12 million he was ordered to pay in victim restitution is anyone’s guess, but despite his wicked ways, Matthew Cox was–and may still be–a talented writer and artist who just so happened to leave behind a number of works. According to WXIA-TV in Atlanta, a representative of the victims is planning to offer, perhaps as soon as this coming week, four of Cox’s paintings for sale on eBay, with 100 percent of the proceeds going into the victims’ restitution fund. Cox did signed away the rights to his future works, including any additional paintings and unpublished novels, past and future, to his victims’ restitution fund, so that too may provide some relief.

For now, we can all sleep a little better at night knowing that Matthew Cox is finally paying for his crimes. That said, 26 years in prison and $12 million in fines may not be enough for this guy or the others who try to follow his example.

Alexander MacInnes of the Herald News interviewed me this week for a story about a Bergen County, NJ, Real Estate developer who for years exploited unsuspecting homebuyers while bribing city employees to direct tenants in the houses he managed. The developer, 63-year-old Michael Eliasof, pleaded guilty Wednesday to conspiracy to commit money laundering. He was charged with taking nearly $2.5 million in illegal proceeds from the sale of overvalued properties to buyers not qualified to purchase them. Eliasof, who will be sentenced in late-February of next year, is looking at 10 years in prison and up to $250,000 in fines (or twice the amount he gained from his criminal activity).

From the Herald News, courtesy of NorthJersey.com:

The circle of professionals Eliasof worked with included Garfield Municipal Judge William C. Colacino Jr., who was the closing attorney for dozens of deals Eliasof lined up with inexperienced buyers. Colacino was not in court Wednesday and has not been indicted. He declined to comment Wednesday.

Eliasof and 10 co-conspirators, including mortgage brokers, loan officers and appraisers, artificially inflated the values of properties throughout Paterson. They then falsified loan applications and income levels for those buyers whom Eliasof lured in with “no money-down” deals, according to the federal charges.

Eliasof, 63, admitted to controlling the profits and dispersing kickbacks to his lawyer and mortgage broker. In another example of his reach, Eliasof admitted in court Wednesday that he bribed Paterson Section 8 caseworkers to direct tenants in the houses he managed.

In March, 14 public employees from Paterson and Passaic County were arrested on charges of taking bribes from an unnamed property manager who was cooperating with federal investigators. U.S. Attorney Hope Olds, who is prosecuting those cases, said the witness started cooperating after being caught in a real estate scheme.

More from Alexander MacInnes and the Herald News:

National real estate experts said the description of the fraud that occurred in Paterson is a variation of either illegal house flipping or a deal called “cash back at closing” — a scheme in which money is transferred off the books between the parties involved.

Ralph Roberts, a Michigan Realtor and author of “Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership,” said there’s a reason this type of fraud exists.

“It’s extremely profitable,” Roberts said. “That’s why they do it. It’s easier than working.”

As lucrative as the deals are, they often falter and leave a distinct footprint on communities.

“They hurt the neighborhoods, they hurt the tax base, they the hurt schools,” Roberts said. “Imagine living across the street from the house that now sits vacant.”

Read MacInnes’ entire article: “Magnate guilty in housing scheme”

Two industry insiders–one a prominent Realtor in Edmond, Oklahoma; the other a successful real estate broker in Kansas City, Missouri–have pleaded guilty in separate cases to committing mortgage fraud.

In the Oklahoma case, high profile Realtor Ann Campbell pleaded guilty on Wednesday to a federal felony charge of conspiracy to commit wire fraud in connection with cash back at closing scheme. The 66-year-old Campbell, who heads the RE/MAX affiliated “Ann Campbell Team,” was a primary figure in the sale of a home in Edmond’s upscale Oak Tree neighborhood. According to Assistant U.S. Attorney Susan Cox, Campbell–who represented the seller of the house–conspired to falsify loan-related documents that stated that the seller would pay certain closing costs that then were kicked back to the buyer through a title company account belonging to–guess who–Ann Campbell.

In a statement, Campbell’s attorney said “Mrs. Campbell has acknowledged making a serious error in judgement… She did not retain any funds beyond her normal commission…” But as part of her plea, has Campbell agreed to pay back more than $50,000 from her commission on the sale of three Oak Tree homes, and now faces up to five years in prison and a $250,000 fine.

In Kansas City, Missouri, 59-year-old real estate broker Doris Taylor pleaded guilty in federal court on Wednesday to transferring money obtained illegally through fraud across state lines. By pleading guilty, Taylor admitted that she caused a mortgage company to transfer $331,859 to an Independence, Missouri, bank account because of a fraudulent loan application. Taylor, who ran Doris J. Taylor Realty, faces up to 10 years in federal prison without the possibility of parole, plus a fine up to $250,000 and an order of restitution.