Arizona Mortgage Fraud Scheme Uncovered, Suspects Indicted
Twelve people, suspected of being part of a sophisticated white-collar crime ring led by an ex-convict, have been indicted involving a home mortgage scam stretching from Arizona to Nevada to California.
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 the Phoenix housing market.
The group is charged with conspiracy, money laundering and fraud.
The U.S. Attorney’s Office says Lutrell Maurice Sharpe created Tempe-based Arizona Urban Enterprise and a network of other businesses that provided fake incomes for members of the group to use in obtaining home mortgages and car loans. Ring members also used the false information to refinance houses and to make straw-buyer transactions for profit, officials say.
“This was a brazen scheme. To shut it down, a top-notch team was assembled,” U.S. Attorney Daniel Knauss said. “The result is a significant indictment that should put criminals and would-be fraudsters on notice that the investigation and prosecution of loan fraud is a top priority.”
Regulators and prosecutors are cracking down on a wave of mortgage fraud that has hit metropolitan Phoenix in recent years. Arizona joined the top 10 states for mortgage fraud for the first time last year, according to the Mortgage Asset Research Institute.
The indictment says defendants fraudulently financed 16 properties, including homes in Goodyear and Buckeye, as well as 11 luxury cars mostly purchased at Arizona dealerships.
Federal records portray Sharpe as the ringleader. In 1997, while using the alias Maurice Anthony Steward, Sharpe was among more than a dozen people indicted by a federal grand jury in Arizona involving narcotics trafficking and money laundering. Sharpe pleaded guilty to drug conspiracy and money laundering and was sentenced to 70 months in prison in 2001. A judge also ordered the forfeiture of property in Somerton, Ariz., as well as several guns, a Rolex watch and a Jaguar XJE.
Sharpe was released on probation in 2002. An arrest warrant was issued in April for probation violations related to the Arizona mortgage fraud case. The indictment contains three criminal counts against Sharpe for making false statements to his probation officer about his financial dealings.
The grand jury identified numerous Nevada businesses affiliated with the fraud ring, including Presidential Entertainment, Raven Capital, Transtar Realty, Sellers Investments and Tristate Development.
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 Secret Service, which investigates identity fraud related to those crimes, joined forces with investigators from the Internal Revenue Service and Social Security Administration.
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.
The government has moved to seize homes and the other assets named in the indictment. A conviction for home purchase loan, mail or wire fraud comes with a maximum penalty of 30 years in jail and a fine of $1 million.
“Mortgage fraud is clearly rampant in Arizona and elsewhere,” said Andrea Whelan, special agent in charge of the IRS’ criminal investigations unit in Phoenix.
SOURCE: The Arizona Republic