A real estate agent from Las Vegas was ordered on Dec. 19 to serve nearly six years in prison for using straw buyers to collect more than $10 million in mortgages. The agent, 58, was convicted of several counts of fraud in May. A number of people were reportedly forced to declare bankruptcy due to the scheme, and it is not clear whether the defendant will face any civil litigation.
According to court documents, the defendant was part of an investment group that recruited straw buyers to put their names on mortgage applications in 2005 and 2006. A straw buyer is a person who is named as the owner of a property but does not actually control the property or pay its expenses. The investors, which in the earlier round of purchases included members of the defendant’s family, paid fees to the straw buyers in exchange for using their names. The investors then sold the properties and divided up the profits.
But the later investment group the defendant worked with got caught up in Nevada’s housing downturn and was unable to sell their properties. The properties ended up in default or foreclosure. Since the straw buyers’ names were listed as the buyers, they were on the hook for the missing mortgage payments. Many of them declared bankruptcy.
Other members of the investment ring are also going to prison. Three of them pleaded guilty to mortgage fraud. Two of them were sentenced to 15 months incarceration and the third was given credit for time served.
Besides 70 months in prison, the defendant was ordered to pay $3.9 million in forfeiture. If she has significant remaining assets, it is possible that the banks the mortgages were borrowed from or the straw buyers will attempt to get at them in civil lawsuits. If that is the case, the defendant will need legal representation to defend herself.
Source: Las Vegas Sun, “Las Vegas real estate agent gets 5 years in mortgage fraud scheme,” Dave Toplikar, Dec. 19, 2012