A recent appeal to the 11th Circuit Court of Appeals sought to overturn the convictions of nineteen defendants for crimes related to a mortgage fraud scheme.
Atlanta mortgage fraud attorneys paid close attention to the case. Mainly, though, the grounds for appeal seemed related to the particulars of this mortgage fraud case.
In 2007, real estate investor Phillip E. Hill was found guilty of 168 counts of mortgage fraud and money laundering. His co-defendants were also found guilty of conspiracy and mortgage fraud charges. Hill was sentenced to 30 and a half years in prison plus $41.8 in restitution.
The convictions stemmed from an Atlanta mortgage fraud scheme that cheated lenders of over $40 million. Many properties involved were forced into foreclosure. Foreclosed properties in the case were valued at over $80 million.
The scheme involved illegal flipping:
That is, properties were purchased and quickly resold, often on the same day. The new sale would take place at an artificially inflated price. This price would be made possible by a fraudulent appraisal. The sale would be made to a middleman, called a straw buyer. Mortgages in the straw buyer’s name or secured using stolen identities were taken out, and then refinanced at the inflated higher value. Then the properties were flipped again.
The plotters use the new loan money to pay off the original purchase and then split the profits. The new loans are not repaid, leaving the lenders with foreclosed properties that are not as valuable in the marketplace as they seemed on paper.
The appeals were based on alleged problems with the jury selection, and with a promise of immunity to one of the defendants.
The panel seemed to be skeptical of the claims.
Source: Law.com, “11th Circuit Probes Defense Claims of Jury Selection Errors in Major Mortgage Fraud Case,” April 29, 2010