Editor’s note: With billions of dollars flowing in and out of the real estate industry each year, the industry sees its share of fraud and other criminal misdeeds. In this special three-part series, Inman News uncovered the most common schemes, infamous scandals and a host of fraudsters who are still on the lam. (See Part 2: Real estate fraud schemes run rampant and Part 3: From savings and loans to Whitewater.)
You probably haven’t seen Judith H. Hooper lately.
Hooper, 55, is a former mortgage broker who allegedly changed her name to Jerry Dale Hunter and arranged for fraudulent loans to originate through a company called American Mortgage Exchange. She is one of several people who were indicted in an alleged elaborate mortgage fraud scheme, based in Georgia, that collected about $20 million. The alleged “flipping” scheme involved the purchase of residential properties for resale at artificially inflated prices. Those involved reportedly would use fraudulent sellers and borrowers, also known as “straw sellers” and “straw borrowers” to illegally collect mortgage loan proceeds from American Mortgage Exchange, which allegedly was the source for most of the bogus loans.
Hooper, who reportedly left the United States in the summer of 2000 and is now considered a fugitive, may have changed her appearance through plastic surgery, and she may have been living in Belize, according to reports. Several agencies participated in the American Mortgage Exchange investigation, including the FBI, Secret Service, the U.S. Attorney’s Office for the Northern District of Georgia, and the Housing and Urban Development’s Office of Inspector General.
There may not be a prime-time television show that focuses on real estate’s fugitives, or a federal “most wanted” list for notorious real estate criminals who are on the run, but investigative and enforcement agencies haven’t forgotten about them. HUD, the Internal Revenue Service and the FBI are among the agencies that would very much like to see these outlaws again.
HUD’s Office of Inspector General, for example, publishes a semi-annual report detailing its investigations. The latest Semiannual Report to Congress, which covers Oct. 1, 2003, through March 31, 2004, includes information about a couple of fugitives who were involved in real estate-related fraud. Theresa Holt, who was allegedly involved in a loan fraud scheme involving 100 properties and $5.7 million in loans, is a former employee of North East Austin.
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Holt reportedly started up her own company, Share Development Corp., which acquired numerous properties and resold them. “Many of the applications for the mortgage loans contained inflated employment information, including information that some buyers worked for Share Development and Northeast Austin,” according to the report. “In addition, buyers, as well as loan officers, were paid $3,000 to $4,000 outside of closing for purchasing the properties.” Holt reportedly bolted and is now a fugitive.
Jean Guilbaud, a real estate broker who was indicted in state court in Nassau County, N.Y., on four counts of grand larceny, one count of scheme to defraud, and one count of bail-jumping in connection with his alleged involvement in a $40,000 HUD real estate-owned fraud scheme According to the report, HUD has terminated Guilbaud’s approval to bid on HUD-owned properties, and Guilbaud is a fugitive.
In March, the FBI’s Los Angeles Division announced the arrest of several individuals for their alleged participation in an eight-year mortgage fraud scheme that generated $30 million in profits. James Douglas Lus, who was allegedly involved in the fraud, is now a fugitive. The participants in this scheme allegedly used fictitious and stolen identities – including the identities of deceased real estate brokers – to obtain hundreds of mortgage loans.
The participants reportedly used the fraudulent identities to “apply for loans posing as real estate agents, mortgage brokers and borrowers,” according to an FBI announcement. “In addition, (they) used stolen or phony identities to pose as landlords providing verification of borrowers’ income and rent history, gift donors providing money for down payments and insurance companies providing homeowners’ insurance. (They) also used stolen or fraudulent identities to establish mail drops, phone numbers and bank accounts and to deal with the California Department of Real Estate.” They also allegedly would “flip” properties several times using fraudulent identities, in some cases, the FBI announced.
And then there was Matthew Cox, a former Tampa, Fla., mortgage broker who is sought as the alleged mastermind in a loan-fraud scheme worth over $2.7 million. Cox has been a fugitive since December 2003, and allegedly has committed crimes in Georgia, including mortgage fraud, since he became a fugitive, according to reports. Cox was allegedly participating in mortgage fraud in the Tampa area while he was on probation for mortgage fraud and grand theft. According to court documents, a warrant for Cox’s arrest was issued on Dec. 22, 2003.
John T. Reed, an Alamo, Calif., resident who maintains an online rating of “real estate investment gurus” and “best-selling real estate authors,” notes that Bill “Tycoon” Greene may be “the biggest character among the real estate gurus,” though he does not recommend taking his advice – Greene is now a fugitive. “He made a big splash in the late ’70s with his book, ‘Two Years for Freedom,'” Reed said stated in his Web description of Greene. Greene, who “was convicted of federal income-tax evasion and sent to prison,” later disappeared from a halfway house and “is apparently living in England using the name Dr. William G. Hill.”
While there aren’t any national television shows dedicated to real estate criminals, the local cable television show “Fugitive Watch,” which is delivered to more than 1 million San Francisco Bay Area cable viewers, gives some airtime to crimes of all types, including real estate-related fraud.
The show’s Web site, Fugitive.com, lists information about Alice E. Navarro, for example, who was “convicted in a real estate fraud case where she befriended and scammed thousands of dollars from Spanish-speaking victims” but reportedly failed to show up for sentencing. Navarro reportedly is not licensed to sell real estate “and there may be other victims throughout California,” according to the Web site.
Tomorrow: How common real estate fraud schemes work.
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