Team Fraud: Lenders, Agents, and Borrowers Caught in Sting

Real estate fraud happens all the time, but team fraud involving the lender, agent, and borrower is a new one even to this team at Really Rotten Realty. In Kansas City, that exact event took place.

Team Fraud in Kansas City

In this example of real estate fraud, lenders and brokers teamed up to hatch their scheme. The Realtors would find buyers to purchase properties well over market value, and the lenders would rubber stamp the loans disbursing the funds. The buyers, who would end up with damaged credit, were each paid $100,000, and the corrupt bankers and real estate agents, the team behind the team fraud, would split the remainder and mark it up as a sale to a bad borrower. The total proceeds from the deal were about $2 million.

Team Fraud Charges

Two loan officers and two real estate agents were among the nine people charged in the sting. The fraud team went beyond simply creating unrealistic mortgage loans. They created invoices from fictitious companies for work done on the homes, which allowed for an additional cash payout beyond the mortgage value.

The lead real estate agent on the deal was charged with 31 counts of wire fraud and one count of money laundering. Her real estate partner was charged with 18 counts. Both were charged in addition to the crime itself, which they shared charged with the seven others. The nine involved parties were charged with a total 35-count indictment by a Kansas City grand jury.

Real the whole story at AOL Real Estate.

Update: The FBI released additional information and a new total value of the fraud, which reached over $11 million. Read more at the FBI press release.