Montana Loan Officer Convicted of Aggravated Identity Theft Involving $3M Mortgage Fraud Scheme

[Erica Absetz <erica () riskbasedsecurity com>]

http://www.loansafe.org/montana-loan-officer-convicted-of-aggravated-identity-theft-involving-3m-mortgage-fraud-scheme

(Source: FBI) - LAS VEGAS—Following a six-day jury trial, Nicholas
Lindsey, 40, of, Billings, Montana, was convicted today of nine counts
of wire fraud and one count of aggravated identity theft for his role
in a mortgage fraud scheme, announced Daniel G. Bogden, United States
Attorney for the District of Nevada.

“Many innocent homeowners in Nevada have suffered because of this type
of crime involving fraudulent residential mortgage transactions,” said
U.S. Attorney Bogden. “Since 2008, when the FBI and our office made
mortgage fraud prosecutions a priority, we have investigated, charged,
and convicted hundreds of persons for federal mortgage fraud crimes,
and most of them are now serving time in federal prison.”

According to the indictment and evidence presented to the jury during
the trial, from about May to September 2006, Lindsey, who worked as a
loan officer for Clear Mortgage and Signature Mortgage, recruited
straw buyers to participate in what he described as a lucrative real
estate investment opportunity by purchasing five homes in the Las
Vegas area. Evidence at trial demonstrated that Lindsey secured over
$3 million in mortgage loans by knowingly causing to be placed in the
straw buyers’ mortgage loan applications false information concerning
the buyers’ income, assets, and intents to occupy the homes. Once the
mortgages were approved, Lindsey fraudulently diverted to his bank
account a portion of the proceeds disbursed from escrow and used these
funds for his own benefit. Lindsey realized additional profits by
living in or renting out properties in the buyers’ names.

In addition to the five homes of which the buyers were aware, Lindsey
stole two buyers’ identities and used their personal information to
purchase three additional properties in their names. The evidence
established that Lindsey leased two of these properties and collected
rental income and used the third as his own personal residence. After
collecting profits, Lindsey stopped making the mortgage payments on
the properties and allowed all eight homes to default in the
borrowers’ names, causing an estimated loss to lenders of $1.6
million.

Lindsey was ordered detained pending sentencing. He is scheduled to be
sentenced by Senior U.S. District Judge Lloyd D. George on July 22,
2013, at 9:00 a.m. He faces up to 30 years in prison on each fraud
count, as well as two years in prison on the aggravated identity theft
count, which must be served consecutively to any prison term ordered
on the fraud counts. He also faces fines of up to $1 million on each
count.

The case was investigated by the FBI and is being prosecuted by
Assistant U.S. Attorney Christina Brown and Department of Justice
Trial Attorney Brian Young.

This case was handled in connection with the President’s Financial
Fraud Enforcement Task Force. The task force was established to wage
an aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. With more than 20 federal agencies, 94
U.S. attorneys’ offices, and state and local partners, it is the
broadest coalition of law enforcement, investigatory, and regulatory
agencies ever assembled to combat fraud. Since its formation, the task
force has made great strides in facilitating increased investigation
and prosecution of financial crimes; enhancing coordination and
cooperation among federal, state, and local authorities; addressing
discrimination in the lending and financial markets and conducting
outreach to the public, victims, financial institutions, and other
organizations. Over the past three fiscal years, the Justice
Department has filed nearly 10,000 financial fraud cases against
nearly 15,000 defendants including more than 2,900 mortgage fraud
defendants. For more information on the task force, please visit
www.stopfraud.gov.
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