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Mortgage Fraud Investigation

Fairfax County Police Department
Public Information Office
4100 Chain Bridge Road, Fairfax, Va. 22030
703-246-2253. TTY 703-204-2264. Fax 703-246-4253
FCPD-PIO@fairfaxcounty.gov
www.fairfaxcounty.gov/police
News Release: 08/088/1698/CSN/(8)
September 24, 2009

Police Bust Major Mortgage Scheme

The Fairfax County Police Department, in conjunction with the FBI, has arrested 20 suspects involved in an elaborate fraudulent mortgage operation. One team leader and 15 detectives and agents have been investigating the alleged complaint since November of 2007 when local elected officials contacted the Major Crimes Division of the Criminal Investigation Bureau. The officials received several complaints from constituents regarding small houses being torn down then built into mansions to be used as boarding houses.

The investigation led police on a countywide search through zoning records and permits involving over 200 houses. Many of the permits were issued under the same name. The buyers of the homes allegedly signed fraudulent documents. “Straw buyers,” with annual incomes of less than $25,000, were being approved for loans over $600,000.

Several of the arrested subjects were part of a criminal enterprise. They were acting in the capacity of real estate agents, mortgage brokers, and subcontractors. “Straw buyers” were approached and compensated for the use of their unflawed, personal information. The suspects used numerous bank accounts to “float” money into the “straw buyers” accounts so they could qualify for large loan amounts. The house was purchased, torn down, and rebuilt into a mansion sold to a second “straw buyer” for twice the original amount. The house was bought and sold several more times between a network of “straw buyers,” each at higher prices.

Phase I of the investigation ended with arrests relating to 35 houses, valued at $20 million. Over 200 properties may be involved and the estimated real estate value is of the remaining homes is over $100 million. The majority of the homes were located in the Springfield, Falls Church, Vienna, Annandale, and Alexandria areas of the county.

The FBI joined the investigation in the fall of 2008. Schemes such as the one dismantled today are complex and require a significant amount of resources, far more than any one law enforcement agency can provide. The Fairfax County Police Department partnered with members of the Real Estate Fraud Investigations Task Force in the investigation of this scheme.

The FBI funds 16 such mortgage fraud task forces across the country for the sole purpose of disrupting and dismantling significant criminal enterprises committing mortgage fraud. The real-time collaboration required in this case involved task force members from federal, state, and local law enforcement agencies, the United States Attorney’s Office and the Commonwealth Attorney’s Office in Fairfax County.

Seventeen teams of over 100 detectives and agents arrested 20 suspects on Thursday, September 24. The crimes in the arrest warrants include conspiracy to commit wire and mail fraud, using false statements to obtain property or credit, wire fraud, and mail fraud. Convicted suspects of the federal charges could face up to 30 years in prison and fines of up to $1 million.

Fairfax County Police would like to thank the Washington Field Office of the FBI, the United States Attorney’s Office, the Fairfax County Code Enforcement Strike Team, Fairfax County Sheriff’s Office, Virginia Department of Taxation, Fairfax County Commonwealth Attorney’s Office, Immigration and Customs Enforcement (ICE), the United States Postal Service and the Financial Crimes Enforcement Network (FinCEN).

The following links provide a list of properties involved as well as those persons arrested on local and federal charges.

/police/news-releases/2009/pdf/finalproperties_from_fed_charges_____092409.pdf

/police/news-releases/2009/pdf/finalarrestedonlocalcharges.pdf

/police/news-releases/2009/pdf/finalarrestedonfederacharges.pdf

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