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Washington-area man pleads guilty to D.C. mortgage fraud

A 36-year-old Ashburn, Virginia, man recently pleaded guilty to fraud charges following a probe by the Federal Bureau of Investigation into his real estate transactions throughout the metro Washington area. A U.S. district court judge accepted the plea and is scheduled to sentence the man on May 15. Because the crimes are federal, the man's sentence will fall under sentencing guidelines prescribed by Congress. He could go to prison for up to 5 years as well as pay heavy fines.

According to the statement of facts that was filed along with the man's plea agreement, in his capacity as a realtor, he participated in a series of fraudulent real estate deals using his wife's company, Legacy Investment Group. In a series of short-sale transactions, the man got mortgage lenders, whose names were not released by federal investigators, to approve property sales for amounts that were less than what property owners owed. This required the man to forge signatures and initials on mortgage documents. He also sent fictitious hardship letters and other false financial documents to the mortgage lenders and did not disclose his marital relationship with Legacy's owner.

The FBI's Washington field office led the investigation and concluded that the man's short sales should have been disclosed to the mortgage lenders as arm's length transactions. This failure of disclosure led to charges of conspiracy to commit bank fraud.

A total of six short sale mortgage fraud transactions cost mortgage lenders nearly $925,000. The man and relatives involved took nearly $200,000 in profits for their parts in the scheme. It is not known whether home mortgage owners were defrauded directly or suffered foreclosures or bankruptcies as a result of the crimes.

A check of Washington, D.C., area mortgage applications show the man has been involved in home sales since at least 2010.

Source: FBI, Washington Field Office, "Ashburn Businessman Pleads Guilty in Nearly $1 Million Short Sale Mortgage Fraud Conspiracy," accessed Feb. 27, 2015

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