Mortgage Fraud Schemes in South Carolina - A Review For SC Criminal Attorneys, Lawyers & Law Firms

Mortgage Fraud Schemes in South Carolina - A Review For SC Criminal Attorneys, Lawyers & Law Firms. Mortgage fraud is difficulty that has reached epidemic proportions in the United States (US) in general and in South Carolina (SC) in particular. The white collar practitioner should be familiar that mortgage fraud is generally investigated by the United States Federal Bureau of Investigation (FBI), although supplementary agencies routinely help the FBI and/or come happening once the child support for a deferential confession the guide in investigating a conflict. Some of the supplement federal agencies which scrutinize mortgage fraud crimes for criminal engagement amassed, but are not limited to, the Internal Revenue Service-Criminal Investigative Division (IRS-CID), United States Postal Inspection Service (USPIS), U.S. Secret Service (USSS), U.S. Immigration and Customs Enforcement (ICE), U.S. Department of Housing and Urban Development-Office of the Inspector General (HUD-OIG), Federal Deposit Insurance Corporation-Office of the Inspector General (FDIC-OIG), the Department of Veterans Affairs-Office of the Inspector General (DVA-OIG) and U.S. Bankruptcy Trustees.

The FBI works extensively once the Financial Crimes Enforcement Network (FinCEN). FinCEN is a moving picture of the United States Department of the Treasury, created in 1990, that collects and analyzes plan just roughly financial transactions in order to campaigning financial crimes, including mortgage fraud, maintenance laundering and terrorist financing. The FinCEN network is a means of bringing people and guidance together to battle puzzling criminal financial transactions such as mortgage fraud and maintenance laundering by implementing recommendation sharing in the midst of doing enforcement agencies and its adjunct partners in the regulatory and financial communities. South Carolina lawyers can preserve abreast of mortgage fraud developments by visiting the respective websites of the FBI and FinCEN.

In South Carolina, mortgage fraud is generally prosecuted by federal prosecutors. The United States Attorney's Office (USAO) and the U.S. Department of Justice's (DOJ) Criminal Fraud Section handle the criminal prosecutions of mortgage fraud cases. The USAO in South Carolina has virtually 50 prosecutors in the confess, and has offices in Charleston, Columbia, Florence, and Greenville. In the psychotherapy stage, a person considering attainable knowledge or involvement in a mortgage fraud may be considered a witness, subject or objective of the examine. A subject is generally a person the prosecutor believes may have animate a mortgage fraud crime, whereas a object is a person the prosecutor believes has operating a crime such as mortgage fraud and the prosecutor has substantial evidence to acknowledge a criminal deed. Criminal prosecutions of mortgage fraud felony cases are usually initiated through the federal grand panel of judges process. A federal grand jury consists of along in the midst of 16 and 23 grand jurors who are presented evidence of alleged criminal toss around by the federal prosecutors following the aid of produce a consequences enforcement agents, usually FBI special agents. At least 12 members of the grand panel of panel of panel of judges must vote supportive of an indictment charging mortgage fraud. South Carolina criminal footnote lawyers are not allowed admission into the grand panel of board of jury at any time, and prosecutors rarely fail to buy an indictment after presentment of their stroke to the grand jury.

Often targets of a mortgage fraud war are invited by the dogfight to avail themselves of the grand jury process and to testify in tummy of the grand panel of panel of adjudicators. Generally, a South Carolina criminal excuse attorney should not come taking place later the money for leave to enter a named intend of a federal criminal mortgage fraud scrutiny to testify in the in the by now the grand panel of board of board of jury. Subjects and witnesses in a mortgage fraud accomplishment are often subpoenaed by the prosecutors to testify in the back the grand board of panel of panel of panel of adjudicators. A criminal marginal note attorney should likewise generally advise a witness or topic to not testify if any part of the testimony would possibly incriminate the client. With be crazy not quite to a federal mortgage fraud examine, behind a citizen receives a try letter, subject letter, or a subpoena to testify in the back the grand board of board of adjudicators, or is contacted in person by a action enforcement overseer such as an FBI special agent, a South Carolina criminal lawyer who is experienced in federal prosecutions should be consulted hurriedly. One of the biggest mistakes a mortgage fraud outlook, subject or witness can make is to testify forward the grand jury or concentrate on criminal investigators prior to consulting when a criminal marginal note attorney. The 5th Amendment to the Constitution allows any person, including a target, subject or witness in a mortgage fraud skirmish, to not incriminate himself or herself. Interestingly, there is no 5th Amendment guidance for a corporation. Obviously, if a defendant has been indicted or arrested for a federal mortgage fraud crime in South Carolina, an experienced SC mortgage fraud lawyer should be consulted shortly.

An important practice tip for South Carolina attorneys representing clients who have arranged to testify before now the grand judges is to accompany the client to the grand judges court room. While not allowed in the grand jury proceeding itself, the attorney can wait just uncovered of the court room and the client is allowed to consult behind the attorney for any ask which is posed to the client by prosecutors or grand jurors. This is an fresh mannerism to upholding minimize any potential damaging statements by the client, and a pleasant mannerism to learn the focus of the prosecutor's skirmish. This admittance makes it much easier to get your hands on insights from the client as to the questions asked during the grand jury proceeding as systematic of debriefing the client after a sometimes long and grueling ask and response session which can last for hours.

South Carolina white collar criminal attorneys dependence to be au fait of the types of mortgage fraud that are prevalent in the disclose in order to effectively identify and represent clients who are busy in mortgage fraud activities. Consumers dependence to be familiar of the variations of mortgage fraud for that gloss that they get your hands on not unwittingly become a allocation of a mean to defraud a bank or federally backed lending institution. Federal mortgage fraud crimes in South Carolina are punishable by happening to 30 years imprisonment in federal prison or $1,000,000 fine, or both. It is unlawful and fraudulent for a person to make a false avowal in credit to speaking his or her pension, assets, debt, or matters of identification, or to willfully overvalue any perch or property, in a encroachment or credit application for the aspire of influencing in any habit the feint of a federally backed financial institution.

Some of the applicable federal criminal statutes which may be charged in mortgage fraud indictments put in, but are not limited to, the once:

18 U.S.C.  1001 - Statements or entries generally 
18 U.S.C.  1010 - HUD and Federal Housing Administration Transactions 
18 U.S.C.  1014 - Loan and version applications generally 
18 U.S.C.  1028 - Fraud and related quarrel in association subsequently identification documents 
18 U.S.C.  1341 - Frauds and swindles by Mail 
18 U.S.C.  1342 - Fictitious declare or dwelling 
18 U.S.C.  1343 - Fraud by wire 
18 U.S.C.  1344 - Bank Fraud 
18 U.S.C.  2 - Aiding and Abetting 
18 U.S.C.  371 - Conspiracy 
42 U.S.C.  408(a) - False Social Security Number

While states experiencing the highest number of mortgage fraud cases are California, Florida, Georgia, Illinois, Indiana, Michigan, New York, Ohio, Texas, Utah, Arizona, Colorado, Maryland, Minnesota, Missouri, Nevada, North Carolina, Tennessee, and Virginia, the confess of South Carolina has seen a big rise in the number of mortgage fraud cases being prosecuted by the USAO, DOJ and FBI.

In South Carolina, a disproportionate number of mortgage fraud cases have occurred in the coastal region. Some of the South Carolina counties following high concentrations of mortgage fraud or bank fraud cases put in Horry County, Florence County, Georgetown County, Charleston County, Berkeley County, Dorchester County, Beaufort County, Colleton County and Jasper County. Some of the South Carolina cities subsequent to high concentrations of mortgage fraud or bank fraud cases commentator Little River, North Myrtle Beach, Myrtle Beach, Murrells Inlet, Georgetown, Awendaw, Mt. Pleasant, Charleston, North Charleston, James Island, Isle of Palms, Sullivan's Island, Folly Beach, Kiawah Island, Hollywood, Ravenel, Beaufort, Bluffton and Hilton Head Island. The defense for the increased number of mortgage fraud and bank fraud criminal prosecutions in these areas is because large number of condominium, condotels, townhouse and same valid house projects which proliferated in these areas. These definite ablaze developments were quickly-liked in areas heavy to the marina and bank lenders were courteous to press to the fore maintenance at a mad pace due to a perceived big demand.

There are a broad variety of schemes, artifices and conspiracies to perpetrate mortgage frauds and band frauds subsequent to which the South Carolina white collar criminal excuse lawyer and consumers must be going on to date. Typical mortgage fraud schemes or conspiracies that have occurred in South Carolina and elsewhere throughout the United States complement the considering:

Air Loans. The impression proceed mortgage fraud mean is a press on obtained in marginal note to a nonexistent property or for a nonexistent borrower. Professional scam artists often doing together to make a sham borrower and a take effect chain of title re a nonexistent property. They later make a produce a repercussion of a title and property insurance binder to gaining to the bank. The scam artists often set going on perform phone banks and mailboxes in order to make comport yourself employment verifications and W-2s, habitat addresses and borrower telephone numbers. They may confirm accounts for payments, and desist custodial accounts for escrows. Phone banks are used to impersonate an employer, an appraiser, a reason agency, a play-stroke conclusive, an accountant, etc..., for bank avowal purposes. The mood imitate to the lead scam artists make a buy of the go forward proceeds and no property is ever bought or sold, and the bank is left subsequent to an unpaid add to that never had any collateral.

Appraisal fraud. Appraisal fraud is often an integral part of most mortgage fraud scams and occurs along with a dishonest appraiser fraudulently appraises a property by inflating its value. In most cases, after the seller receives the closing proceeds, he will pay a kickback to the appraiser as a quid benefit quo for the conduct yourself appraisal. In most cases, the borrower doesn't create any shape in front payments and the domicile or property goes into foreclosure.

Equity Skimming. In an equity skimming mortgage fraud intend, an traveler often uses a straw buyer, false allowance documents, and disloyal credit reports to make a gaining of sticking to of a mortgage money taking place front in the straw buyer's say. After the closing, the straw buyer signs the property difficult than to the entrepreneur in a quit allegation finishing which relinquishes all rights to the property and provides no guaranty to title. The swashbuckler does not create any mortgage payments, and rents the property until foreclosure takes place several months higher. Equity skimming moreover occurs gone a scam performer purchases a residential property whose owner is in default concerning his mortgage and/or his genuine house taxes, and subsequently diverts rental allowance from the property for personal gain and does not apply this rental allowance toward mortgage payments, the payment of taxes and relationship property-similar expenses.

Flipping. A flipping try occurs following the seller purposefully misrepresents the value of a property in order to induce a buyer's obtain. Flipping mortgage fraud schemes usually impinge on a fraudulent appraisal and a grossly inflated sales price.

Foreclosure schemes. Foreclosure try scam artists prey upon people when mounting financial problems that that place them in problem of losing their burning. Homeowners in the yet to be stages of foreclosure may be contacted by a fraudster who represents to the homeowner that he can acquire rid of his debt and maintenance his dwelling for an at the forefront progression, which the scam performer takes and later disappears. In a same foreclosure point of view, Homeowners are approached by a scam artiste who offers to message them refinance the go in front. The homeowners are fraudulently induced to sign hence-called "refinance" documents lonesome to well along locate out that they actually transferred title to the on fire to the fraudster and then slant eviction.

Nominee Loans/Straw buyers. One of the most frequent types of mortgage fraud occurs past a "straw buyer" is used to conceal the identity of the genuine borrower who would not qualify for the mortgage. The straw buyer or nominee buyer generally has pleasing parable. The scam artiste usually fills out the build happening application for the straw buyer, and falsifies the allowance and net worth of the straw buyer in order to qualify for the elaboration. These fraud scams were popularized following the advent of the "stated income" loans which did not require a borrower to prove his concrete income and net worth - the bank just believed the income and net worth that was "avowed" upon the progress application. Straw buyers are often duped into thinking that they'around investing in real ablaze that will be rented out, subsequent to the rental payments paying the mortgage, and are sometime paid a nominal press on outside of closing. In most court prosecution, no payments are made and the lender forecloses upon the evolve. Sometimes straw buyers are actually in upon the scam and are getting a clip of the proceeds.

Silent Second. In the shy second mortgage fraud plot, the buyer borrows the down payment for the buy of the property from the seller through the high flier of a second mortgage which is not disclosed to the lending bank. The lending bank is fraudulently led to understand that the borrower has invested his own child support for the all along payment, taking into consideration in reality, it is borrowed. The second mortgage is generally not recorded to auxiliary conceal its status from the primary lending bank.

A mortgage fraud is usually reported to the FBI by the financial institution upon which the fraud has been on the go. Pursuant to the Bank Secrecy Act of 1970 (BSA), a bank must file a Suspicious Activity Report (SAR) following FinCEN if a customer's happenings indicate that the customer is laundering maintenance or then again violating a federal criminal do something such as committing mortgage fraud. See 31 C.F.R.  103.18(a). A bank is required to file a SAR no well ahead than 30 calendar days after the date of initial detection by the bank of facts that may constitute a basis for filing a SAR, unless no suspect was initially identified upon the date of the detection, in which exploit the bank has taking place to 60 days to file the SAR. See 31 C.F.R.  103.18(b). Once FinCEN has analyzed the auspices contained in the SAR, if a criminal be tame up is found to have occurred, subsequently the deed is turned on intensity of to the FBI and the DOJ or AUSO for chemical analysis and accomplishment. The rise in FBI SARs reports involving mortgage fraud went from concerning 2,000 in 1996 to difficult than 25,000 in 2005. Of those 2005 SARs reports, 20,000 of working borrower fraud, re 7,000 practicing broker fraud, and a propos 2,000 effective appraiser fraud.

The FBI has identified a number of indicators of mortgage fraud of which the South Carolina criminal white collar lawyer needs to be aware. These be neighboring to inflated appraisals or the exclusive use of one appraiser, increased commissions or bonuses for brokers and appraisers, bonuses paid (uncovered or at treaty) for abet-based facilities, on top of ample fees, falsifications upon proceed applications, explanations to buyers upon how to falsify the mortgage application, requests for borrowers to sign a blank expansion application, movement supporting intensify documentation, requests to sign blank employee forms, bank forms or auxiliary forms, obtain loans which are disguised as refinance loans, investors who are guaranteed a coarsely-get sticking to of of the property, investors who are paid a obstinate percentage to sell or flip a property, and moreover than than incorporation "Holding Companies" are used to adding together property values.

One of the first and biggest South Carolina mortgage fraud prosecutions occurred in the Charleston Division in the 1990's. It operational nominee borrowers and straw loans made by Citadel Federal Saving and Loan. Over 10 straw purchasers were enticed into the concrete house loans by getting paid fees for signing taking place for the loans. They did not put happening any of their own money as portion of the agreement and along together surrounded by the loans went barbed the bank was left as soon as properties that were upside the length of, that is, the genuine estate was worth less the the amount of the press on. Some bank insiders were share of the mean and got convicted for their respective roles.

The range of defendants that a SC criminal lawyer will represent in a typical mortgage fraud prosecution may supplement straw borrowers or nominee borrowers, real estate agents, developers, appraisers, mortgage brokers, and sometimes even closing attorneys and bankers. Bankers often acquire on the go in mortgage fraud scams because they are receiving kickbacks from the borrowers or are paid bonuses for the volume of loans made and as a upshot ignore proper banking proceed requirements and protocols in order to create more money. Close chemical analysis should be solution to bank shape on applications, appraisals, HUD-1 closing statements, borrower's W-2 and tax returns following analyzing a potential mortgage fraud combat for a potential client.

Federal judges who impose sentences for mortgage fraud normally rely upon the United States Sentencing Guidelines, which are now apprehension so of the U.S. v. Booker battle, subsequent to determining a sentence. A federal court calculates a particular guideline range by assessing a defendant's criminal records, the applicable base offense level, and the amount of the actual or expected loss. Section 2B1.1 of the USSG sets forth a loss table which increases the base offense level according to the amount of pension on the go in the mortgage fraud. Generally, the more allocation which is aimless in a mortgage fraud scam, the greater the sentence the defendant receives. In some cases, a defendant may be subjected to sentencing enhancements which means the defendant receives a greater sentence. A defendant may obtain an decoration for the role in the offense if the court determines that the defendant was an organizer, commissioner, or a recruiter, or used a far along means to apportion promote to a crime, abused a approach a trust, or targeted a vulnerable victim such as a disabled or elderly person. However, federal judges now have broad latitude for imposing a sentence because they must find the broad statutory factors set forth in 18 U.S.C. 3553(a)which add together the flora and fauna and circumstances of the offense and the records and characteristics of the defendant, the dependence for the sentence imposed to reflect the seriousness of the offense, to puff adulation for the produce an effect, and to have enough keep just punishment for the offense, the compulsion to afford usual deterrence to criminal conduct, the dependence to guard the public from auxiliary crimes of the defendant, the dependence to manage to pay for the defendant considering needed scholastic or vocational training, medical care, or add-on correctional treatment in the most full of zip appearance, the kinds of sentences manageable, the sentence recommended by the Sentencing Guidelines and any applicable guidelines or policy confirmation therein, the need to avoid sentence disparities, and the dependence for restitution.

There are some important strategic decisions which dependence to be made for the defendant who has been charged or indicted for mortgage fraud. The defendant and his lawyer should seriously manage the result of pleading guilty if he has in seek of fact operating the crime. A mortgage fraud defendant can realize occurring to a 3 level downward departure for pleading guilty. A criminal lawyer representing a mortgage fraud defendant can in addition to file a upheaval for a downward departure and/or a pursuit for a variance and argue factors to the court in foster of an supplementary postponement in a defendant's sentence. The mortgage fraud defendant's criminal attorney should closely investigate the circumstances of the lawsuit and the defendant's background and criminal archives in order to encourage on taking place minimize the amount of period to be served. A vital tip for an attorney representing a criminal mortgage fraud defendant in South Carolina is to regard as creature mitigating factors such as disparate sentences, 5K departures for cooperation, aberrant behavior, property values, relatives ties, astonishing rehabilitation, diminished mental aptitude, astounding restitution should be considered as reachable justifications for a lesser sentence.

A white collar criminal defense attorney in South Carolina must have an conformity of the basics of the mortgage fraud in order to sufficiently nimbly represent clients who have been charged or indicted past mortgage fraud violations. Recognizing the difference together as well as the status of mammal a intend, subject or witness can have important result in how a skirmish is handled. A white collar bank fraud or mortgage fraud criminal conviction can have computer graphics altering repercussion for those defendants convicted of the same. A defendant who is charged or indicted considering the federal crime of mortgage fraud should consult behind a SC criminal lawyer who is knowledgeable more or less the swap types of these scams, how the scams are carried out, the battle enforcement investigatory process, the grand panel of adjudicators process, substantive battle behind quotation to mortgage fraud, the applicable federal sentencing guidelines and approaches within obtain to minimize a defendant's potential sentence.

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