Ohio Attorney General Richard Corday and Summit County Prosecutor Sherri Bevan Walsh today announced indictments against 16 individuals on charges related to more than $1 million in alleged mortgage fraud involving 40 different properties. One additional defendant is expected to plead guilty to a bill of information. The charges are the result of a two-year-long investigation by the Summit County Mortgage Fraud Task Force.
The scheme involved artificially inflating the values of homes, falsifying mortgage applications including promises of repairs to the properties that were never done and skimming money off mortgage proceeds at closing. Charges against the defendants include engaging in a pattern of corrupt activity, money laundering, theft, falsification and telecommunications fraud.
"This type of fraud wreaks havoc on our communities," said Attorney General Cordray. "The players in these kinds of schemes are willing to lie, cheat and steal with no regard to the damage they leave in their wake. Neighborhoods are stuck with boarded-up homes and lower property values, and municipalities and school districts suffer from the community's deflated tax base."
Summit County Prosecutor Sherri Bevan Walsh said, "The number of criminals who prey upon people who are just looking for the dream of owning their own home has become shocking. I applaud Attorney General Richard Cordray for aggressively working with us and providing his resources to help stop these criminals and protect our homeowners."
Brian DeStefanis of Medina and Anthony Ramsey of Akron are alleged to have acted as the primary mortgage brokers who orchestrated the fraud by falsifying mortgage applications to justify the loans being requested. While DeStefanis and Ramsey served as conductors, at least 14 other individuals are alleged to have played important roles in the scheme as appraisers, straw buyers and home improvement contractors.
The criminal cases will be prosecuted by the Ohio Attorney General's Special Prosecutions Unit and the Summit County Prosecutor's Office. The Summit County Mortgage Fraud Task Force operates in conjunction with the Ohio Organized Crime Investigations Commission. In addition to the Summit County Prosecutor, agencies participating or assisting in the work of the task force include the Summit County Sheriff's Department, Summit County Fiscal office, Akron Police Department, Cuyahoga Falls Police Department and the Ohio Bureau of Criminal Identification and Investigation.
Other recent developments in major mortgage fraud cases in Ohio include:
• March 2009 Central Ohio Mortgage Fraud Task Force
Two individuals were indicted in connection with $23 million in alleged mortgage fraud, one of the largest mortgage fraud schemes ever in Franklin County. The case is pending in Franklin County Court of Common Pleas.
• June 2009 Summit County Mortgage Fraud Task Force
David Willan and 16 co-defendants were convicted and sentenced in connection with an $18 million mortgage and investment scam involving close to 300 homes. The case was tried in the Summit County Court of Common Pleas.
• August 2009 Cuyahoga County Mortgage Fraud Task Force
Forty-one defendants are charged in connection with real estate transactions involving 453 homes and fraudulent loans totaling $44 million. The case is pending in Cuyahoga County Court of Common Pleas.
• January 2010 Greater Cincinnati Mortgage Fraud Task Force
Four individuals were indicted on federal charges in connection with a $6.7 million loan fraud scheme to sell high-end luxury properties to "straw buyers." The case is pending in U.S. District Court for the Southern District of Ohio.
• March 2010 Greater Dayton Mortgage Fraud Task Force
Gregory S. Chew was convicted of money laundering, mail fraud and wire fraud for his role in a scheme to fraudulently obtain more than $17 million in mortgage loans from more than 39 victimized mortgage lending institutions. Co-defendant Richard C. Confer pleaded guilty on Feb. 19, 2010 to conspiracy to commit money laundering. Sentencing is pending in U.S. District Court for the Southern District of Ohio.
