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12-13-07, 07:27 AM
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Straw Buyers' Ran Up Mortgage Loan Scam Straw buyers' ran up mortgage loan scam 15 CHARGED | Allegedly borrowed more than homes worth December 13, 2007 BY FRANK MAIN AND ERIC HERMAN Staff Reporters In what authorities say is a symptom of the excesses in the subprime mortgage market, 15 people are charged with fraud involving at least nine homes valued at more than $4 million. The scam -- led by a mortgage broker and a real-estate agent -- involved "straw buyers" taking out mortgages on homes for more than the asking price, officials said. The extra money allegedly was divvied up among the participants. Police seized a $700,000 stock portfolio with other proceeds from the alleged scams. Court records do not give a total for the money allegedly stolen. The "common thread" was Durrel Castile, 26, and Andrew Lewis Jr., 34, Assistant Cook County State's Attorney Karyn Stratton said. Lewis is free on $2 million bond. He "did absolutely nothing wrong," said his lawyer, Michael Gillespie. Castile remains in county jail. The investigation, dubbed Operation Hit the Road Jack, began in February and was named for Gregory Jackson, 42, who lived at 1529 S. State. Police arrested Jackson for drug and weapon possession. The investigation led police to Castile and Lewis, who lived in the same building. The two were charged in October with organizing a financial crimes enterprise and face six to 30 years in prison. Castile and Lewis -- once an Arthur Andersen accountant -- allegedly took advantage of loose requirements for certain mortgages available in 2005 and 2006. Lenders offered the loans for 100 percent of a home's price. To get the high-interest loans, borrowers only had to verify they had a job, but did not have to verify their income. Straw buyers recruited by Castile, Lewis and others falsified their incomes and employment on loan applications, officials said. The alleged straw buyers include Castile's sister, Javeen Castile, 31, a former Sun-Times editorial assistant; Jean Simmons, 74, a former clerk at the Cook County Jail hospital; and Essie Crawford, 59, who allegedly lied on loan applications that she worked for pizzerias. Thomas Fornarelli is charged with giving lenders false information about Crawford's work. The victims were the lenders and neighbors, whose property taxes could rise because of the inflated values, officials said. Most of the homes were in the South Loop -- and many have fallen into foreclosure. MORE Suntimes.com ONLINE
__________________ Last edited by Scrub; 12-13-07 at 07:28 AM.      |
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