N.C. Foreclosure Fraud Scheme Is Cut Off
Federal authorities reported they have halted a homeowners association foreclosure fraud scheme, after a nearly three-year investigation. Federal authorities seized gold, cash, and other property from a Raleigh, N.C., man accused of fraudulently scooping up homes in foreclosure. He was charged with multiple counts of bank fraud and engaging in monetary transactions involving criminally derived property, among other crimes.
In 2014, planned community neighbors called police when they saw the man drilling the locks on the front door of a home that had been foreclosed on. Police eventually dropped all charges against him when he showed that he had purchased the title of the $300,000-plus home, which the association had foreclosed on for nonpayment of dues.
But the arrest prompted a federal investigation into further real estate transactions by the man and turned up a disturbing scheme. The man allegedly obtained eight properties in various planned communities through homeowners association foreclosures, using aliases to bid on properties and funneling money through holding companies. He would produce fraudulent documents showing the mortgages had been paid off and that he had clean titles to the properties and would liquidate the holding companies as soon as the properties had been resold, according to an indictment.
A forfeiture order accuses the man of quickly turning almost all of his $1.3 million in profits into cash to make it harder for authorities to find. But the IRS was able to track down $44,000 in cash from various bank accounts, as well as $225,000 in gold coins, $100,000 in equipment for a recording studio, and numerous prepaid debit and gift cards. Additional items, such as his car and electronics were also seized. The neighbors who contacted the police in 2014 about the suspicious drilling activity said they were happy that someone taking advantage of associations is being held accountable for criminal behavior.