Twenty-one people were arrested on Wednesday morning, according to U.S. Attorney Patrick Fitzgerald. Among them, mortgage brokers, loan officers, loan processors, attorneys, accountants, an appraiser and a banker.
The defendants were arraigned in federal court Wednesday afternoon. Most of them are charged with mail and wire fraud.
In each of the transactions, the government actually owned the property, and undercover agents, acting as buyers, told the defendants they intended to default on the mortgage shortly after the closing...yet the feds say they took part in the fraud anyway.
"We want to send a message to people that if they think they can get $150,000 out of a bank by committing mortgage fraud and it's easy money, our view is they're going to walk into a case of agents or informants," said Patrick Fitzgerald, U.S. Attorney.
"It focuses on those in the mortgage industry who have contributed such a huge part in the crisis we are facing in our country," said Robert Grant, FBI special agent in charge.
"My client claims he prepared a tax return but had no idea it would be used for purposes of a fraudulent transaction," said Ralph Schindler, defense attorney.
There were ten indictments on Wednesday; Nine of them resulted from the undercover investigation. The fraud in those cases was $1.4 million, but the government paid back that money to lenders.
The tenth case was actual mortgage fraud, which totaled $4.2 million in loans.
The feds said mortgage fraud is a huge national problem and Illinois ranks third for having the most cases.