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Feds Bust Massive Mortgage Fraud Scheme

A real estate agent named Edgar Tibakweitira, who also went by the names "Edgar Julian," “Charles Edgar Tibakweitira" and “Edgar Gaudious Tibakweitira,"of Severn, Maryland, used his position to deceive clients and commit a massive mortgage fraud scheme. According to the U.S. Department of Justice, he built a group of co-conspirators who obtained mortgages for properties at values well above the properities' actual market values and pocketed the excess funds. He defrauded lenders, the Federal Housing Authority, Fannie Mae and Freddie Mac of nearly $2.5 million. Recently convicted of conspiracy to commit wire fraud and aggravated identity theft, Tibakweitira will spend the next 57 months in prison.

Tibakweitira and his co-conspirators caused lenders to provide fraudulent residential mortgage loans to straw buyers by using stolen or false identities, as well as using false W-2 forms, earnings statements and bank statements. Furthermore, Carmen Johnson, one of Tibakweitira's co-conspirators, used her company CJ Lending to create fictitious lines of credit for straw buyers to fraudulently boost their credit appeal. Fraudulently obtained loans were disbursed from escrow accounts to Destiny Property Management, LLC and Destiny Property Management Company, which were shell companies owned by Tibakweitira, under the false pretense that the money would be used for repairs and renovations.

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This is just one of the recent examples that indicate that mortgage fraud is happening, and that the risks are severe. The FBI warns that mortgage fraud is a growing crime threat that is hurting homeowners, businesses and the national economy. Characterized by some type of material misstatement, misrepresentation or omission on a loan which is then relied upon by a lender, mortgage fraud can take many forms, involving schemes such as equity skimming, illegal property flipping, loan modification schemes and foreclosure rescue schemes, among others.

Fortunately, there are some best practices individuals can consider to protect themselves against mortgage fraud.

1. Seek Referrals for Real Estate and Mortgage Professionals

It's helpful to get referrals for real estate and mortgage professionals from people you have a history with and can trust. In addition, you should be sure the professionals are licensed. You can check that the license is current by contacting your state, county or city regulatory agencies.

2. Read Documents Carefully

Paying attention to all of the documents you're provided could help tip you off to anything that seems suspicious. You should be sure you understand what you're signing and that your personal information listed on your mortgage is accurate. Also be on the look out for blank spaces on the documents you are asked to sign, which could enable a criminal to commit fraud. In some cases, you can also rely on outside information to fact-check your documents. For example, recent comparable sales in the area and tax assessments can help verify the value of the property.

3. Review Your Property's History

Review the title history of the home you are anticipating to purchase to determine if the property has been sold multiple times within a short period. This could signal that this property has been “flipped" and the value has been falsely inflated.

4. Be Wary of Things That Seem Too Good to Be True

The promise of an extraordinary gift or advertisements that promote the elimination of mortgage loan debt are usually too good to be true. When confronted with this type of offer, don't share personal information.

5. Seek an Attorney When in Doubt

Don't hesitate to seek the help of an attorney or third party who represents your interest if you don't fully understand the documents provided. Although there may be an initial cost up front, the investment could be well worth it if it helps protect you against mortgage fraud or even when it comes to your peace of mind.

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