Minnesota Financial Crimes Task Force Dropping Mortgage Fraud from Menu

by Alex Stenback on March 26, 2008

Not sure how we missed this gem from Jennifer Bjorhus last week (we’ll blame the Pioneer Press RSS feed):

As for the Minnesota Financial Crimes Task Force, its 17-member oversight council in January instructed the group to shut the door on mortgage fraud, saying the cases were so time-consuming they threatened to overwhelm the group. Chris Omodt, a Hennepin County Sheriff’s lieutenant who heads the task force, said he thinks crimes will go unchecked, but acknowledges it doesn’t have the resources

This means that unless a new Minnesota task force is created to specifically tackle mortgage fraud, all of the heavy lifting will be done by the (also overwhelmed) Federal Investigators working locally. 

This in a state that is in the top ten nationally for mortgage fraud.

{ 7 comments… read them below or add one }

duane March 26, 2008 at 1:45 pm

That’s like the police giving up on stopping the murders in North Minneapo…. ooops.

“yeah we have way too many murders to investigate in North Mpls, so we don’t anymore”

Johnny Northside March 27, 2008 at 4:24 pm

My sure-to-be controversial theory on this is articulated at my blog, http://www.johnnynorthside.com, in the entry called “Mortgage Fraud: YOU CAN’T *HANDLE* THE TRUTH!

http://adventuresofjohnnynorthside.blogspot.com/2008/03/mortgage-fraud-you-cant-handle-truth.html

Johnny Northside March 27, 2008 at 11:40 pm

OK, but I’ll share it with you. Since you’re all so eager.

In a nutshell: the powers-that-be have made a decision not to go after mortgage fraud and instead pursue so-called predatory lenders.

Mortgage fraudsters often can’t be found and have probably spent most of the money on high living. Bankers, on the other hand, are easy to find and have “deep pockets.”

Going after the mortgage fraudsters would only give defenses to the (so-called) predatory lenders because they could say, “But these people were CRIMINALS. They told lies to get this money.”

No, the authorities are going to skip the complex, expensive mortgage fraud investigations which will result in no money recovered. They’re going to go after the banks instead.

It’s wrong and I’m calling BULLSHIT on it.

raspberry3 March 28, 2008 at 1:59 am

Yes, there is mortgage fraud, but I think the more prevalent issue is of flippers who thought that they could get rich buying houses on the cheap and selling them to the next moron. So far I have not seen anyone expose the extent of speculation. I think it would be of great value if someone could mine the sherriff’s foreclosure date.

For example, here are some sample results from the Sherriff’s data regarding folks who were planning to flip several properties and got foreclosed on:

Sale Record Number Unverified Common Address Date of Sale Mortgagor(s) Type of Sale
0710146 3306 James Ave N, Minneapolis 10/9/2007 Michael Pletan, Mortgage
0710206 3415 Emerson Ave N, Minneapolis 10/11/2007 Tamara Pletan, Mortgage
0710207 3812 Park Ave S, Minneapolis 10/11/2007 Tamara Pletan, Mortgage
0710256 3326 Russell Ave N, Minneapolis 10/16/2007 Michael Pletan, Mortgage
0710411 2514 Pierce St NE, Minneapolis 10/24/2007 Michael E Pletan, Mortgage
0710412 3339 James Ave N, Minneapolis 10/24/2007 Michael E Pletan, Mortgage
0710421 3240 Sheridan Ave N, Minneapolis 10/24/2007 Michael Pletan, Mortgage
0711161 4940 Bryant Ave N, Minneapolis 11/8/2007 Michael Pletan, Mortgage
0711201 4038 Dupont Ave N, Minneapolis 11/13/2007 Tamara Pletan, Mortgage
0711202 3656 Morgan Ave N, Minneapolis 11/13/2007 Tamara Pletan, Mortgage
0711272 4827 Fremont Ave N, Minneapolis 11/15/2007 Tamara Pletan, Mortgage
0711449 3443 Russell Ave N, Minneapolis 11/27/2007 Michael Pletan, Mortgage
0712124 3710 Morgan Ave N, Minneapolis 12/6/2007 Tamara Pletan, Mortgage
0712438 3649 Logan Ave N, Minneapolis 12/20/2007 Michael Pletan, Mortgage
0801245 3507 Knox Ave N, Minneapolis 1/10/2008 Tamara Pletan, Mortgage
0801417 1643 Upton Ave N, Minneapolis 1/17/2008 Michael Pletan, Mortgage
0801421 3518 Girard Ave N, Minneapolis 1/17/2008 Michael Pletan, Mortgage
0802239 3443 Washburn Ave N, Minneapolis 2/14/2008 Michael Pletan, Mortgage
0802319 3359 Benjamin St NE, Minneapolis 2/19/2008 Michael Pletan, Mortgage
0803342 3626 Bryant Ave N, Minneapolis 3/19/2008 Michael Pletan, Mortgage
0803344 3350 Colfax Ave N, Minneapolis 3/19/2008 Michael Pletan, Mortgage
0803498 3229 Humboldt Ave N, Minneapolis 3/27/2008 Tamara Pletan, Mortgage

Sale Record Number Unverified Common Address Date of Sale Mortgagor(s) Type of Sale
0712033 2946 Queen Ave N, Minneapolis 12/4/2007 Wendy Sullivan, Mortgage
0712126 2700 Irving Ave N, Minneapolis 12/6/2007 Wendy D Sullivan, Mortgage
0712411 2811 Newton Ave N, Minneapolis 12/20/2007 Wendy D Sullivan, Mortgage
0712417 2211 Thomas Ave N, Minneapolis 12/20/2007 Wendy Sullivan, Mortgage
0801089 1527 Sheridan Ave N, Minneapolis 1/7/2008 Wendy Sullivan, Mortgage
0801148 2020 Fremont Ave N, Minneapolis 1/8/2008 Wendy Sullivan, Mortgage
0801293 2709 Aldrich Ave N, Minneapolis 1/11/2008 Wendy D Sullivan, Mortgage
0801302 1729 8th Ave N, Minneapolis 1/14/2008 Wendy N Sullivan, Mortgage
0801364 2126 James Ave N, Minneapolis 1/16/2008 Wendy Sullivan, Mortgage
0801365 3014 Newton Ave N, Minneapolis 1/16/2008 Wendy D Sullivan, Mortgage
0801428 2231 3rd St N, Minneapolis 1/17/2008 Wendy Sullivan, Mortgage
0801432 2919 Logan Ave N, Minneapolis 1/17/2008 Wendy D Sullivan, Mortgage
0801525 2601 Humbodlt Ave N, Minneapolis 1/23/2008 Wendy Sullivan, Mortgage
0801583 3023 Dupont Ave N, Minneapolis 1/24/2008 Wendy D Sullivan, Mortgage
0801584 2106 23rd Ave N, Minneapolis 1/24/2008 Wendy D Sullivan, Mortgage
0801652 4142 Girard Ave N, Minneapolis 1/29/2008 Wendy Sullivan, Mortgage
0801683 2512 23rd Ave N, Minneapolis 1/30/2008 Wendy Sullivan, Mortgage
0802057 3406 Penn Ave N, Minneapolis 2/5/2008 Wendy Sullivan, Mortgage
0802153 7904 Yates Ave N, Brooklyn Park 2/8/2008 Wendy D Sullivan, Mortgage
0802554 3200 Aldrich Ave N, Minneapolis 2/29/2008 Wendy D Sullivan, Mortgage

Sale Record Number Unverified Common Address Date of Sale Mortgagor(s) Type of Sale
0705310 6050 Oakview Ct, Shorewood 5/17/2007 Ammar Khawaja, Mortgage
0706052 607 Washington Ave S #203, Minneapolis 6/6/2007 Ammar A Khawaja, Mortgage
0706087 607 Washington Ave S #305, Minneapolis 6/7/2007 Ammar Khawaja, Mortgage
0706309 2938 Bryant Ave N, Minneapolis 6/25/2007 Ammar Khawaja, Mortgage
0707041 6090 Oakview Ct , Shorewood 7/5/2007 Ammar Khawaja, Mortgage
0707201 6080 Oakview Crt, Shorewood 7/12/2007 Ammar Khawaja, Mortgage
0708001 3044 Pleasant Ave S, Minneapolis 8/1/2007 Ammar Khawaja, Mortgage
0708362 6040 Oakview Ct, Shorewood 8/23/2007 Ammar Khawaja, Mortgage
0709106 3044 Pleasant Ave S #202, Minneapolis 9/6/2007 Ammar Khawaja, Mortgage
0803161 6090 Oakview Ct, Shorewood 3/10/2008 Ammar Khawaja, Mortgage

Sale Record Number Unverified Common Address Date of Sale Mortgagor(s) Type of Sale
0706396 411 Franklin Ave W, Minneapolis 6/28/2007 Marcos A Herrera, Mortgage
0707087 3049 Calhoun Prkwy E, Minneapolis 7/9/2007 Marcos A Herrera , Mortgage
0708270 2601 Columbus Ave S, Minneapolis 8/16/2007 Marcos A Herrera, Mortgage
0710148 3033 Portland Ave S, Minneapolis 10/9/2007 Marcos A Herrera, Mortgage
0711400 3034 Knox Ave S, Minneapolis 11/21/2007 Marcos Herrera, Mortgage
0802390 2841 Lake of the Isles Pkwy E, Minneapolis 2/22/2008 Marcos A Herrera, Mortgage

Sale Record Number Unverified Common Address Date of Sale Mortgagor(s) Type of Sale
0711300 2100 1st Ave S, Minneapolis 11/16/2007 Rajesh Dash, Kelly Lamphear-dash Judgment
0711302 3130 Pillsbury Ave S, Minneapolis 11/16/2007 Rajesh Dash, Kelly Lamphear-dash Judgment
0712432 3112 Lyndale Ave S, Minneapolis 12/20/2007 Kelly Lamphear-Dash, Rajesh S Dash Mortgage
0801074 2023 2nd Ave S, Minneapolis 1/4/2008 Rajesh S Dash, Kelly Lamphear Dash Mortgage
0802052 3605 3rd Ave S, Minneapolis 2/5/2008 Rajesh Dash, Kelly Lamphear-dash Mortgage

The person above is a realtor, so much for their oft touted market analysis.

These are the guys who are walking away from their financial obligations and bringing down the Bear Stearns of the world. Who knows how ugly this situation really is?

Alex/Editor March 28, 2008 at 8:45 am

One thing to keep in mind, regarding the above list, is that many of the mortgage holders in these foreclsoures are straw buyers, and almost universally victims of outfits like Universal Mortgage, TJ Waconia, and others.

In other words, these outfits get a hold of a borrower, or “potential investor” and give them a sales pitch along the lines of:

“We’ve set up a real estate investment program, where we will coordinate the purchase of multiple properties for you, and then put rent to own buyers in them for you, and manage the whole process – you don’t have to do a thing. These buyers will then repair their credit (using our proven credit repair system) and buy the home from you at a pre-determined price in two years, at which point you make a profit, while in the meantime you collect rent from these folks.”

What really happened, is once they got an “investor” to fall for this – and don’t underestimate the sophistication of the sales pitches used, many of them were VERY slick, with letters from attorneys verifying the legality of the whole thing – they took their information, usually armed with only a good credit score and a valid social security number, and used it to committ multiple acts of mortgage fraud (bogus income, jobs, and assets, bogus appraisals, sham disbursements of loan proceeds, forged signatures, the whole bit.) Essentially using these peoples credit and other information to obtain a loan on a home with an artificially inflated or purely fictional value – remember, appraisers had to be in on the hustle – then pocket the proceeds.

It was all an inside game and a con job – the perpetrators usually owned the properties they were selling to their “investors” or were using a new crop of straw buyers to take out the previous straw buyers who’d already been bled dry. The properties often were never rented at all, and almost immediately went into foreclosure. The victims would all of a sudden get foreclosure notices on multiple properties having NO CLUE that they “bought” them in the first place.

The victims here are not without culpability, and for certain some/many of the parties in foreclosures knew about and benefited from the sham kickbacks. However, in most cases, the victims were guilty of stupidity and falling for a very sophisticated sales pitch, which was sold as a way to get rich in real estate, but amounted to nothing more than a very sophisticated form of identity theft.

See, if you steal someones identity and they don’t have any money, there’s not much to steal, but if you use that identity to create a fictional/rigged real estate transaction to steal money from a mortgage lender or bank, the payoff for these criminals can be huge – $100k or more at a pop.

The lenders, for their part, made it all too easy, letting any jerk off the street broker-originate stated income and other forms of bullshit mortgage paper. They are now reaping what they’ve sown.

Johnny Northside March 29, 2008 at 12:29 am

The mortgage fraud and scheming isn’t over yet, from what I saw today. I was out on the North Side checking out the house I’m buying and I was dealing with BLATANT AND OUTRAGEOUS ELECTRICITY THEFT from a neighbor…I’ll be blogging about this in the near future…but guess what?

I was offered an opportunity to “rent my credit” and buy some houses.

Oh, yes, a guy who owns two houses on the same block–and I know he really does, because I talked to a building inspector about the neighborhood while we dealt with the electricity theft issue–gave me his pitch about my credit score, and how he could help me buy a bunch of houses and “rent” my credit score.

All this while he ADMITTED the two houses on the block were going into foreclosure. But that was OK, he said. Maybe he could “sell short” and find a way to “repair his score” and start all over!

So not only are criminals getting away but the fact they are getting away is just going to encourage new types of fraud. Think the fraud has gone away? I doubt it.

Oh, also, posting that information about the foreclosures is great. But since the county website isn’t easily searchable by name and owner like it can be searched by PIN and address, these patterns are a pain to search out.

You can’t plug in a term like “Irene Thomas” and have the county website spit out all the addresses she owns. You have to somehow get a list of addresses, then pull up each of them and find a connection to Irene Thomas.

So this is another flaw in the system. And I’ve pointed that out to the city and county but I’ve gotten nowhere with that.

Bruce March 30, 2008 at 5:46 pm

It can easily be done on the Northatar MLS system. Speak with a realtor that you know and they can pull it up for you. I have looked at properties that are in default located in Wright County and I have found, that a large majority of these properties owners, own multiple homes. The largest amount so far is twenty eight homes, all in some form of default, all owned by the same family.

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