Mortgage Fraud Alive and Well in Ohio! Steven C. Gittinger Pleads Guilty to Mortgage Fraud Scheme Role

Either there is something in the water in Ohio when it comes to Mortgage Fraud – or – the US Attorney and others involved in law enforcement are serious about this wave of white collar crime. Either way, it seems that Ohio is talking a leading role in rooting out those involved in Mortgage Fraud.

Another Mortgage Fraud casualty is Steven C. Gittinger, who at age 50, pleaded guilty in United States District Court to one count of conspiracy to commit bank fraud and one count of money laundering for his participation in a mortgage fraud scheme.

According to a statement of facts filed with his guilty plea, Gittinger was a principal of Classic Title Agency, Inc. and helped close real estate sales. Between June 2003 and 2005, Gittinger received business and made money for performing closings of real estate sales. In 2003, Gittinger made various fraudulent representations on closing documents in which misrepresentations were made, then forwarded to financial institutions which funded loans for the property.

Gittinger agrees that for the purpose of the Sentencing Guidelines the amount of loss attributable to him is more than $400,000.00 but less than $1,000,000.00. Conspiracy to Commit Bank Fraud carries a maximum penalty of not more than thirty years imprisonment, a fine of up to $1,000,000 (or twice the gross gain to the defendant or loss of the victim. Money Laundering carries a maximum penalty of not more than ten years imprisonment, a fine of up to $250,000 (or twice the gross gain to the defendant or loss of the victim.

Since I jokingly mentioned Ohio as a hot spot…I decided as this was being written to verify if I was dreaming or has Ohio become a mortgage fraud “hot spot?” Interestingly enough with little effort the following was found on the FBI’s web site under mortgage fraud.

  • Analysis of available law enforcement and industry resources indicates that the top ten mortgage fraud areas are California, Florida, Georgia, Illinois, Indiana, Michigan, New York, Ohio, Texas, and Utah. Other areas significantly affected by mortgage fraud include Arizona, Colorado, Maryland, Minnesota, Missouri, Nevada, North Carolina, Tennessee, and Virginia. There is a strong correlation between mortgage fraud and loans which result in default and foreclosure.
  • Recent statistics suggest that escalating foreclosures provide criminals with the opportunity to exploit and defraud vulnerable homeowners seeking financial guidance. Perpetrators are exploiting the home equity line of credit (HELOC) application process to conduct mortgage fraud, check fraud, and potentially money laundering-related activity.
  • The FBI is proactively working with the mortgage industry in an effort to curb mortgage fraud crimes. The FBI signed a memorandum of agreement with the MBA to promote the FBI’s Mortgage Fraud Warning Notice.

Mortgage Fraud is defined as the intentional misstatement, misrepresentation, or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide funding for, to purchase, or to insure a mortgage loan.

As a mortgage fraud and white collar crime speaker, I receive many calls from people who either think they may have become involved in committing some form of mortgage fraud or who have been convicted and wonder what is next. There is a clear pattern that seems to emerge. Either, the people involved are clearly doing what they know is wrong for immediate and personal (ill gotten) gain, or they are pushing the system for the purchase of property and doing so with the help of professionals who know where the gray areas are and just how far to push it.

Remember, if you do anything that is inaccurate and do so for the express purpose of having a financial institution to make a loan based on your representations – you may be guilty of mortgage fraud.

If you think you’ve been a victim feel free to comment!

White Collar Crime Speaker – Chuck Gallagher – signing off…

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10 Responses to Mortgage Fraud Alive and Well in Ohio! Steven C. Gittinger Pleads Guilty to Mortgage Fraud Scheme Role

  1. Diane Elam says:

    My soon-to-be ex-husband took out a secondary loan on our home recently and forged my name on the paperwork. He has been writing checks from this loan. I verified that it was not my signature on the documents. The bank trusted that a long time customer would not forge his own wife’s name. The soon-to-be ex-husband is in the wrong, but is the bank liable for any of this? The loan was for $190,000.

  2. Likely yes, but the answer is best found through seeking advice from an attorney licensed in your state.

  3. Dustin Goldie says:

    This is a great article. Steven Gittinger actually closed a couple of my loans. I was shocked he was involved in this. The real story should be about the grand scheme that Mr. Gittinger was a part of. The real mastermind behind the entire issue was Toby Groves. Toby Groves was the President and C.E.O of Groves funding in Cincinnati. He is now serving time for his part in this mortgage fraud scheme. Several innocent people had their lives ruined because of his scheme. My father was one of them. My father was named in the class action lawsuit against Toby Groves. My father had to spend nearly $40,000 in attorney fees to clear his name. He was found innocent by a district judge in Georgia. My father’s signature was forged on documents to help benefit Toby Groves financial status. My father got paper work in the mail one day showing he owned 4 ocean front properties in Florida worth $600,000 a piece and the mortgage on each one of them was $4,400 per month. My father made only $25,000 a year as Toby Groves farm hand. Now my fathers credit is shot, his attorney fees are piling up, and any plans on retirement are over.

    Its a shame that the maximum penalty is not used on these people, instead Mr. Groves will only have to serve about two years in Federal Prison.

    • HC says:

      Actually Toby didn’t even serve that long. He is already out of jail and running another business. My brother was also named in the lawsuit against Toby Groves. He got a lawyer and was told it would be tens of thousands of dollars to clear his name. He told the lawyers no thank you and called Regions bank and offered them any help they needed so he could clear his name. He spent no money on lawyer fees and was finally cleared of all wrong doing. It is hard to tell the real criminal, Toby Groves or the lawyers on both sides ripping innocent people off.

  4. charlieB says:

    Dustin- sorry hear about your dad. I worked in the Loan industry in Vegas for 4 yrs and unfortunately none of this surprises me. Much of the fraud in this space has to do with greed as we see from this example and a lot of it has to do with lack of education and people not knowing that stuff like this could lead to jail time.

    Loan Officers and everyone else involved in real estate transactions should be tested prior to get their license. Ohio for example requires fingerprint cards, continuing ed, and individual loan agent licensing- so its ahead of most states- but they need testing. here is a breakdown of Ohio’s mortgage laws for those that are curious.

    http://www.bankapedia.com/mortgage-encyclopedia/state-mortgage-laws/627-ohio-mortgage-laws

    The other thing that would cut way down on fraud- is keeping an arms length distance between lenders- title companies – and appraisers.
    There should be little to no interaction between these parties. Illinois just passed a law doing just this. It will cut way down on fraud. It probably would have prevented something like this

  5. Kimberly Groves says:

    You should all really check your facts. Some just love to get attention as the “victim” when they are the dirty soles that can’t sleep with themselves at night.

  6. Darwin Grant says:

    Extremely wonderful post, genuinely useful stuff. Never believed I would find the information I would like in this article. I’ve been scouring all over the internet for some time now and had been starting to get disappointed. Luckily, I came onto your site and acquired precisely what I was struggling to find.

  7. Guage Steele says:

    Please update your blog. Mr. Gittinger was cleared of charges and the records expunged. His law license was restored after a judge reviewed the actions of the FBI in this case and saw that they had, in effect, blackmailed Mr. Gittinger into taking a plea deal because they couldn’t make the deal stick hard enough to the real crook, Toby Groves. Instead of placing a story on your blog and failing to follow up, perhaps some journalistic integrity is in order? Oh yeah, you’re a blogger trying to increase your SEO rankings in order to drive more applicants to your website, not a journalist…Silly me!

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