As time passes it has become clear that many people have come to the wrong conclusion that creativity in financing is somehow legal. It is not! Just today I heard a radio show where they still talked about creative financing through means that others have found themselves on the back end of a conviction. And in this entry we have another Ohio indictment for bank or mortgage fraud.
According to the indictment, Alati was a property broker who fabricated a false corporate resolution which was presented to the subject title company to obtain checks drawn on Fifth Third Bank’s escrow account related to monies flowing from the sale of homes in Akron, Ohio. Alati had the title company divide the monies in to a few checks and Alati forwarded only one of the checks to the seller, James Carter. Carter was unaware that Alati withheld these checks arising from the transactions. In the last instance of the scheme, Alati advised representatives of the title company that he would deliver a $70,000 check drawn on the Fifth Third escrow account to Carter. However, Alati deposited said check into own business account for his personal use.
COMMENTS: From time to time I have been approached at presentations I make on mortgage fraud issues by people who got caught up in a scheme unaware. Those situations are unfortunate. However, in this case, it seems clear that the actions of Alati were thought out and not the result of a simple mistake. Frankly, rarely have I found that mortgage fraud was occurred as the result of a misunderstanding.
Alati, if convicted, will likely spend time in federal prison. More and more the courts are losing patience with the proliferation of mortgage fraud. As the banking system writes off record losses due to the weakness in the subprime market, the punishment for mortgage fraud crimes will likely become more severe (within the federal sentencing guidelines).
Every choice has a consequence. As a mortgage fraud speaker, I believe that we are just at the beginning of a wave of prosecutions for mortgage fraud.