Boston Feds Charge Two In Alleged Condo Conversion, Straw Buyer Mortgage Scam; Nine Units In Four Triple Deckers Wind Up In Foreclosure

From the Office of the U.S. Attorney (Boston, Massachusetts):

• A former Dorchester man and a Wrentham mortgage broker were charged in federal court with wire fraud and money laundering in connection with a mortgage fraud scheme which generated more than $1 million in profits and sending nine properties into foreclosure.

***

• The Indictment alleges that from about August 2006 through February 2007, [DWIGHT] JENKINS and his associates recruited “straw buyers” for the purchase of nine properties for which [ERIC J.] ARCHAMBAULT brokered the mortgages. The nine properties identified in the Indictment were individual units in triple-deckers at 77, 80 and 85 Draper Street, and 35 Harwood Street, all in Dorchester. These properties had been converted to condominiums shortly before the sales to the straw buyers.

• It is alleged that, although the straw buyers took title to the properties and obtained mortgages to finance the purchases, none of the straw buyers actually intended to live in the condominiums they bought or intended to repay the loans. Instead, it is alleged that JENKINS and his associates promised the straw buyers that JENKINS, or his company, would pay the mortgages, maintain the properties, find tenants and then re-sell the properties. JENKINS and his associates allegedly promised most buyers they would be paid a fee for the use of their names and credit histories in securing the loans.(1)

For the U.S. Attorney press release, see Two Charged In $1.3M Residential Mortgage Fraud Scheme.

(1) The Feds also allege that a slew of misrepresentations were made to the lenders in obtaining the necessary financing from them.