Tuesday, August 23, 2011

Cincinnati Feds Bust 4 Sale Leaseback Peddlers Accused Of Running F'closure Rescue, Equity Stripping Racket Targeting No Cash, High Equity Homeowners

From the Office of the Ohio Attorney General:

  • A federal grand jury has indicted four people(1) who ran a Cincinnati real estate business known as American Equity Group (AEG) with fraudulently obtaining more than $13 million in loans through a loan fraud scheme that targeted homeowners or builders in or near foreclosure.

  • Ohio Attorney General Mike DeWine, Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the indictment today. These agencies are members of the Greater Cincinnati Mortgage Fraud Task Force.


  • According to the indictment, they conspired to locate distressed properties that were in or nearing foreclosure or that needed to be sold quickly. They would typically promise the sellers that they could continue to live in the property as a renter, then purchase the property back after AEG assisted the homeowner with repairing their credit.

  • The defendants are accused of finding "investors" to purchase the property, often at inflated values, with the promise that the mortgage would be paid through rent payments from the original seller and that the original seller would purchase the property back within a short period.

  • After the properties were stripped of any equity, they would be back in foreclosure again, and the distressed homeowners wouldn't have any standing in court because they no longer owned the properties. The "investors" who bought the houses were left with the debt.

For the Ohio AG press release, see Attorney General DeWine Announces Foreclosure Rescue Actions.

(1) According to the press release, the indictment charges Adam Moellers, 33; Gary Dailey, a.k.a Gary Klump, 32; Perry Bensick, Jr., 35; and Gary Dailey's mother, Mary Dailey, 50; all of Cincinnati, with wire fraud, mail fraud and conspiracy. The indictment alleges that the four worked together at AEG, which also operated under the names Equity Financial Solutions and Equity Financial Group, and carried out the scheme between July 2006 and October 2007.

No comments: