Monday, July 16, 2012

Buffalo Feds Charge 33 In Alleged Upfront Fee Foreclosure Rescue Ripoff That Screwed 2,000 Homeowners Out Of $2.7M

In Buffalo, New York, The Buffalo News reports:

  • A cross-border loan fraud scheme victimizing 2,000 people and resulting in $2.7 million in losses was uncovered in Buffalo thanks to the initial tips of two suspicious grocery store clerks.

    Prosecutors said the clerks' tips began an investigation that on Tuesday resulted in a 62-count indictment charging 33 defendants with taking part in an international scam directed at people facing home foreclosure.

    "It's exploitation," John Morton, director of U.S. Immigration and Customs Enforcement, said a news conference in Buffalo. "It's targeting the vulnerable." Morton said the scheme was directed at people at the lower rungs of the economic ladder, especially those at risk of losing their home to foreclosure.

    Victims were lured into the scam by newspaper or web advertisements offering loans to anyone having trouble getting a loan or trying to get out of debt. The red flag, according to prosecutors, came at a point early in the loan review process when people were asked to make a security deposit or insurance payment to ensure their loan would be approved.

    "There was a request for an upfront payment," said U.S. Attorney William J. Hochul Jr. "That should have been a warning sign of sorts." All of the defendants - 23 from Canada and 10 from the United States - are charged with conspiracy to commit wire fraud and conspiracy to launder money.

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