Milwaukee-Area Real Estate Operator Pinched For Allegedly Running Straw Buyer/Short Sale Scam; Accused Of Illegally Pocketing $1M+

In Milwaukee, Wisconsin, the Milwaukee Journal Sentinel reports:

• Three of the key figures in a 2007 deal in which a learning disabled man was duped into buying an inner city home are facing unrelated federal mortgage fraud charges.
  
  Randez Long this week pleaded not guilty to charges that he collected more than $1 million by leading a crew of people who scammed lenders into writing inflated mortgage loans during a three-year period when the housing market was booming.
  
  Unlike mortgage fraud schemes that involve one loan, Long is charged with using fraudulent information to have lenders provide two loans for the same property - one when it was initially purchased by one of his associates and a second when the property was later sold to different Long associates.
  
  Long, 33, is charged with money laundering, bank and wire fraud. He is scheduled for trial in February.

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• In the Long indictment, the grand jury charged that he recruited individuals, including his mother and sister, to buy properties in Milwaukee and to obtain inflated mortgages by providing lenders with false information about the buyer's finances and employment. The buyers would quickly default on the loans and arrange for the properties to be sold in a "short sale."
  
  In a short sale, the property is sold for less than the amount owed on the mortgage, and the lender agrees to accept that sale amount.
  
  "In fact, these 'short sales' were fictitious and never occurred," the indictment states.
  
  Instead, the properties were sold to others at a price greater than the amount told to the lenders and new mortgages - again based on fraudulent applications - were received from other lenders, the indictment charges, noting that "Long again received a substantial portion of the sale proceeds."
  
  The case was investigated by the Internal Revenue Service criminal investigation division and the FBI. Though the indictment describes transactions involving two north side properties, a source familiar with the case said Long was involved in the purchase and sale of at least 30 area properties.

For the story, see Three suspects are accused in mortgage fraud schemes.