Wednesday, June 5, 2013

Cincinnati-Area Trio Get Federal Time For Peddling Bogus Sale Leaseback Ripoffs That Left Financially-Strapped Victims Booted From Homes, Unwitting Straw Buyer/Investors Drowning In Debt With Ruined Credit On Artificially Inflated, Underwater Mortgages

In Cincinnati, Ohio, The Enquirer reports:

  • Men from Mason, Monroe and Covington were sent to federal prison for a foreclosure-rescue scheme that left victims facing foreclosure, bankruptcy and ruined credit, authorities say.

    On Thursday, a U.S. District judge in Cincinnati sentenced Adam P. Moellers, 35, of Mason, to three years in prison and sentenced Gary P. Dailey, also known as Gary Klump, 33, of Covington, to a 21-month prison term. A third defendant, Perry Bensick, 37, of Monroe, was previously sentenced to a year in prison.

    Moellers and Besnick each had pleaded guilty to a count of conspiracy; Dailey pleaded guilty to a count of wire fraud, a news release said.

    The men were involved with a company called American Equity Group.

    Here’s how their scheme worked, authorities said: The company approached homeowners facing foreclosure and pledged to find buyers who would allow them to remain in their homes as renters and later repurchase their homes.(1)

    The company promised investors that they could buy a property with no money down, collect rent for a year or two then sell it back to the renter at a profit.

    But “AEG inflated the sale price, put together fraudulent loan applications, and took out extra cash at closing,” the release said. “The renters never purchased the properties back and the investors couldn’t afford to keep them.”

    “As a result, the properties went into foreclosure with even larger loan balances and with investors/borrowers who did not appreciate the risk that they had undertaken,” Assistant U.S. Attorney Timothy Mangan wrote in a court filing.

    The FBI calculated that in 2006 and 2007, the scheme caused losses of $6,849,460 to lenders; the court will decide how much restitution the defendants must pay.

    “The lenders were not the only victims,” Mangan told the court. “For the investors, they typically ended in bankruptcy or with ruined credit in exchange for a rescue plan by AEG that was doomed to fail.”
Source: $6.8M scam leaves trail of foreclosures, bankruptcies.

See also, Four Charged With Running $13 Million Loan Fraud Scheme.

(1) For more on this type of foreclosure rescue ripoff, see:

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