A federal jury in Chicago has convicted a loan originator of orchestrating a mortgage fraud scheme that bilked multiple financial institutions out of $2.6 million.
Kevin Smith, 52, of Melrose Park, Ill., was found guilty of all five bank fraud counts against him. Each count is punishable by up to 30 years in federal prison. U.S. District Judge John Kness set sentencing for Dec. 17.
Smith was a loan originator for a mortgage lending businesses that originated and processed loans for real estate purchases in the Chicago area. Evidence at the two-week trial revealed that Smith engaged in a scheme to fraudulently obtain approximately $2.6 million in federally guaranteed mortgage loans in connection with the purchase of 14 properties in Chicago. Smith recruited buyers at real estate investment seminars held in Chicago-area churches and hotels and caused them to make false representations to lenders about, among other things, the source of their down payments and their intention to occupy the properties as their primary residences. Smith provided or caused others to provide funds to the buyers for use as down payments, knowing the lenders would be falsely led to believe the money belonged to the buyers. After a closing and the issuance of the government-insured mortgage loans, Smith made payments to the buyers – describing them as “grants” – and then pocketed payments from the sellers without notifying the lenders.
The conviction was announced by Morris Pasqual, acting U.S. attorney for the Northern District of Illinois; Machelle Jindra, special agent-in-charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago, and Gregory Billingsley, special agent-in-charge of the Department of Veterans Affairs, Office of Inspector General, Central Field Office. The government is represented by Assistant U.S. Attorneys Rick Young and Misty Wright.