New unit takes on foreclosure fraud
State grant allows county prosecutors to focus on real estate scammers
Brenda Ahearn/The Gazette
For proof that Prince George's County homeowners are getting ripped off, look no further than the signs posted along roadways, said Del. Doyle L. Niemann (D-Dist. 47) of Mount Rainier.
"It's a cottage industry," he said. "We even have people coming in to teach seminars to others on how to rip people off."
The high number of Prince George's foreclosures — more than 2,000 this spring alone — makes the area ripe for scams that target residents seeking ways to save their homes. The county leads the state in foreclosures, with more than 6,000 homes lost last year.
Starting this fall, Niemann, an assistant state's attorney, and other county prosecutors will make a more concerted effort to target con artists capitalizing on the real-estate market.
Using a $162,500 state grant, county prosecutors announced Tuesday a new unit tasked with targeting cases of mortgage fraud in Prince George's.
The unit joins a list of other county State's Attorney's Office divisions that focus on specific crimes, including homicide and domestic violence, giving it a new concentration.
"I was never able to give it as much attention as I should have," Niemann said. "Now we can."
One case that is getting a lot of attention now in federal court involves the Metropolitan Money Store, a Lanham-based business whose owner and employees have been charged with wire fraud and theft. According to court documents, Metropolitan Money Store workers allegedly profited $35 million by convincing homeowners facing foreclosure to sign away their properties. Homeowners were allegedly told they could continue paying rent to live at the property and buy it back in a year. Federal prosecutors contend that more than 400 people lost their homes after the business borrowed against the value, making it impossible for the owners to buy the homes back.
The case is currently in federal court, where eight people are charged for their alleged transactions in Northern Virginia, Washington, D.C., and Maryland. But it started in Prince George's, where six of the defendants lived, county prosecutors say.
"We were the ones who first started getting calls," said Isabel Cumming, an assistant county state's attorney who specializes in fraud cases. "But when we got to more than 100 victims, we realized it was too big for us."
The new fraud unit hopes to take on similar cases using three attorneys and an investigator to concentrate solely on mortgage cases.
Late last month, the office hired April Richardson, a former private attorney specializing in real estate, and Ted Jones, a former state police trooper who will investigate mortgage fraud complaints for the unit.
The new arrivals join Cumming, a financial crimes specialist, and Niemann, who led legislative efforts to change the state's mortgage foreclosure laws as a delegate.
Jones, who had worked in the department investigating shootings and burglaries before the new job, said the cases are similar. Both focus on people who rob others at their most vulnerable.
"These are actors who are no less worthy than the ones I worked in violent crime," he said.
The unit, which was formed in July, already has already fielded several calls from people who suspect they may have been a victim of mortgage fraud.
But many cases don't qualify. Some owners who complain lost value on their homes due to the tanking real estate market or suddenly faced ballooning interest payments due to adjustable-rate mortgages, said State's Attorney Glenn F. Ivey.
"I'm not saying it isn't unfortunate, but [the] remedy is not criminal," said Ivey, who referred those people to seek help from the state's foreclosure-prevention hotline at 1-877-462-7555.
Prosecutors plan to make defendants pay back the taken money as part of the condition on their sentences, Cumming said.
"Restitution is an essential part," she said.
The grant from the state for the mortgage fraud unit covers the cost of the additional prosecutor, investigator and other expenses and lasts through the fiscal year. Prosecutors said they hope to take on at least six or seven major cases this year.
E-mail Daniel Valentine at email@example.com
Avoiding foreclosure scams
Prince George's County's lead in the state in home foreclosures have made it a hot spot for con artists looking to swindle struggling homeowners, prosecutors say. Here are some warning signs and advice from prosecutors on how to avoid a mortgage scheme:
Beware of secrecy. Any deal involving a title transfer, refinancing or home sale is legally required to be publically advertised. Beware of anyone who doesn't want you to contact mortgage lenders, real estate agents or lawyers for advice.
Resist easy solutions. Mortgage con artists prey on people when they are most desperate. Promises of restoring bad credit or getting to live in your home are often fake and illegal.
Reach out early. The best way to avoid a mortgage con is to stay ahead on payments. A state hotline has been set up to help struggling homeowners renegotiate terms of the mortgages or get short-term loans, but the process usually depends on homeowners seeking help before they fall behind. To discuss options, call the state hotline at 1-877-462-7555.