• Scam Diego alerts

The U.S. attorney's office today (April 7) unsealed an indictment charging 24 individuals with running a mortgage fraud scheme involving 220 properties that collectively sold for $100 million. One of the lead defendants, Darnell Bell of Chula Vista, is currently in federal custody on a charge of cocaine distribution. According to the U.S. attorney's office, the defendants would find phony "straw" buyers for deeply discounted properties on the market. They would make offers on the properties based on inflated appraisals. Then they would prepare false loans applications for the straw buyers. The defendants fallaciously told lenders that the amount of money exceeding the asking price would go to pay for handicapped accessing. But the money didn't go there; it became a kickback to a member of the conspiracy, charges the government. The straw buyers failed to make payments and the properties were foreclosed upon, inflicting financial damage on the lenders.

  • Scam Diego alerts


Visduh April 8, 2009 @ 11:20 a.m.

If the lenders were doing due diligence verification of the borrowers, this never would have happened. It's just another manifestation of the crazy and lax lending that went on in recent years. We will probably learn of many more groups of conspirators all around the nation doing substantially the same sort of things to bilk the negligent lenders.


Don Bauder April 8, 2009 @ 11:38 a.m.

Response to post #1: Right you are. These SD folks were working the same scam that Nicholas Charles Herbert was working in Orange County, as related in my Feb. 18 column, "Pacific Beach Scoundrel Time." In the 1990s, Herbert got caught selling homes that he didn't own out from under elderly and mentally impaired people. He went to the slammer for that, and later went to Orange County, where, using straw buyers, he would pick up real estate at artificially inflated prices, and make up fraudulent loan packages, raking in fees and commissions. The homes would quickly go into foreclosure and the lenders would lose. As you point out, Herbert and these San Diego fraudsters were illegally taking advantage of lax loan standards of the financial institutions. Best, Don Bauder


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