PAO Cracks Down On Mortgage Fraud

Thanks to a unique partnership with the U.S. Attorney's Office and the State Department of Financial Institutions (DFI), the PAO is cracking down on mortgage fraud.  DFI funds two Deputy Prosecuting Attorneys to prosecute mortgage fraud cases, DPA Amanda Froh and Senior DPA David Seaver.

Senior DPA David Seaver is also cross-designated as a Special Assistant U.S. Attorney.  He reviews all mortgage fraud cases referred to the PAO, and uses the overlapping jurisdiction in these cases to screen local mortgage fraud cases for possible federal prosecution.

Recent changes to state laws have made it easier to prosecute mortgage fraud cases in state court, but in many cases, defendants may face stiffer sentences in federal court, in part because the federal system does not allow a 50% "good time" reduction in sentences.  In addition, defendants who are prosecuted federally may be subject to supervision by U.S. Probation.

Mortgage fraud usually is the result of an elaborate scheme organized and carried out by a number of individuals, some unwittingly.   Because these cases tend to be document-intensive and financially complex, they are often difficult and time-consuming to investigate and prosecute.

In one example of a classic mortgage fraud case, defendant Timothy Morris was convicted of Securities Fraud, First Degree Theft, and Money Laundering for convincing a man to give him $150,000 for "investments."  Morris promised the victim he would return his investment money plus profits on demand within 30 days.  Morris then used the $150,000 for his own purposes.   When the victim demanded his money back, Morris convinced the victim to "refinance" his home by selling it on paper to a "straw" (i.e. fake) buyer.  As part of that scheme, Morris convinced the victim that he would arrange for the victim's son to be the "straw" buyer so that the victim would not lose the house, and could use the sale proceeds to improve his monthly cash flow and get a fresh financial start.  However, the victim soon learned that his home had been sold to a third party who had no intention of owning the property.  Morris had simply paid the third party for use of his name on the paper transaction, and then pocketed the sale proceeds for himself.

In another case, defendant Tiffany Diamond pleaded guilty to First Degree Theft for stealing over $86,000 from a former relative in a mortgage fraud scheme.  Diamond was a mortgage broker who offered to assist a former relative who wanted to pay off the note on his house.  Diamond convinced the victim to write her a check for the note amount so that she could wire it to the bank.  She explained to the victim that he should go along with her plan because "that was what professionals did."  Diamond took the victim's check, deposited it in her own bank account, and went shopping.  The PAO worked with the Clark County Prosecuting Attorney's Office on this case because the Clark County PAO had a bad check case against Diamond.  Diamond pleaded guilty to all counts and received a 16-month exceptional sentence.

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