Some of the house flipping craziness that helped bring on the real estate crash and recession in 2008 wasn’t just a case of folks being too clever by half. In some cases, there was actual fraud going on.
The U.S. Department of Justice recently announced the sentencing of a former Miami mortgage broker and real estate agent who was involved in a multi-million dollar mortgage fraud scheme.
Jose Armando Alvarado, 64, if Miami, was sentenced to serve 135 months in prison for his role in a $2.4 million mortgage fraud scheme. Alvarado was found guilty on Sept. 9, 2013, of eight counts of wire fraud and six counts of bank fraud. He was sentenced on Nov. 14, 2013. In addition to prison time, Alvarado must to serve three years of supervised release.
Two co-conspirators previously convicted of wire and bank fraud were also sentenced on Nov. 14. Former loan closer and title agent Alberto Morejon, 27, was sentenced to serve 36 months in prison. Alvarado’s sister, Reyna Orts, 58, a former mortgage broker and the mother of Morejon, was sentenced to 50 months in prison.
According to the U.S. Department of Justice, Alvarado and his co-conspirators operated a mortgage fraud scheme involving control of three real estate entities in the Miami area from February 2004 to November 2009: South Florida Realty; American Mortgage Lending, a mortgage broker; and Royal Atlantic Title, a title insurance agency.
Alvarado and his co-conspirators reportedly falsified and misrepresented important information provided to financial institutions to fraudulently secure loans totaling more than $2.4 million. Falsified supporting documents included tax returns, W2 forms, bank statements and employment verifications.
Alvarado and his co-conspirators reportedly enriched themselves by diverting loan proceeds, collecting brokerage fees and inflating real-estate commissions obtained through the sales of the properties. They obtained control of multiple properties during the real estate market boom, intending to flip and sell them for a profit or use them as rental properties.