Two licensed brokers, three attorneys indicted on mortgage fraud charges

April 07, 2010 09:39AM

Two real estate brokers, three attorneys and five others were indicted and charged yesterday in an alleged $10 million mortgage fraud scheme that used straw buyers, falsely inflated appraisals and other fake documents to obtain loans from American Home Mortgage, Fremont Bank, BNC Mortgage, a subsidiary of Lehman Brothers, and WMC Mortgage, a subsidiary of GE Money Bank. The group allegedly carried out the scheme at the height of the subprime mortgage boom — between January 2005 and May 2007 — by recruiting straw buyers to purchase properties in Brooklyn and Queens at inflated prices in order to obtain loans that exceeded the properties’ true value. The brokers, John Star, 39, and Hervin Henry, 65, are each licensed in New York State. If convicted of conspiracy to commit bank and wire fraud, the defendents could face a maximum of 30 years in prison. TRD

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