The ring leader was street gang member Darnell Bell, from the Lincoln Park gang. Previously in jail for cocaine distribution, this may be a sign that gangs are branching into more sophisticated crimes. Over $9 million was deposited into an account controlled by Bell. This complex scheme resulted in charges to 24 co-conspirators for bank and wire fraud, money laundering and corrupt racketeering activity. They had participants from real estate, title insurance, appraisal and notary public.

The field of players and game play worked as follows:

Player 1: Located properties that had been on the market for an extended period of time with reduced asking prices. They negotiated an inflated purchase price and submitted false loan applications to support loans that otherwise would never have been approved. In most cases they were for 100% of the purchase price and did not require any capital investment. They included false letters and documents for income and reference verification.

Players requested extra funds for property improvements to make the homes handicap accessible. Payout of these funds was requested upon closing to Bell Construction, a bogus construction firm.

Player 2: Buyers agreed to provide their names and credit histories to be used in the mortgage applications. Properties were purchased, however, in the name of the racketeering enterprise. Bell used his gang status to intimidate and recruit players for this role.

Player 3: Real estate appraisers who prepared inflated appraisals to give lenders the impression that the loans would be secured by the value of the properties.

Player 4: A licensed real estate broker allowed the enterprise to use his broker's license to initiate the property purchase. In exchange this person received a monthly payment of $10,000 and a percentage of the real estate commission and broker's fees.

Player 5: An escrow officer and notary republic to assist in closing of fraudulent properties.

Player 6: Certified Public Accountant and registered tax preparers.

Once the properties were closed and funds were paid out for repairs, mortgage payments were never made and the homes fell into foreclosure, creating large financial losses for the lenders.

Lenders filed reports of suspicious activity, and upon investigation by the Federal Bureau of Investigation and Internal Revenue Service, it was discovered that none of the properties had any improvements done to them. The maximum penalties faced by those involved include 20 years in jail, a fine of $250,000, and three years of supervised release.

FBI Special Agent Keith Slotter commented,"The individuals charged in this indictment have one thing in common: greed. They represent precisely those who have undermined our country's financial system by perpetuating such egregious schemes. The FBI and our law enforcement partners remain vigilant and will pursue those who engage in this type of criminal activity. The extent to which this group of people went to defraud lenders should also serve as a warning to the public. We urge people to come forward with information of suspicious activities they may encounter when engaged in real estate and mortgage transactions."

About the author:Joshua Sloan is your experienced REALTOR® for San Diego real estate. Visit his website at SanDiegoRealEstateBuzz.com to find San Diego short sales, property listings, and more.

Article Source: http://www.Free-Articles-Zone.com

Chatsworth, Calif. - (March 27, 2009) Two bills being considered in the California Legislature would pose a serious threat to the current fraud-deterrent system protecting consumers and homeowners in the state by mandating that Notaries Public accept the Matricula Consular card as proof of a signer's identity -- a foreign identification document that the FBI has called "unreliable due to the non-existence of any means of verifying the true identity of the card holder."

The Matricula Consular card is issued by the Mexican government through its consular offices to Mexican nationals who are living and working abroad. Senate Bill 461 and Assembly Bill 442 call for the statutory recognition of the Mexican Matricula Consular card as an acceptable form of identity verification for notarizations, and compel California Notaries to honor it. The California-based National Notary Association strongly opposes the legislation because it mandates that Notaries accept a document of questionable validity for notarizations that often involve highly important transactions, such as mortgage title transfers.

"Allowing acceptance of the Matricula Consular will compromise the safety and security of California consumers and undermine the credibility of the state's Notaries Public," said Timothy S. Reiniger, Executive Director of the National Notary Association. "In this era of rampant document fraud and identity theft, requirements for establishing proof of identification should be tightened rather than compromised. Senate Bill 461 and Assembly Bill 442 will not accomplish this, and more importantly, will undermine our state's efforts and recent successes in fighting mortgage fraud," added Reiniger.

While the Matricula Consular card includes a photograph and signature, it does not include a physical description of the bearer, as required by the very statute the legislation seeks to amend. This reason alone is justification for questioning the reliability of the card. Additionally, enactment of this ill-advised legislation would present a direct conflict with a 2008 California state law which stipulates that Notaries can no longer rely on "personal knowledge" of the identity of document signers, and must instead verify their identities using documented evidence that meets specific criteria.

There is simply no need to expose Californians to additional, unnecessary risk when California Civil Code already allows the use of more secure forms of identification documents for immigrants and foreign travelers, including Mexican driver's licenses and passports. California Notaries are trained and tested to accept these documents from border nations, including Canada and Mexico.

"The enactment of the legislation requires Notaries to recognize a card of proven unreliability, weakening the California notarial system that protects the public from forged real property deeds and other important documentary transactions and identity crimes. Notaries in this state must not be forced to accept a card that the U.S. Department of Justice and the Federal Bureau of Investigation declare is not a trustworthy identifier," said Reiniger.

The U.S. Department of Justice and the FBI cite the following major deficiencies of the Matricula Consular card:

-- The government of Mexico has no centralized database to coordinate the issuance of consular ID cards. This allows multiple cards to be issued under the same name, the same address, or with the same photograph.

-- The Mexican government has no interconnected databases to provide inter-consular communication to be able to verify who has or has not applied for or received a consular ID card.

-- The government issues the card to anyone who can produce a Mexican birth certificate and one other form of identity, including documents of very low reliability. Mexican birth certificates are easy to forge and they are a major item on the product list of the fraudulent document trade currently flourishing across the country and around the world.

-- In some locations, when an individual seeking a Matricula Consular is unable to produce any documents whatsoever, he or she will still be issued a Matricula Consular card by the Mexican consular official if a questionnaire is completed and the individual satisfies the official that the person is who he/she purports to be.

-- The Matricula Consular card is vulnerable to forgery and 90 percent of the estimated 2 million in circulation are simply laminated cards without security features.

SOURCE: National Notary Association