Local Gang Member Organizes Mortgage Fraud Scheme
Tuesday, April 7, 2009
Federal authorities say a San Diego gang member masterminded Southern California's largest mortgage fraud scheme. They say the group swindled millions. KPBS Reporter Ana Tintocalis has more.
Police say 38-year-old Darnell Bell is a documented member of the Lincoln Street gang. Authorities say he organized a large network of a fake buyers and sellers to defraud mortgage lenders.
U.S. Attorney Karen Hewitt says the scheme involved 220 properties in San Diego worth a total of $100 million. She says the fake buyers and sellers borrowed money from lenders with no intention of paying the loans back.
“The real tragedy I think is in those neighborhoods, those communities, all of these homes fell into foreclosure,” Hewitt said. “And for all those people in those streets that paid their mortgages on time, they're affected by this case too.”
FBI Special Agent Keith Slotter says Bell and the others are charged with federal racketeering. He says Bell was already in custody on drug charges.
“From dealing dope on the streets, perhaps, to delving into this sort of much more sophisticated crime,” Slotter said. “Not only more sophisticated, but also had the potential to be more profitable.”
Slotter says this is the first mortgage fraud case in the country resulting in federal racketeering. He says that's because of the size of the operation. He also says prosecutors are being more aggressive in prosecuting real estate schemes.
Ana Tintocalis, KPBS News.