Las Vegas Lawyer Sentenced to More Than Seven Years in Prison for Mortgage Fraud Crimes

LAS VEGAS—Las Vegas lawyer Gerry Zobrist was sentenced today to 87 months in prison for his involvement in a mortgage fraud scheme that caused more than $30 million in losses to lenders, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

“Mortgage fraud contributed to the decimation of real property values in Nevada,” said U.S. Attorney Bogden. “Since 2008, we have been working vigilantly with our law enforcement partners to investigate and prosecute these fraudsters. Hundreds of individuals have been convicted, including lawyers, real estate agents, real estate brokers, loan officers, loan processors, and others who participated in these schemes, and most of them are now serving time in federal prison.”

Zobrist, 43, of Las Vegas, was sentenced by U.S. District Judge James C. Mahan. Judge Mahan also ordered Zobrist to pay approximately $31 million in restitution and to serve five years of supervised release. Zobrist pleaded guilty in January to one count of conspiracy to commit bank fraud and wire fraud. He was allowed to self-report to federal prison by December 6, 2013.

According to the plea agreement, from about June 2006 to May 2008, Zobrist and unnamed coconspirators solicited and paid persons with good credit ratings to serve as straw buyers to purchase homes in the Las Vegas area on behalf of Zobrist and the coconspirators. Zobrist and the co-conspirators made offers to purchase the homes, and the sellers agreed to disburse part of the sales proceeds to real estate companies, co-conspirators, and third party entities controlled by Zobrist and the co-conspirators under the pretense that the proceeds constituted attorney’s fees, marketing fees, commissions, and other fees. Zobrist and the co-conspirators caused to be completed and submitted mortgage loan applications and supporting documents in the name of the straw buyers, which contained false and fraudulent information concerning the straw buyers’ income, assets, liabilities, intended occupancy status, and other things. Zobrist and the co-conspirators also caused to be submitted to the lenders documents containing false information about the source of the down payments, value of the homes, and intended disbursements to Zobrist, the co-conspirators, and straw buyers. Using this fraudulent scheme, Zobrist and the co-conspirators purchased 144 homes and obtained mortgage loans for more than $53 million. Zobrist and the co-conspirators defaulted on the mortgage loans, causing the homes to go into foreclosure, and caused the financial institutions to suffer losses of at least $30 million.

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Daniel R. Schiess and Sarah E. Griswold.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.