Former Loan Officer Sentenced to 11 Years in Prison in Mortgage Fraud Scheme
|U.S. Attorney’s Office December 19, 2013|
LAS VEGAS—A Billings, Montana man who worked as a loan officer in Las Vegas during 2006 and 2007 was sentenced today to 11 years in prison and five years of supervised release and was ordered to pay over $2.2 million in restitution for his fraud and identity theft convictions related to a mortgage fraud scheme, announced Daniel G. Bogden, United States Attorney for the District of Nevada and Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division.
Nicholas Lindsey, 40, was sentenced by Senior U.S. District Judge Lloyd D. George. Lindsay was convicted by a federal jury in April of nine counts of wire fraud and one count of aggravated identity theft.
“Many innocent homeowners in Nevada have suffered because of this type of crime involving fraudulent residential mortgage transactions,” said U.S. Attorney Bogden. “Unfortunately, these crimes are not victimless, and the damage to the community is lasting. Since 2008, when the FBI and our office made mortgage fraud prosecutions a priority, we have investigated, charged, and convicted hundreds of persons for federal mortgage fraud crimes, and most of them are now serving time in federal prison.”
According to the indictment and evidence presented to the jury during the trial, from about May to September 2006, Lindsey, who worked as a loan officer for Clear Mortgage and Signature Mortgage, recruited straw buyers to participate in what he described as a lucrative real estate investment opportunity by purchasing five homes in the Las Vegas area. Evidence at trial demonstrated that Lindsey secured more than $3 million in mortgage loans by knowingly causing to be placed in the straw buyers’ mortgage loan applications false information concerning the buyers’ income, assets, and intent to occupy the homes. Once the mortgages were approved, Lindsey fraudulently diverted to his bank account a portion of the proceeds disbursed from escrow and used these funds for his own benefit. Lindsey realized additional profits by living in or renting out properties in the buyers’ names.
In addition to the five homes of which the buyers were aware, Lindsey stole two buyers’ identities and used their personal information to purchase three additional properties in their names. The evidence established that Lindsey leased two of these properties and collected rental income and used the third as his own personal residence. After collecting profits, Lindsey stopped making the mortgage payments on the properties and allowed all eight homes to default in the borrowers’ names, causing an estimated loss to lenders of $1.6 million. At sentencing, the court also found that Lindsey used his position as a loan officer to commit fraud in relation to five additional properties, causing additional losses of $703,005 for a total loss of approximately $2.3 million.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Christina Brown and Trial Attorney Brian Young of the Criminal Division’s Fraud Section.
This case was handled in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.