Fraud in the News: Mortgage fraud scheme results in $8M loss
April 28, 2010
In recent news, there are many examples of organizations that experience unethical behavior by a trusted employee. We have summarized a recent case published April 14, 2010.
According to the Deforest News article, a tax preparer falsified self employment income stated on a borrower’s tax return to qualify for mortgage loans under the bank’s individual tax identification number (“ITIN”) mortgage program, from Feb. 14, 2006 through Oct. 17, 2007. Allegedly, a real estate agent approached the bank loan officer with prospective borrowers looking for a real estate loan; the loan officer informed the real estate agent the minimum self employment income levels required. The real estate agent would inform the tax preparer of these levels, and the falsified tax returns were created. The falsified tax return, which was never filed with the IRS was used in the loan application process. The payoff: The tax return preparer received tax preparation fees from the borrower, the loan officer received incentive payments from the bank, and the real estate agent received commission on the sale of real estate. Read the full story here.
View all