In the days of Prohibition, gangs dealt in bootleg liquor. In more recent years, it’s been drugs. In what is surely a sign of the times though, one gang decided to venture into a less traditional crime- mortgage fraud: [Hat tip T.M.!]
Two dozen people have been charged with racketeering in a fraudulent mortgage scheme allegedly run by a street gang member, according to an indictment unsealed in San Diego federal court today.
The group allegedly profited from loans arranged for amounts in excess of the price of the housing, among other tactics. The homes quickly went into foreclosure, according to the indictment.
The alleged mastermind was Darnell Bell, 38, a member of the Lincoln Park street gang long known to law enforcement for violence and drug sales. Bell, in prison since April 2008 on a conviction for distributing cocaine, was arraigned in federal court today on a racketeering indictment.
From 2005 to 2008, the scheme involved the sale of 220 homes and mortgages worth more than $100 million issued by 70 lenders, U.S. Atty. Karen Hewitt said at a news conference.
Do you suppose Bell stood on street corners pushing cocaine and passing out mortgage applications?
Bell used his status as a gang member to recruit phony buyers and to "maintain discipline" among the co-conspirators, the indictment said. FBI and IRS agents today arrested Bell’s 23 co-conspirators, Hewitt said.
Typically I picture gang members as having a "gangsta" look. I’ve got to wonder though what this crew looked like:
Among the co-defendants are people in the real estate, title insurance, appraisal and notary public businesses.
This gang’s activities has apparently taken mortgage fraud to a whole new level:
The 24 are charged with racketeering, which could lead to much tougher sentences than other real estate fraud cases. "That’s never been done before in a real estate fraud case," Slotter said.
What’s next- mortgage fraud turf wars? Wait a minute, now that I think about it, we’ve had those for years. The gangs had a street name for turf wars though. They referred to it as "market share".
