Mortgage Fraud and Sham Construction Companies

Ming Shan Zhu, age 57, owner of Catco Homes and Alvin Mark Eiland , age 45, former owner of Future Mortgage Company  Inc and Gary Leonard Robinson II, age 28, a former employee of Mr. Eiland  have been indicted in a scheme that defrauded mortgage lending institutions of over seven million dollars in loans. The loans were all purchased in the Houston area according the Federal Bureau of Investigation  and the Internal Revenue Service.

The conspirators according to the indictment recruited straw buyers and sought out properties for the straw buyers to purchase using their good credit on residential mortgage loan applications. The straw buyers were paid cash for the use of their name and credit. The straw buyers were also told that the properties would be rented out of a year and then the properties would be sold for a profit. The values of the properties were inflated to accomplish this profit. The straw buyers were also told that the conspirators would make the monthly payments on the properties; find renters to live in the homes and that the properties would be taken out of the straw buyers name after a project period of time.

The conspirators submitted fraudulent income, assets and often liabilities if they could manage it to the mortgage lending institutions. Mortgage applications were often submitted with information stating that the straw buyer was receiving rent on the home or that the straw buyer intended to occupy the property. The mortgage institutions used that information to lend the monies to the conspirators.

The conspirator also set up fraudulent construction companies and prepared fraudulent invoices from those companies to submit to title companies. The title companies believing that the invoices were official paid out the invoices at the time of the mortgage closings.

No improvement was done to any of the property involved.

The conspirators are facing a maximum sentence for each wire fraud and money laundering count of up to twenty years in prison in addition to fines.

The case will be heard by United States District Judge Lynn N. Hughes in March of 2010.

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