Mortgage Broker Who Played Key Role in Massive Real Estate Fraud Sentenced to 6.5 Years in Prison
LOS ANGELES, CA – August 30, 2010 – (RealEstateRama) — A former mortgage broker who helped orchestrate a massive mortgage fraud scheme that caused well over $40 million in losses was sentenced today to 78 months in federal prison.
Mark Alan Abrams, 49, of downtown Los Angeles, was sentenced by United States District Judge Dean D. Pregerson. In addition to the prison term, Judge Pregerson ordered Abrams to pay more than $41 million in restitution to two federally insured banks.
In issuing the sentence, Judge Pregerson said it was important to hold fraud artists “accountable for great misdeeds.” The court noted that Abrams’ willingness to defraud banks, utilize credit information belonging to unknowing victims and induce underlings to participate in the scheme was “particularly evil.”
Abrams’ sentencing followed his guilty pleas to conspiracy to commit bank fraud and loan fraud, bank fraud, making a false statement on a tax return and obstruction of justice. Abrams was one of two men who led a massive mortgage fraud that involved properties across California. In addition to being a leader of the scheme, Abrams engaged in active efforts to cover up his role and destroy evidence when the fraud started to come to light. Abrams’ obstruction in a related civil case was so serious that a Judge Pregerson found him in contempt of court and put him in jail for 30 days.
A real estate developer, Charles Elliott Fitzgerald, who along with Abrams ran the fraud scheme, was previously sentenced to 14 years in federal prison (see: http://www.justice.gov/usao/cac/pressroom/pr2008/136.html).
Abrams and Fitzgerald ran a wide-ranging and sophisticated scheme that obtained inflated mortgage loans on homes in some of California’s most expensive neighborhoods, including Beverly Hills, Bel Air, Holmby Hills, Malibu, Carmel, Mill Valley, Pebble Beach, and La Jolla. Members of the conspiracy—real estate brokers, appraisers, and mortgage bankers, who all shared in the profits from the fraudulent sales—sent false documentation, including bogus purchase contracts and appraisals, to the victim banks to deceive them into funding mortgage loans that were hundreds of thousands of dollars more than the homes actually cost. Lehman Brothers Bank alone was deceived into funding more than 80 such inflated loans from 2000 into 2003, resulting in tens of millions of dollars in losses.
A total of 11 real estate professionals have been convicted of federal charges related to the scheme.
This case is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation.
United States Attorney’s Office
Central District of California
Contact: (213) 894-2434
