August 23, 2002 at 5:29 PM EST - Updated July 12 at 4:13 AM
CLEVELAND (AP) - A wide-ranging investigation of alleged mortgage fraud in the Cleveland area has led to the indictment of 83 people and isn't finished yet, authorities said.
Those charged in federal indictments announced Thursday included appraisers, underwriters and home buyers and sellers.
Most of the home sales were at fraudulently inflated prices, according to the charges, with the alleged conspirators pocketing the excess loan proceeds.
U.S. Attorney Emily M. Sweeney said the indictments resulted from a continuing two-year investigation by five federal agencies.
The defendants allegedly worked together to provide false documentation on applications to qualify for mortgages.
Forty-two defendants allegedly plotted through local outlets of the American Home Loans national mortgage loan brokering service.
Thirty defendants worked at AHL outlets in Lyndhurst, Shaker Heights, Beachwood, Maple Heights and Cleveland Heights, Sweeney said. She said corporate headquarters and other AHL outlets had not been implicated.
A spokesman for AHL corporate offices in Santa Ana, Calif., said the company cooperated in the investigation.
"If the facts are true, this tarnishes the whole industry," said company attorney Michael Whippler.
The alleged conspiracy generated 31 fraudulent loan applications for more than $2 million from 1998 through August of last year.
A second indictment charged defendants with plotting to defraud Firstar Bank and Star Bank by providing false financial information to get mortgages.
The alleged plot focused on a suburban South Euclid real estate company run by Otis C. Bevel Jr., 42, of Beachwood, the government said.
Bevel, who was charged with conspiracy, has an unlisted home phone and could not be reached for comment Thursday night. A message was left at his office.
The defendants allegedly submitted phony pay stubs, tax forms and W-2 wage statements and had others verify the false information, Sweeney said.
The second group allegedly misstated customer assets in order to dupe lenders into approving 36 loans for $2.8 million over a 2-year period.
"They say that mortgage fraud is a victimless crime, but every dollar taken through mortgage fraud is a dollar taken from hard-working people trying for the American dream," said Joseph Persichini, the acting agent in charge of the Cleveland FBI.
Defendants could face up to 30 years in prison if convicted of fraud and five years if convicted of conspiracy.
(Copyright 2002 by The Associated Press. All Rights Reserved.)