A loan originator and his assistant are accused of helping a former high school football star execute what could wind up being one of the biggest mortgage fraud schemes ever in Brooklyn, N.Y.
Owen Larman, 32, a one time standout at Canarsie High School, has been indicted on 15 criminal charges in what prosecutors are calling the largest mortgage fraud in Brooklyn history.
Larman was not immediately apprehended by authorities in Kings County. If convicted, he could go to prison for up to 25 years.
Six others, including a girlfriend who worked for a mortgage company, were also indicted for participating in a ring that allegedly made 33 fraudulent mortgage fraud deals and stole $6.22 million from seven banks and mortgage lenders, Kings County District County Attorney Charles J. Hynes said in a statement.
Hynes said Larman and his accomplices ripped off lenders “by falsifying documents to make it seem like the properties that he was selling were valued at higher prices that they were actually worth.”
Larman used childhood friends, family friends and old girlfriends in the scheme, Hynes said. They became victims by agreeing to be “straw buyers” and allowing Larman to use their identities to get mortgage loans approved, he said.
The victims were lured with promises that Larman would help them become real estate investors, make them money and improve their credit.
“The lion’s share of the loan proceeds went directly to Larman,” Hynes said. “While Larman kept this money and control of the houses, these individuals’ credit histories were ruined and they owed huge debts from the loans that Larman took out in their names.”
In some cases Larman told the victims they had purchased a house when he was the actual owner. Other times he promised the properties would be rehabbed so they could be rented out as apartments and that he would pay the mortgage.
But Hynes said no work was done on the buildings and other “nominal” mortgage payments were made.
Hynes said Larman had plenty of help in running the fraud scheme. All of his accomplices have also been indicted.
Melinda Cross, who prosecutors have said is Larman’s girlfriend, and Joey Singh worked at US Mortgage. Singh, also known as Puneet Bhalla, was a loan officer and Cross’ supervisor. Cross allegedly falsified documents that were used to check the veracity of loan applications submitted to US Mortgage, Hynes said.
Singh allegedly “fed” bad loans backed up by phony documents to corporate headquarters for approval. He received a kickback from Larman for his work, Hynes said.
A non-licensed appraiser would allegedly artificially “pump up” the values of the buildings, enabling Larman to get a larger mortgage than the properties were worth, while a lawyer, would tell buyers she was working with them when she was covertly working as an accomplice to Larman, Hynes said.
The attorney allegedly used bank funds to generate “show checks” that were meant to appear as down payments when no payments were really being made. But the checks were shown to lenders, which in turn dispersed mortgage funds believing that money was being put down on the purchases.
A title company employee was charged with falsifying records and recording phony titles, Hynes added.
