Beverly Hills Fraud: Mortgage Broker Pleads Guilty in $18.5 Million Flipping Scheme

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Nothing like a Friday afternoon guilty plea to spice up the blog. A Beverly Hills mortgage banker has agreed to plead guilty to federal felony charges in what the Feds are calling a ‘massive mortgage fraud scheme that caused more than $18.5 million in losses to banks.’

Highlights:
--Richard Maize, 53, of Beverly Hills, co-founder of Americorp Funding, will plead guilty to bank fraud, conspiracy to commit bank fraud and loan fraud, and false statements on a tax return, says the U.S. Attorney’s office in LA.
--The scheme allegedly involved flipping properties, first buying them at market value, then using ‘straw buyers’ who would agree to pay vastly inflated prices.
--Five people have been previously charged in the scam, which dates to loans made from 2000 to 2002. (Do these names ring a bell: Charles Elliott Fitzgerald? Mark Alan Abrams? They allegedly bought the homes involved in the scam, and used Maize to get mortgages for ‘straw buyers.’)
--One example: A Bel Air home bought for $735,000, then flipped to a ‘straw buyer’ for $2.37 million.
--Maize allegedly arranged the mortgages through other banks, and received kickbacks on the deals.
--Lehman Brothers Bank appears to have been notably asleep at the switch: It was duped into funding 40 loans involving the Maize scam, totalling $28 million, in just two years.

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Photo Credit: Desi on LATimes.com’s Your Scene