Loading ...Cape Coral Men Plead Guilty in Mortgage Fraud Scheme
Four Cape Coral men pleaded guilty to federal charges of money laundering and conspiracy to commit bank and wire fraud. A fifth man, from Texas, also pleaded guilty in relation to the same mortgage fraud enterprise. Troy Bossert, Tyler Forrey, Ryan O’Brien, Stephen Petrovich, and Steven Reese all face a maximum penalty of twenty years in federal prison.
According to the plea agreements filed in federal court in Fort Myers, the defendants operated a “cash-out” mortgage fraud conspiracy in Cape Coral between 2007 and 2008. They reported inflated sales prices to lenders and falsified applications for loans based on the higher prices. They then kept the excess loan proceeds at closing for themselves.
The men purportedly targeted “for sale by owner” homes after the housing market started to bust and offered to pay the sellers their asking price. They then told the sellers that the final paperwork would show a higher amount so that the buyers could use the excess cash to fund “future improvements.” They then found third-party buyers to obtain loans based on inflated sales prices, falsifying loan qualification information and creating fictitious cashier’s checks, bank statements, W-2s, and other documents to support the mortgage loan applications.
At closing, the charged men had the excess loan funds wired to entities under their control, showing the funds as payoffs for “existing liabilities” on the HUD settlement statements. They then divided the excess loan funds among themselves.
On the most of the properties, the “buyers” made approximately three payments on the mortgages and walked away, leaving the homes to foreclosure.
Prosecutors say that the men obtained more than $4.2 million in loans on eight properties in the Cape Coral area. In one case, the selling price of the house was $355,000, but the HUD statement showed a sales price of $725,000.
This case was part of the Middle District of Florida’s Mortgage Fraud Initiative, which is a joint effort by state and federal law enforcement and the U.S. Attorney’s Office.