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Tuesday, November 17, 2009
Scheme Has Real Estate Agent in Court
Copyright © 2009 Albuquerque Journal
By Mike Gallagher
Journal Investigative Reporter
A former Albuquerque real estate salesman and mortgage broker is scheduled to appear in federal court this week on charges of running a fraudulent mortgage scheme on high-end Northeast Heights home sales.
Kevin Powers is charged with 14 counts of wire fraud and aiding and abetting in a series of real estate transactions in which buyers' loan applications were filled with false representations of income and assets. According to a search warrant in the case, Powers' employees referred to them as "liar's loans."
The FBI investigation into Powers' activities was part of a nationwide hunt for fraud by federal investigators during the real estate crash in 2008.
The investigation became public earlier this year when FBI agents served search warrants on Powers' offices. His attorney at the time said he was being made a "scapegoat" for the collapse of the home mortgage industry.
Powers was arrested in Virginia earlier this month and released on a $10,000 unsecured bond. He is scheduled to appear before U.S. Magistrate Judge Richard L. Puglisi on Wednesday morning.
Powers is accused of recruiting potential buyers, finding homes that could have their asking prices inflated and arranging mortgages for his recruited buyers. He would make money off the sale from the fees he received as the real estate agent and the mortgage broker.
When the sales closed, the difference between the original home price and inflated price would be turned over to a construction company owned by Powers, who would then funnel money back to the buyers to make mortgage payments, according to the indictment.
Powers would then put the house back on the market.
All of this was done without the legal disclosures required by federal law, the indictment charges.
In some cases, Powers made undisclosed loans to buyers to help make the down payments on the homes, according to the indictment.
The charges stem from seven home sales in 2006 before the real estate market collapsed. The inflated home prices ranged from $480,000 to $1.3 million, which followed the same pattern.
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