A mortgage fraud case has ensnared 31 people who established a network to obtain more than $14 million in fraudulent loans from 28 homes in South Florida, including 15 on Marco Island, federal prosecutors announced in an indictment handed up this week.
Federal officials said the scheme involved homeowners, mortgage companies, appraisers, real estate agents, bankers and “straw buyers” who would artificially inflate home prices and then pocket the difference.
The indictment follows a months-long investigation that involved several law enforcement agencies, including the U.S. Secret Service and the City of Marco Island Police Department.
“Mortgage fraud cannot be ignored,” U.S. Attorney Alex Acosta said in a release. “It has become a real and daily threat to the asset most important to most of us Floridians — our homes.”
The indictment centers on Juan and Rachael Torrens, a Miami couple in charge of several development, real estate and mortgage firms.
The Torrens would identify homeowners willing to overstate their home’s values and set them up with “straw buyers” who would allow their identities and credit to be used in exchange for a fee, the indictment said.
Also charged were Daniel Ramos, the owner of a Miami construction company; Alfred Muxo, owner of a Palmetto Bay real estate appraiser’s office; Katherine Harris, part owner of a Hollywood title company; and Roger Rosario, an assistant bank manager in Miami-Dade County.
The remainder of the charges were against 25 people who served as straw buyers.
Aside from the 15 homes targeted on Marco Island, the remainder were in Broward and Miami-Dade counties.
Marco Island Police Chief Roger Reinke said there could be more charges coming for mortgage fraud on the island.
“The investigation continues,” Reinke said. “That should speak for itself.”
Mortgage fraud inflates home prices that can have an effect on the values of neighboring properties, making it harder to buy and sell homes.
Gerry Rosenblum, a past president of the Marco Island Area Association of Realtors, said fraud has had a “fairly significant” effect on Marco Island’s real estate market.
“A lot of what drove the market up was a lot of this type of mortgage fraud,” Rosenblum said. “That had a real impact on the market.”
“We’re glad it’s all getting cleaned up now,” he added.
Monday’s indictment was part of a Federal-State Mortgage Fraud Initiative announced in September by Acosta. The initiative has netted 55 charges in connection with several schemes involving loans totaling more than $75 million, a federal prosecutor’s release said.