July 18, 2008 12:38 PM
Weiss convicted in mortgage fraud scheme
[BY]By John Rebchook
[BODY]Arvin Weiss, 58, has been found guilty of mortgage fraud and witness tampering, U.S. Attorney Troy Eid said today.
A U.S. District Court found Weiss of Englewood guilty late Wednesday in a complicated mortgage fraud scheme, which primarily targeted Hispanics. Many of the people involved were in the U.S. illegally, according to Eid, and did not understand the mortgage loan process.
"Commit mortgage fraud and you may land in federal prison," Eid said in a statement. "Enough is enough."
Weiss faces not more than fiveyears in federal prison and/or a $250,000 fine per count of mail fraud and wire fraud.
In addition, he faces not more than 10 years in federal prison, and/or a $250,000 fine per count for witness tampering.
The guilty verdict came after a 13-day trial before Senior U.S. District Court Judge Lewis T. Babcock, where the jury deliberated for one day
Weiss is free on bond.
A status conference is scheduled for Oct. 22, at which time Babcok is scheduled to set a sentencing date.
Weiss was found guilty of 16 counts, including eight counts of mail fraud, five counts of wire fraud, and three counts of witness tampering. Other counts had been dismissed earlier in the case.
n Weiss was indicted by a federal grand jury in Denver on April 20, 2005. The trial began on June 23, 2008.
According to the indictment, as well as facts presented during trial, from June 1998 through January 2002, Weiss devised a scheme to fraudulently obtain money and property from mortgage companies that funded federally insured loans.
Weiss was a licensed real estate broker buying and selling properties as Reserve Capital Funds, Inc.
He acquired numerous single-family residences in the Denver area at low prices.
Within a few months, and after some improvements had been made, Weiss resold the properties at substantially higher prices to unsophisticated low-income buyers.
The buyers Weiss targeted were Hispanics who knew little or no English, many of whom were living in the United States illegally.
Many of Weiss' buyers did not understand the mortgage loan process, but wanted to purchase their own homes even though they could not legitimately qualify for mortgages.
Weiss arranged for buyers to acquire mortgages insured by the Federal Housing Administration, so they could purchase homes his company owned.
Knowing that the buyers he targeted could not afford to buy houses or legitimately qualify for home loans, Weiss allegedly arranged for false information about the buyers' qualifications and the sources of their down payments to be provided to various mortgage companies and HUD, making it appear that the buyers were qualified to receive FHA insured loans when they were not.
Operating under the name of Fairfax Homes, Ltd., Fairfax Express Corp. or Fairfax, all entities controlled by Weiss, the defendant would represent to prospective buyers that he had houses or could find houses the buyers could purchase, and that he and an assistant would take care of all the necessary paperwork.
The defendant also told buyers that they would not have to make the down payments from their own funds, despite a requirement by HUD to do so.
The buyers would provide their personal information directly to him or an assistant.
Weiss would then provide information about the borrowers, some of which was true, but material portions of which were false, to the mortgage companies and HUD, injecting false information about the borrowers' qualifications when necessary to enable them to qualify for the loans.
Weiss would secretly provide the funds for the down payments for the borrowers to be presented by the borrowers at closing.
Weiss signed numerous false certifications that he had not and would not pay or reimburse the borrowers for any part of their cash down payments.
Weiss usually sold his properties for two or three times what Reserve Capital had recently paid for them.
The buyers typically did not have the option of competitive pricing and did not contest his asking price, because they could not legitimately qualify for the loans.
In some cases, Weiss did not disclose the true purchase price to the buyers until closing.
In many cases, by encouraging the buyers to move into the properties rent free prior to closing, Weiss minimized the possibility that they would back out of their purchase agreements when they were informed of the properties' true cost.
The case was investigated by the Office of the Inspector General for Housing and Urban Development ), the FBI, The case is being prosecuted by Assistant U.S. Attorneys Linda Kaufman and Tim Neff.
[
Join the discussion