South Florida mortgage fraud scheme involves police chief’s son

A former police officer — and son of Cape Coral’s current police chief — entered a plea deal last week as part of a $4.2 million mortgage fraud conspiracy, according to the Fort Myers News-Press.

The high-profile case is the latest in a string of arrests for mortgage fraud in South Florida since the real estate market collapsed in 2007.

Earlier this month, two Miami men were sentenced to 45 months in prison for obtaining two fraudulent loans totaling $1 million. The defendant’s used the financial information of a mother-in-law to obtain the loans and used a home she owned as collateral, BNO News reported.

In the latest case out of Southwest Florida, the 35-year-old former police officer and four other defendants, including the brother of a Cape Coral police sergeant, pleaded guilty to a charge of conspiracy to commit bank and wire fraud and a count of money laundering. All 5 defendants face up to 30 years in prison at their upcoming sentencing.

The plea agreement contends that three of the defendants, including the police chief’s son, made more than $300,000 each, while the remaining men made between $65,000 and $150,000.

According to court documents, two of the men ran a brokerage firm that invested in real estate and flipped properties. In a classic “straw buyers” fraud scheme, the men found houses for sale by owner and used third-party buyers to purchase the properties at inflated prices. The defendant’s paid the seller and pocketed the additional money loaned by banks to purchase the properties.

The buyers provided false or inflated financial information on loan applications. Several payments would be made and then the property would be allowed to go into foreclosure.