Florida Mortgage Plot Exposed

Two investors from Boca Raton, Florida admitted fleecing mortgage lenders for more than $67 million in fraudulent loans for Palm Beach county hotels.

Each investor, one from Miami-Dade County and one from southern Palm Beach County, face a count of conspiracy to commit wire fraud. They were charged earlier this month in an Orlando federal court without a grand jury indictment. Plea agreements were reached with each man through the US Attorney�s Office, outlining their scheme in the bargain. A fine of up to $250,000 and five years of prison time, with supervised release, could be the result.

Two hotels in Miami-Dade and Palm Beach counties, and a Travelodge in Ft. Lauderdale made up the properties involved. An additional two hotels located on International Drive in Orlando are now under new ownership and operating under new names. The scam worked by having one of the men issuing fraudulent appraisals with inflated income and occupancy rates, while the other man would issue fake documents to support the income. This would allow the men to finance the properties at 100% of the listed value, or even to walk away from the closing with money in their pockets. The shadow mortgages would then be sold to another borrower, putting the burden on the new owner.