The final player in a mortgage fraud case that devoured several dozen houses in some of Cleveland's nicest neighborhoods has been given five years in prison. ideastream®'s Mhari Saito explains a case that involved more than a half dozen people and 38 houses in Solon and Glenwillow.
Robert Huff describes himself as a self-made man. One who grew up in poverty near E. 55th street. A 27-year career in real estate investment helped him afford nicer homes in pricier neighborhoods and even, purportedly, a Bentley. But Huff says he remembers his roots and helps those willing to work their way out of the inner city. And so in 2002, two such people came to Huff saying they wanted to get into real estate. Huff brought them to a new development in Solon.
Robert Huff: It took nine months to build the home. I helped them out with it. That deal started out as 100 percent - supposed to have been - financing.
So Huff says, but police, the Cuyahoga County Prosecutor's Office and Common Pleas Court Judge Eileen A. Gallager say otherwise. Huff was convicted for his role as a deal maker. Huff's buyer put no money down on the $441,000 loan from People's Choice. But on paper, the buyer did. Huff was convicted of depositing about $26,000 for the buyer and then cashing that money out after the deal closed. Dan Kasaris heads the mortgage fraud unit for the Cuyahoga County prosecutor.
Dan Kasaris: Here we had false information fraud and downpayment fraud and we have people at all levels in this transaction aware of what was going on.
The property then sold in 2006 for half a million dollars. That transaction is now also under investigation.
Many of the players in the case have been linked to other mortgage fraud scams in Solon and around Cuyahoga County. The builder is serving a 34 month sentence. One loan officer is serving two years, a woman working as a loan processor got five. By the end of next year, Cuyahoga County's mortgage fraud task unit says they will have investigated 1,000 property transactions around the county. But some like Robert Ruckstuhl, a former mortgage broker who now works with attorneys to help identify fraud, say that's just the tip of the iceberg.
Robert Ruckstuhl: There are a combination of factors: the lack of enforcement on the part of the state and federal government, the lack of any professional standards within industry itself and just the availability of a quick turn around from the lenders who really gave the mortgage broker community the opportunity to commit the acts that they did.
In Solon, Detective Christopher Viland has a list of about 60 houses tied to mortgage fraud. Most are in the suburb's pricey new developments. And Viland keeps finding more transactions where people lied to lenders about how much money they made, faked downpayments, or took cash as part of the closing process.
Det. Christopher Viland: It was such a prevalent way of doing business in the 2000s that nobody paid attention too that I think everybody was surprised that the local suburban police actually conducted investigations and actually caught them at what they were doing.
Lawyers and law enforcement have also been surprised at how stiff the sentences for mortgage fraud have been. Solon deal maker Huff got five years in prison. Huff's lawyer says his client will appeal. Mhari Saito, 90.3