A Phoenix real estate investor on Monday pleaded guilty to conspiracy to commit wire fraud in a $50 million, Phoenix-based mortgage-fraud scheme, federal officials said Tuesday.
Authorities said two others have entered guilty pleas and are awaiting sentencing.
In his guilty plea, 46-year-old Brett Matheson admitted that, as president and CEO of Maricopa Property Investment Solutions Inc., he recruited straw buyers in real-estate seminars, according to Robbie Sherwood, a spokesman for the U.S. Attorney's Office for the District of Arizona. In this instance, a "straw buyer" is someone who pretends to be a legitimate buyer for a property but is actually helping to further a mortgage scam.
From about January 2005 through September 2006, Matheson reportedly helped to speed up the submission of mortgage-loan applications for unqualified straw buyers containing false information such as employment, income, assets and the intent to occupy homes as their primary residence, Sherwood said. Authorities said some loan-application packages contained altered pay stubs, false bank statements, and bogus verifications of employment and deposit.
Matheson personally obtained financing for the purchase of two properties using altered pay stubs and bogus verifications of employment, according to the U.S. Attorney's Office.
Some proceeds were then kicked back to a shell company controlled by Matheson and his co-conspirators, officials said.
Investigators said Matheson would often use the money on personal expenses or to make down payments to qualify additional straw buyers for financing on other properties.
In total, the scheme involved 52 properties and nearly $50 million in fraudulent loans, according to the U.S. Attorney's Office. Lenders, who were not aware of the arrangement between Matheson and the straw buyers, collectively lost nearly $20 million.
"Schemes like this have destroyed property values, crippled lending institutions, and ruined entire neighborhoods in our community," U.S. Attorney Dennis K. Burke said in a prepared statement.
The investigation was conducted by the Internal Revenue Service's Criminal Investigation Division and the Federal Bureau of Investigation. A conviction for a single count of conspiracy to commit wire fraud is punishable by a combination of a maximum fine of $1 million, a maximum 30-year prison sentence and a five-year term of supervised release, according to the U.S. Attorney's Office.
by Brittany Smith The Arizona Republic-12 News Breaking News Team Jun. 21, 2011 02:26 PM
Phoenix real-estate investor pleads guilty in fraud scheme
