From 2006 through 2009, Kramer knowingly used his mortgage company—Kramer Mortgage—as well as his real estate closing company—Iowa Closing and Escrow—to defraud multiple lenders of over $1 million.
The fraud was executed in connection with the real estate development company, LDF, the Department of Justice said.
As part of the mortgage scheme, Kramer and the members of LDF, including Lane Anderson, orchestrated straw sales of 13 properties to another LDF member, Shannon Flickinger.
LDF was the true buyer, but the company could not qualify for financing to purchase the properties because they already had too much debt. Flickinger was used as a straw buyer to obtain the financing to acquire the additional homes.
Despite the defendant knowing that LDF was the real purchaser, he had Kramer Mortgage submit loan applications on behalf of Flickinger named as the buyer. With Kramer’s knowledge, Flickinger’s income was substantially inflated in the applications in order to qualify him for the loans.
Once the fraudulent loan applications were approved, the straw sales were closed by Kramer even though Flickinger made no downpayments for any of the properties, contrary to the documentation that was provided to the lenders.
During this scam, Kramer defrauded one particular bank by intentionally concealing the sales of properties that had been pledged to the bank as collateral for a $4 million line of credit for the defendant.
After the sales of multiple properties in which the proceeds were owed to the bank, Kramer kept this money and used it to pay for his own personal or business expenses. Additionally, Kramer pledged several properties to more than one bank, without the banks’ knowledge, to obtain additional loans.
Due to the activities performed by Kramer in this scheme, the primary bank suffered significant losses and also left many homeowners unable to sell or refinance their homes because they did not have clear title to the properties. Some homeowners were also threatened with foreclosure as a result of this scam.