IRS Is Looking At 200 RE Cases
The U.S. Internal Revenue Service said it initiated nearly 200 real estate fraud investigations in fiscal year 2004 and secured 89 convictions for tax fraud and money laundering.
"In recent years, the booming real estate market has helped increase mortgage fraud and other phony real estate schemes. The perpetuators of these schemes range from mortgage brokers looking to make a fast buck to drug dealers laundering their ill-gotten gains," the IRS said.
The most common schemes involve property flipping, straw buyers and submission of false settlement statements to lenders.
In one case sited by the IRS, George Monk of Greensboro, N.C., recruited mortgage brokers to submit false information to lenders so that straw buyers could obtain mortgage loans. Monk promised the buyers he would make the monthly mortgage payments and quickly transfer the properties out of their names. But he didn't make the payments and the properties went into foreclosure. Monk was sentenced to 87 months in prison and ordered to pay $224,000 in restitution.
IRS criminal investigations involving mortgage fraud have doubled since FY 2001. "FY 2004 statistics reflect a three-year high of the number of cases recommended for prosecution, as well as indicted, convicted and incarcerated," the IRS said.
The IRS initiated 194 RE investigations in FY 2004, recommended prosecution of 148 cases and secured 89 convictions.
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