Arizona Mortgage Broker Pleads Guilty to Fraud Scheme

Jeffrey Todd Crandell, a mortgage broker from Mesa, Ariz., pleaded guilty to running a sophisticated cash-back mortgage fraud scheme in the state. Sentencing is scheduled for Feb. 22, 2010, before U.S. District Judge G. Murray Snow. According to Dennis K. Burke, U.S. Attorney for the District of Arizona, in 2005, Crandell obtained the rights to various parcels of real estate in Queen Creek, obscured his interest in those properties and recruited others to buy the properties for significantly inflated prices. Crandell also acted as the mortgage broker for each transaction. In preparing the buyers' loan applications, Crandell inflated their incomes and assets and falsely stated that the buyers would be making the downpayment. At closing, Crandell supplied the downpayment on the buyers' behalf, providing them with a cash kickback. The properties eventually went into foreclosure. Crandell's conviction is part of "Operation Cash Back," an initiative in which 40 defendants were indicted and arrested in June 2008. To date, 30 have been convicted through guilty pleas or following trial.