The government indicted a Philadelphia mortgage broker this week, accusing him of masterminding a $4 million mortgage fraud scheme that he allegedly ran through Police & Fire Federal Credit Union.
The indictment alleges that John McElroy, 53, entered into at least 13 fraudulent real estate deals in Florida, New Jersey and Pennsylvania by falsifying documents to obtain mortgages that resulted in equity payouts on the properties.
The real estate deals were financed through a variety of lenders, including Countrywide, IndyMac, Northwest Savings Bank, American Freedom Assurance, AmTrust Bank and Philadelphia's Police & Fire FCU, where McElroy had an account he used to process the mortgage loan proceeds and pay accomplices, the indictment charges.
Prosecutors say McElroy established fake companies and submitted false claims to obtain funds, but the companies conducted no business and provided no services. Authorities said the transactions, which occurred between December 2006 and September 2008, resulted in losses of more than $4 million to mortgage companies, banks and credit unions.
The government is seeking $4 million of forfeitures and monetary penalties totaling at least $526,000.
McElroy was charged with multiple counts of wire fraud, making false statements on loan applications, money laundering and related offenses. He appeared before a federal magistrate last this week and was released on house arrest with electronic monitoring.
